Botany Land Development Ltd v Pallister
[2016] NZHC 1419
•27 June 2016
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV 2014-404-3015 [2016] NZHC 1419
BETWEEN BOTANY LAND DEVELOPMENT LTD
First Plaintiff
184 MARAETAI ROAD LTD Second Plaintiff
AND
MARGARET ELLEN PALLISTER, WENDY JUNE PALLISTER AND JULLIAN MARY MENZIES
First Defendant
AUCKLAND COUNCIL Second Defendant
PAUL KENNETH FOSTER of FLEMING FOSTER PALMER
First Third Party
BAYLEYS REAL ESTATE LTD Second Third Party
Hearing: 17 June 2016 Counsel:
N Campbell QC and R Butler for Plaintiff
A H Waalkens QC and P Fuller for First Defendants
B Upton for Second Defendant
M O Robertson for First Third Party
K Burkhart for Second Third PartyJudgment:
27 June 2016
JUDGMENT OF HEATH J
This judgment was delivered by me on 27 June 2016 at 4.00pm pursuant to
Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar
BOTANY LAND DEVELOPMENT LTD v PALLISTER [2016] NZHC 1419 [27 June 2016]
Introduction
[1] This proceeding has been set down for trial over four weeks, commencing on
3 October 2016. It has a tortuous procedural history, some of which I need to recount. My task is to determine whether the scheduled hearing should be adjourned.
[2] I heard from counsel on 17 June 2016. During the course of that hearing, three possibilities were identified:
(a) The first is to retain the 3 October 2016 hearing time, subject to the possibility that the party (or parties) pressing for that to be done might be at risk of a wasted costs order should the question of adjournment need to be re-considered at that time.1
(b)The second is for liability issues to be determined in October, with all questions of relief deferred for consideration over a period starting 13
February 2017.
(c) The third is that the whole of the proceeding be adjourned to February
2017.
[3] Counsel asked for time to consider the options available to them, and to take instructions from their clients. I directed that a joint memorandum be filed on or before 24 June 2016, setting out the respective positions. I indicated that, in the event that they were unable to agree, I would determine (on the papers) whether an adjournment was necessary.
Background2
[4] On 5 November 2012, the trustees of the Margaret E Pallister Family Trust
(the trustees) entered into an agreement to sell land, situated at Maraetai, to Botany
1 This may be necessary as a result of an Environment Court hearing on 19 September 2016: see paras [14] and [15] below.
2 My summary of relevant background is drawn primarily from a judgment of Edwards J on an application in relation to admissibility of evidence: Botany Land Development Ltd v Pallister [2016] NZHC 1371.
Land Development Ltd (Botany). The purchase price was $2.35m. The agreement was conditional on Botany obtaining a subdivision consent from Auckland Council (the Council) by 10 May 2013.
[5] As a result of discussions between representatives of Botany and the Council in March and April 2013, Botany believed that a 2002 Concept Subdivision Consent (the concept consent) for the property remained active, so as to enable subdivision. On 9 May 2013, Botany declared the agreement unconditional. A company, 184
Maraetai Road Ltd, was nominated to take title to the land.
[6] The Council learned of the Botany agreement before it was declared unconditional. The Council informed the trustees that it enjoyed a right of first refusal in respect of one of the titles in issue. That right is set out in an encumbrance registered against that title. After the Botany agreement became unconditional, the Council lodged a caveat against that title. That had the effect of preventing the Botany agreement from proceeding. Although both the trustees and Botany
challenged the caveat, it was sustained by this Court.3 That decision was upheld on
appeal.4
[7] In November 2013, the Council issued substantive proceedings against both the trustees and Botany. Those proceedings were settled on 19 November 2014. The trustees and the Council entered into an agreement for sale and purchase of one of the titles, pursuant to which the Council was to pay $2.745m. On 10 December
2014, the trustees purported to cancel their agreement to sell the land to Botany.
The present proceeding
[8] In this proceeding, Botany seeks specific performance of its agreement with the trustees, or damages in substitution. In a recent judgment on a question of admissibility of evidence, Edwards J summarised the issues arising in the present proceeding:
[15] Botany identifies the following issues in the proceeding (reference to
the “Pallisters” is reference to the trustees):
3 Auckland Council v Pallister [2014] 2 NZLR 405 (HC).
4 Botany Land Development Ltd v Auckland Council (2014) 14 NZCPR 813 (CA).
(a) Did the Pallisters validly cancel the Botany agreement?
(b) Which of the plaintiffs’ interest and Council’s interest (if
any) has priority?
(c) If the plaintiffs’ interest has priority, are there any other
grounds for refusing specific performance?
(d) If the plaintiffs’ interest has priority, should specific
performance be denied on the grounds of mistake?
(e) If the plaintiffs obtain an order for specific performance, what interest for late settlement will be payable by the Pallisters on settlement?
(f) If the Botany agreement remains on foot, but specific performance is refused, what damages should be awarded to the plaintiffs in lieu of specific performance?
(g) Should any damages award be reduced on account of contributory negligence by the plaintiffs?
(footnotes omitted)
The Environment Court proceedings
[9] Parallel proceedings have been running in the Environment Court. Initially, they were focussed on whether the concept consent remained live. On an application by 184 Maraetai Road Ltd, the Environment Court declared that the concept consent had been “given effect to” before 29 November 2010 so as to make an application for subdivision in accordance with its terms “a controlled activity as opposed to a restricted discretionary or non-complying activity” for the purposes of s 87A of the
Resource Management Act 1991.5 A declaration to that effect was made by the
Environment Court.6
[10] Following a successful appeal by the Council, the application was remitted back to the Environment Court for reconsideration.7 This Court allowed the Council’s appeal on the grounds that the Environment Court had considered whether or not the concept consent should lapse, rather than determining whether it had, in
fact, lapsed.8
5 Generally, see Auckland Council v 184 Maraetai Road Ltd [2015] NZRMA 490 (HC) at paras
[4]–[13].
6 184 Maraetai Road Ltd v Auckland Council [2014] NZEnvC 105 (EnvC).
7 Auckland Council v 184 Maraetai Road Ltd [2015] NZRMA 490 (HC).
8 Ibid, at paras [25], [26] and [29].
[11] The application was reheard on 20 November 2015. In a judgment delivered on 10 December 2015, Judge J A Smith (sitting alone) concluded that the concept consent was subsisting. He directed that the “land use Consent for a Concept Subdivision for 15 rural allotments granted on 1 March 2002” had “been given effect to” and that the concept consent applied “both as to the status of the application for subdivision [and] the minimum condition applying to the development of the balance
of land not already subject to subdivision consent”.9 No appeal has been brought
from that decision.
[12] In making that decision, Judge Smith made it clear that the concept consent was “not, and never was, a resource consent to undertake any works”. Rather, His Honour said that it changed “the status of subsequent applications for certain subdivision consents if certain preconditions” were met. Thus, the effect of the concept consent was to give a later “application a special status if it addressed” those
preconditions”.10 Judge Smith added that the “validity of such a [concept consent]
was explicitly excluded from” the proceedings before the Environment Court. Accordingly, it was not open to the Judge to consider whether it was “ultra vires or unworkable”.11
[13] Before judgment was given on the remitted application, the present proceeding had been set down for hearing over two weeks, commencing on 15
February 2016. When the proceeding came before me for directions on 12 February
2016, it was plain that the case was not ripe for hearing. Further, the time estimated was inadequate. I made an order adjourning it until the week commencing 3 October
2016. Further case management conferences have been held to ready the proceeding for hearing.
[14] Following delivery of the Environment Court’s judgment of 10 December
2015, and after I had made my decision to adjourn the February 2016 trial, the trustees commenced a new proceeding in the Environment Court, in which declarations were sought to prevent 184 Maraetai Road Ltd from obtaining a
subdivision consent. The trustees have also asked the Environment Court to make a
9 184 Maraetai Road Ltd v Auckland Council [2015] NZEnvC 213 at para [44].
10 Ibid, at para [8].
11 Ibid, at para [9].
declaration about the interpretation of Advice Note 10, an issue that is already before this Court.12
[15] The new Environment Court proceeding is scheduled to be heard on 19
September 2016, with an application to strike-out that part of the claim involving interpretation of the Advice Note to be heard on 7 July 2016. I understand the strike- out application is (generally speaking) based on the fact that that issue is squarely before this Court in the present proceeding.
The present adjournment application
[16] The hearing on 17 June 2016 was convened in response to memoranda in which counsel for one of the third parties had suggested an adjournment might be required. No formal application has been made. I heard argument on the question when it became clear that real difficulties had been caused by the need for the Environment Court to consider the new proceeding.
[17] As indicated earlier,13 I have received a joint memorandum from counsel setting out their respective positions. Botany and 184 Maraetai Road Ltd wish to proceed with the hearing on 3 October 2016. All other parties prefer to await the alternative time that could be made available in February 2017.
[18] Mr Campbell QC, for Botany, makes the point that an adjournment is sought in respect of proceedings in the Environment Court that were not on foot at the time the earlier hearing in February 2016 was vacated.
[19] Those parties who seek an adjournment had, initially, argued for one which would enable the Environment Court decision to be given, and any appeals determined. I rebuffed that proposal during the hearing on 17 June 2016, indicating that any delay could not proceed beyond determination of the application scheduled
for hearing in the Environment Court on 19 September 2016.
12 Advice Note 10 is part of the encumbrance under which the right of first refusal is said to exist:
see para [6] aboe.
13 See para [3] above.
[20] I suggested that consideration be given to the possibility of an adjournment for a hearing over four weeks starting on 13 February 2017, in the expectation that a judgment from the Environment Court should be available then. Any appeal from that decision could be accommodated within those four weeks. Counsel for the parties other than Botany and 184 Maraetai Road Ltd prefer an adjournment to 13
February 2017, on the basis I indicated.
[21] Reluctantly, I have decided to adjourn the proceeding for hearing until 13
February 2017. There are some remaining case management issues requiring resolution in this Court, and it is conceivable that the approach to issues taken at the next Environment Court hearings could require some amendments to the pleadings and evidence.
[22] In a case where this Court has had to adjourn a hearing to await a decision in the Environment Court, and sufficient time has been allocated to deal with an appeal from its decision (if necessary) on adjourned dates, I am sure the Environment Court will endeavour to give a prompt decision. My adjournment decision is based on that premise. A copy of this judgment will be made available to Judge Smith, as a courtesy and for his information.
[23] Irrespective of whether the Environment Court has given judgment before the
13 February 2017 hearing, it is most unlikely that any further application to adjourn would be entertained, unless promoted by Botany and 184 Maraetai Road Ltd. While any application by other parties would be considered on its own merits at the time, an application of that type will be scrutinized carefully.
[24] In my view, although the delay is regrettable, I consider that the risks inherent in forcing the parties to proceed in October, not long after the September hearing date in the Environment Court, require an adjournment. In particular, given the complexity of the proceeding, it is undesirable that it might be part-heard.
Result
[25] The hearing scheduled for 3 October 2016 is vacated and appearances are excused.
[26] The Registrar is directed to arrange a case management conference before me at 9am on the first available date after 3 October 2016, so that any further directions required to ready the proceeding for trial in February 2017 may be made in light of any issues arising out of the hearing before the Environment Court on 19 September
2016. The conference will be held in court for chambers.
[27] Costs on the adjournment application are reserved.
P R Heath J
Delivered at 4.00pm on 27 June 2016
Solicitors:
Knight Coldicutt, Auckland
Thompson Blackie Biddles Ltd, AucklandSimpson Grierson, Auckland Robertsons Law, Auckland Kennedys, Auckland Counsel:
R Butler, Auckland
A H Waalkens QC, Auckland
N Till QC, Christchurch
R Latton, Auckland
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