Chief Executive of Land Information New Zealand v Luke HC Auckland CIV 2007-404-57

[2007] NZHC 2049

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2007-404-0057

IN THE MATTER OF     s 40(2) Public Works Act 1981

BETWEEN  CHIEF EXECUTIVE OF LAND INFORMATION NEW ZEALAND Appellant

AND  ETHEL LUKE, MARY JENNIFER MEDLAND, NANCYE MOIR NISBETT AND ALAN RAYMOND CLARK Respondents

Hearing:         16 August 2007

Appearances: Hamish Hancock for Appellant

Julian Miles QC and Andrew Wedekind for Respondents

Judgment:      27 August 2007

JUDGMENT OF HARRISON J

In accordance with R540(4) I direct that the Registrar endorse this judgment with the delivery time of

4.45 pm on 27 August 2007

SOLICITORS

Crown Law Office (Wellington) for Appellant

Morgan Coakle (Auckland) for Respondents

CHIEF EXECUTIVE OF LAND INFORMATION NEW ZEALAND V LUKE & ORS HC AK CIV 2007-404-

0057 27 August 2007

Introduction

[1]      The Court of Appeal has advised  parties seeking  special leave  from this Court to bring what is effectively a second appeal to ‘draw back and appraise the state of the case dispassionately’: Waller v Hider [1998] 1 NZLR 412 at 413-414. The appellate funnel should narrow rather than widen and the focus of an application for leave should be to identify a truly arguable error or errors in the judgment of this Court: Downer  Construction  (New Zealand)  Ltd  v  Silverfield  Developments  Ltd CA65/06, CA156/06, CA157/06, 16 August 2007 at [38]-[44].

[2]      The Crown’s application for leave to appeal against a decision of this Court (the substantive decision) delivered on 11 May 2007 has failed to take account of those well known messages.   The Crown appealed against a decision of the Land Valuation Tribunal, alleging that it erred when determining the price to be paid for land offered back to the original owners under the Public Works Act 1981.   The substantive  decision  sought  to  extract  two  principal  issues  out  of wide  ranging submissions advanced by the Crown on the appeal.   Both issues were answered adversely to the Crown and the appeal was dismissed.

[3]      A  memorandum  filed  by  the  Crown’s  counsel,  Mr  Hamish  Hancock,  in support of this application for leave identifies five questions of law or valuation principles for consideration by the Court of Appeal.  However, the first three and the fifth allege errors by the Tribunal, which is not the body from which this appeal has been brought, and two of them proceed on four or more specific factual premises. Only the fourth identifies an error allegedly made in the substantive decision.

Right of Appeal

[4]      The Crown’s right to appeal to the Court of Appeal is as follows: s 18A Land

Valuation Proceedings Act 1948:

(1)      Notwithstanding anything in any enactment, any party to any proceedings before the Court who is dissatisfied with any award or order of the Court may, with the leave of the Court or of the Court of

Appeal,  appeal  to  the  Court  of  Appeal;  and  section  66  of  the

Judicature Act 1908 shall apply to any such appeal.

(2)       In determining whether to grant leave to appeal under this section, the Court  to which the application for  leave is  made shall  have regard to the following matters:

(a)       Whether   any  question  of   law   or   general  principle   is involved:

(b)      The importance of the issues to the parties: (c)    The amount of money in issue:

(d)      Such other  matters as  in the particular  circumstances  the

Court thinks fit.

(3)       The Court granting leave under this section may in its discretion impose such conditions as it thinks fit, whether as to costs or otherwise.

(4)       The decision of the Court of Appeal on any such appeal shall be final.

[5]      Both ss 66 and 67 Judicature Act 1908 apply.  There was no dispute about the test.  In essence, the High Court must determine whether the matter is sufficiently important, either generally or to the parties, to warrant the Court of Appeal’s consideration.   The Court of Appeal’s function is not one of general correction of error, as it would be against a first instance decision of this Court, but is to clarify the law and determine whether it has been properly interpreted and applied here: Waller v Hider.

Decision

[6]      As noted, Mr Hancock’s memorandum identified only one question of law or general principle arising from this Court’s substantive decision; it was as follows:

Did the High Court (at para [28]) err by treating as of ‘no evidential value’ the sales of comparable properties because the land ‘was sold for different purposes’ from the purpose for sale of the subject property?

[7]      By way of brief background, the substantive decision identified the two main grounds of the Crown’s challenge to the Tribunal’s assessment of market value of the subject  land  at  $4m excluding GST  as being  failures  (1)  to  value  the  land according to its best and highest use; and (2) to take account of relevant valuation

evidence being the sale price of the land agreed in July 2005, some two years after the subject transaction.

[8]      On  this  second  ground  or  issue,  the  substantive  decision  summarised

Mr Hancock’s argument in this way:

[21]      Alternatively,  Mr Hancock  submits  that  the  Tribunal  erred  when fixing fair market value for the land at $4 million, approximating $33 per square metre, by failing to take account of a sale of the same 12.15 hectares together with an additional three hectares by companies associated with the Sovereign interests to WCC on 22 June 2005 for a total of $15.5 million or

$121 per square metre (this assessment is arithmetically incorrect; the averaged price per square metre is $102.31).  Mr Hancock says that, putting aside all benefits of hindsight, an increase in value approaching 400% in only two years is a strong indication that the valuation figure is ‘patently inadequate and irrational’, ‘extremely unjust’ and could only have occurred

‘through a failure properly to apply correct valuation principles’.

[9]      That submission was rejected on largely factual grounds.  The increase in the property’s value over the relevant period was in fact 173%, not 400% as argued by Mr Hancock, through a time of considerable market movement.   The Court was satisfied that the Tribunal did not err in giving no weight to the transaction.   This question was of an intensely factual nature, and a sale some two years after the subject transaction was of no material assistance in assessing a fair market value.

[10]     Mr Hancock alleges that the substantive decision was in error, and that an arguable question for consideration by the Court of Appeal arises separate from this finding:

[28]      Mr Hancock also submits  that  the Tribunal failed  to  take proper account of two other sales of Hobsonville air base land.  In April 2003 the Crown sold 30.4912 hectares to Housing Corporation of New Zealand at

$22 million or $72 per square metre; and in October 2003 it sold a further

8.8 hectares to the Ministry of Education for $2.96 million or $45 per square

metre.  But these transactions were of no evidential value.  The land in both was sold for different purposes – the first for residential and the second for educational.

[11]     When addressing the question arising from para [28], Mr Hancock submitted that the Court erred in failing to rectify the Tribunal’s alleged error in not taking proper account of two other sales of Hobsonville air base land.  The averaged prices of $72 or $45 per square metre were higher than the figure of $33 per square metre

fixed by the Tribunal.  His general submission was that the purpose or ultimate use does not justify one piece of land being sold at a lower price than an adjoining comparable piece of land.  His written and oral arguments were principally an attack on Waitakere City Council for its intention to zone the land for a marine cluster type industrial development.  His essential complaint was that it used its planning powers to devalue the subject land, thereby deriving an advantage (in a way that was not clearly articulated but was plainly irrelevant to the issues under consideration).

[12]     Despite many invitations, Mr Hancock failed to identify a question of general principle or law arising from para [28] of the substantive decision.  He focused more on the facts that a large amount of money is in issue or the question is important to the Crown.  Those factors are not sufficient of themselves to justify exercising this Court’s discretion to grant leave.  A question of law or general principle must first arise for consideration before other statutory factors come into play and the Court of Appeal is asked to commit its resources to determining what is essentially a question of valuation practice.

[13]     With respect, this case, as much as any I have previously heard, calls for a dispassionate appraisal by the Crown of its strategy of pursuing every avenue of appeal, regardless of its merit.

Result

[14]     The Crown’s application for leave to appeal is dismissed.  The Luke interests are entitled to costs and disbursements for two counsel fixed according to Category

2B.

Rhys Harrison J