Cambray North Island Limited v Minister of Lands HC Auckland CIV 2011-404-000513

[2011] NZHC 1781

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2011-404-000513

UNDER  the Property Law Act 2007

IN THE MATTER OF     extinguishing an Encumbrance and

Easement

BETWEEN  CAMBRAY NORTH ISLAND LIMITED First Applicant

ANDELAN DEVELOPMENTS LIMITED Second Applicant

ANDTHE MINISTER OF LANDS Respondent

Hearing:         (On the papers)

Counsel:         J Strauss for the Applicants

M T Parker for the Respondent

Judgment:      14 December 2011 at 11:00 AM

[FINAL] JUDGMENT OF WYLIE J

This judgment was delivered by Justice Wylie

On 14 December 2012 at 11.00 am

Pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date:

Distribution:

J Strauss: [email protected]

M T Parker: [email protected]

CAMBRAY NORTH ISLAND LIMITED V THE MINISTER OF LANDS HC AK CIV 2011-404-000513 14

December 2011

[1]      I refer to my interim oral judgment given on 10 August 2011.

[2]     The applicants, Cambray North Island Limited (“Cambray”) and Elan Developments Limited (“Elan”), were seeking orders under s 317 of the Property Law Act 2007 extinguishing an easement.  It was common ground that the easement should be discharged, but the parties disagreed as to the quantum of compensation payable by the applicants, pursuant to s 317(2) of the Act.

[3]      I held that compensation should be assessed in the sum of $37,300 (inclusive of GST), for the actual  detriment suffered by the respondent as a result of the easement  being  extinguished.    I  then  considered  what  additional  compensation should be ordered.  Both parties had filed affidavits from valuers.  I disagreed with the approach of both valuers, and held they should focus on what the parties would have agreed in a friendly negotiation, taking into account all factors of benefit or detriment on either side that would legitimately influence the parties in their hypothetical negotiations.  I directed the parties to obtain further valuations so that the hearing could resume.

[4]      I have now received memoranda from the parties.   There is now a large measure of agreement between them.

[5]     A valuer, a Mr Gribble, has calculated that the appropriate additional compensation payable, excluding the cost of relocating services, is $47,750.  That figure is accepted by all parties. They invited me to make an order in that regard.

[6]      There was an initial debate as to whether or not this additional compensation should be plus GST.    The issue was not fully canvassed in the memoranda filed before me, and it is not appropriate for me to express a view.  The parties have now agreed  that  the  additional  compensation  payable  should  be  expressed  as  being

$47,750 plus GST (if any).

[7]      Mr Strauss annexed to his memorandum a draft order which required the respondent to relocate water, electricity and telecommunication services no later than

1 March 2012.  Mr Parker, on behalf of the respondent, sought that the completion

date for this work should be set at three months as from the date of this judgment. Mr Strauss agreed to that amendment.

[8]      In all other respects, the draft order was agreed.

[9]      Finally, the parties asked me to resolve the question of costs.   Mr Strauss submitted that costs should lie where they fall.  He argued that both parties had had a measure of success.  He pointed out that the applicants were successful in obtaining the extinguishment of the easement and removal of the encumbrance, while the respondent  was  successful  in  obtaining  more  compensation  than  the  applicant initially offered.  He noted that nevertheless, the compensation which the respondent obtained was substantially less than was initially demanded.

[10]     Mr Parker, for the respondent, submitted that an order for costs should be made in the respondent’s favour.   He submitted that the issue which separated the parties was the payment of compensation.   He noted that the applicants offered

$5,000  for conveyancing costs  by way of compensation,  and  submitted that,  in effect, had the applicants offered a more reasonable figure, the issue would have been more readily resolved.

[11]     A reply memorandum was filed for the appellant.  It took issue with a number of assertions made by Mr Parker in his memorandum.

[12]     I have considered the parties’ respective contentions, and consider that costs should lie where they fall.  It is clear that a lot more went on behind the scene than has been disclosed to the Court.   As far as I am concerned, the principal issue between the parties related to compensation.  As noted in my judgment, the parties’ respective  approaches  were  well  apart  in  that  regard.    The  applicants’  valuer suggested that a relatively paltry sum was appropriate.  The respondent’s valuer, in effect, equated the compensation properly payable to the applicants for surrender of the easement with the market value of the lot.  I consider that both approaches were flawed.

[13]     Both  parties  have  had  a  measure  of  success,  and  in  my view,  the  most appropriate order in the circumstances is that costs should lie where they fall.   I make an order to that effect.

[14]     The draft order attached to Mr Strauss’ memorandum is approved, subject to

the following amendments:

(a)       Clause 2(b) should read, “$47,750 plus GST (if any)…”; (b)   Clause 1 should read, “…by no later than 14 March 2012”;

(c)       An additional clause should be added recording that there is no order

as to costs.

Wylie J