Commercial Properties Limited v Hutt City Council
[2019] NZHC 2243
•6 September 2019
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2018-485-714
[2019] NZHC 2243
UNDER the Public Works Act 1981, the Judicial Review Procedure Act 2016 and Part 30 of the High Court Rules IN THE MATTER OF
an application for judicial review
BETWEEN
COMMERCIAL PROPERTIES LIMITED
First Applicant
MAXAM CORPORATION LIMITED
Second ApplicantGRAEME CROMIE and PETER ROBERT SEWELL
Third Applicants
AND
HUTT CITY COUNCIL
Respondent
Hearing: 20 August 2019 Counsel:
M J Slyfield and G M Richards for applicants S M Bisley and P J Niven for respondent
Judgment:
6 September 2019
RESERVED JUDGMENT OF DOBSON J
COMMERCIAL PROPERTIES LTD v HUTT CITY COUNCIL [2019] NZHC 2243 [6 September 2019]
Contents
Introduction [1]
The factual background [5]
Source of the power of compulsory acquisition [21]The power invoked at the time [52]
Challenge one – the notices were defective [66]
Challenge two – properties not required for a local work [84] Challenge three – the Council has not demonstrated financial responsibility or control over proposed works [91]
Challenge four - potential re-sale beyond the purposes for acquisition, or an improper purpose
for acquisition [95]
Summary [99]
Costs [104]
Introduction
[1] This application for judicial review challenges the lawfulness of the process by which the respondent (the Council) has given notice of its intention to compulsorily acquire the applicants’ properties in Daly Street, Lower Hutt. The Council is the local and territorial authority under the Local Government Act 2002 (LGA) with responsibility for an area including the Lower Hutt central business district (CBD).
[2] The first applicant is the registered proprietor of 10 and 12 Daly Street, Lower Hutt. The second applicant has a registered interest as mortgagee of the property at 12 Daly Street. The third applicants are the registered proprietors of 7-9 Daly Street, currently in their capacity as trustees of the Morice Trust.1 The interests of each of the applicants is indistinguishable for relevant purposes and they are adequately all referred to as the applicants. Except where circumstances require one or more property to be separately identified, they are all referred to as the properties.
[3] An analysis of the legal requirements imposed on the Council when moving to acquire land compulsorily is complicated by an unresolved rationalisation of the sources of that power, which arguably arise under the terms of two statutes – the LGA and the Public Works Act 1981 (PWA). That issue of statutory interpretation has to be resolved in order to measure the lawfulness of the Council’s process against the grounds for challenge raised by the applicants.
1 At the time of the notices under challenge, the legal owners held as trustees for another entity, the Remico Trust.
[4] First, however, it is necessary to explain the somewhat protracted history of the Council’s approach to the locality, including the properties in Daly Street.
The factual background
[5] For a substantial period, urban planners and those responsible for development of the Lower Hutt CBD have recognised that it has become an unattractive place to live, work and play. One strategy developed to enhance Lower Hutt’s CBD has been to create a promenade area up the western boundary of the existing CBD, adjoining the Hutt River and a stop bank to the east of the river affording flood protection for the CBD.
[6] As presently configured, Daly Street runs roughly north and south, with the properties comprising a significant part of the block between Margaret Street to the north and Andrews Avenue to the south. There are no buildings on the western side of Daly Street which, after provision for a single line of car parks, then abuts on its western side the eastern fringe of the existing stop bank. A map showing the properties is attached to this judgment as Annexure A.
[7] The concept of a promenade facing the river had been floated before 2009. The concept was then included in the Council’s “Vision CBD 2030”, a strategic planning document issued by the Council in 2009. In the same year, the Council publicly launched its “CBD Making Places” project”. Around that time, the Council also worked on a proposed district plan change (Change 14), which it publicly notified on 9 February 2019. Change 14 introduced a design guide that referred to the development of a promenade in the Daly Street area to open that part of the CBD on its western aspect to facilities on the eastern bank of the Hutt River.
[8] In May 2009, the first applicant purchased 12 Daly Street. In May 2012, Council officers undertook email correspondence with Messrs Savage and Cromie, the two individuals most closely involved with ownership issues on the property, regarding a merger of any development at Daly Street with the stop banks.
[9] In the first half of 2013, Council officers participated in dialogue with the Wellington Regional Council (WRC) and the New Zealand Transport Agency (NZTA)
on their respective interests in this area. The WRC has responsibility for flood protection works and NZTA was assessing the prospects of upgrading facilities at the Melling Interchange, which is on the western side of the Hutt River, roughly adjacent to the area of the proposed promenade on the eastern bank in the Daly Street area.
[10] During September 2013, the Council held meetings with the owners of properties in the area to update them on the progress with the project. In November 2013, the Council, together with WRC and NZTA, held a workshop to explore the options for combining the stop bank, Daly Street and future buildings as part of the Hutt River city centre upgrade project.
[11]In December 2013, the third applicants purchased 7-9 Daly Street.
[12] From March 2015 onwards, there were occasional exchanges between the Council and the applicants and a planner retained by the applicants addressing a development that the applicants contemplated for 12 Daly Street. By August 2016, the applicants indicated that in the absence of positive engagement with them on behalf of the Council about the proposed developments, they would proceed with alternative plans for the properties.
[13] In September 2016, the applicants lodged an application for subdivision of a triangular wedge of some 200 square metres off the Daly Street frontage of 10 and 12 Daly Street. The following month, the regulatory section of the Council dealing with such applications granted the consent to subdivide under the Resource Management Act 1991.
[14] In the meantime, in September 2016, the Council made a first offer to purchase the properties. There were later negotiations in May 2017 when Urban Plus Limited (Urban Plus), a Council-controlled trading organisation, met with the principals of the applicants. Negotiations on price stalled because the applicants contended that the appropriate valuation ought to include a component that projected the profit representing the increase in value of the properties once the contemplated development had been concluded. The Council took the view that the appropriate mode of valuing properties on such acquisition could not include any such component.
[15] On 12 June 2017, the Council reviewed the position that had been reached in negotiations and voted to acquire the properties using compulsory acquisition provisions in the PWA. Four days later on 16 June 2017, the Council served on the applicants notices of its desire to acquire the land, which was the first formal step required in the procedure provided for in the PWA.
[16] Spanning these developments, at the end of March 2017, the applicants had lodged an application for resource consent to construct apartment buildings on the main parts of their site at 10 and 12 Daly Street. The regulatory section of the Council granted resource consent for that development on 11 October 2017.
[17] Further negotiations conducted on behalf of the Council by Urban Plus took place between November 2017 and early June 2018, which did not result in any agreement for the acquisition of the properties by the Council.
[18] On 7 June 2018, the Council served on the applicants notices of its intention to take the properties.
[19] At the end of June 2018, the principals of the applicants met with The Property Group Limited, the agency used by the Council to progress acquisition of the properties, presenting an offer to sell at a 25 per cent premium on the market value of the properties. The Council representatives present noted the applicants as threatening “war” if a sale was not agreed to on their terms and that they would drag out the process of compulsory acquisition “for years”. The initiatives to do this included the applicants filing an objection to the notices of intention to acquire the properties in the Environment Court and commencing judicial review proceedings of the type that have now been heard.
[20] Environment Court proceedings arising out of the applicants’ foreshadowed objection have been adjourned pending the outcome of this judicial review.
Source of the power of compulsory acquisition
[21] The applicants submitted that the provisions in the LGA authorised local authorities to resort to powers to acquire, but did not empower them to do so. The
provisions recognising the power were characterised as a “gateway”, but did not create a separate power to acquire on its own terms. Arguably, it would follow that a local authority wishing to compulsorily acquire would still have to satisfy all the conditions for exercising the power that are required under the PWA.
[22] On the other hand, the Council submitted that the LGA does empower compulsory acquisition in certain circumstances. If the relevant circumstances do exist, then the sequence of steps required to be taken has to follow the processes specified in the PWA. It follows from this approach that the somewhat wider circumstances in which the power could be exercised, and the lower threshold required before doing so in the terms of the LGA, would apply to empower the Council to move to compulsory acquisition of the properties in this case.
[23] The history of statutory provisions for compulsory acquisition has not evolved in step, at least chronologically. Part 2 of the Public Works Act 1928 included provisions for the taking of lands for public works, comprising government works by central government and local work by local authorities. That Act was superseded by the PWA. The empowering provisions for the compulsory acquisition of land and the process to be followed were expressed in materially similar terms.
[24] The legislation governing the powers of local authorities was contained in the Local Government Act 1974 and then, in a relatively more substantial recasting, in the LGA. A feature of the LGA is the introduction of the concept of general competence empowering local authorities, for the purposes of performing their roles, with full capacity to carry on or undertake any activity or business, or to do any act or enter into any transaction, subject to the more detailed provisions of that and other statutes.
[25] In addressing compulsory acquisition of land, the LGA provided for a power to acquire land in terms that use cross-references to two other statutes. First, the PWA and secondly the previous Local Government Act of 1974. The relevant provisions in the LGA are as follows:
189Power to acquire land
(1)A local authority may purchase, or take in the manner provided in the Public Works Act 1981, any land or interest in land, whether within or
outside its district, that may be necessary or convenient for the purposes of, or in connection with, any public work that the local authority was empowered to undertake, construct, or provide immediately before 1 July 2003.
(2)All land taken, purchased, or acquired under the Public Works Act 1981 is vested in the local authority for the purpose for which it was acquired and is subject to the provisions of that Act as to a change of the purpose or its disposal.
190Compensation payable by local authority for land taken or injuriously affected
This section applies to a person having an estate or interest in land—
(a)taken under the authority of this Act for any public work; or
(b)injuriously affected by any public work; or
(c)suffering any damage from the exercise of any of the powers given by this Act.
(2)A person is entitled to full compensation from the local authority for the matters referred to in subsection (1)(a), (b), or (c) to the extent provided in the Public Works Act 1981.
(3)The compensation may be claimed and must be determined in the manner provided by the Public Works Act 1981.
[26] The reference in s 189(1) to any public work that the local authority was empowered to undertake immediately before 1 July 2003 is a shorthand cross- reference to the extended definition of what constituted a public work under the Local Government Act 1974, which included the following:
247F Power to acquire land
(1)Every local authority may purchase, take in the manner provided in the Public Works Act 1981, or otherwise acquire and hold, any land or interest in land, whether within or outside the district, which may be necessary or convenient—
(a)For the purposes of or in connection with any public work that the local authority is empowered to undertake, construct, or provide; or
(b)For carrying out any of the functions, duties, or powers of the local authority under this Act or any other Act.
(2)All land taken, purchased, or acquired under the Public Works Act 1981 shall be vested in the local authority for the purpose for which it was acquired and shall be subject to the provisions of that Act as to a change of that purpose or its disposal.
644A Interpretation
In this Part of this Act, unless the context otherwise requires,—
Council means a territorial authority
District means the district of a territorial authority
House means any building, tent, caravan, or other structure or erection, whether permanent or temporary, which is used or intended to be used in whole or in part for human habitation, and includes the land and any out- buildings and appurtenances belonging thereto or usually enjoyed therewith
Urban renewal means the conservation, repair, or redevelopment of any land, or of any building on any land, within any urban part of the district (or the encouragement thereof), the standard of which should in the opinion of the council be improved; and includes the improvement, reconstruction, extension, development, and redevelopment of the utility services, roading, the landscape, and community and social facilities and services within that part.
644B Council may undertake urban renewal
(1)Subject to the Resource Management Act 1991, the council may undertake and carry out urban renewal in the district.
(2)Urban renewal is hereby declared to be a public work for the purposes of the Public Works Act 1981.
[27] The effect of those provisions was to give local authorities the power to acquire and hold land, among other things, for the purpose of any public work that the local authority is empowered to undertake, where urban renewal initiatives, as defined in s 644A, would constitute such a public work for the purposes of the PWA.
[28] The effect of incorporating initiatives of urban renewal means that on the terms of s 189 (assuming, without deciding at this point, that it creates a stand-alone power) a local authority may take land that may be necessary or convenient for the purposes of public works, including urban renewal. Projects involving urban renewal require only an opinion by the Council that the land in question, or buildings on it, should be improved.
[29]The relevant provisions in the PWA are drafted in narrower terms:
16 Empowering acquisition of land
(1)The Minister is hereby empowered to acquire under this Act any land required for a Government work.
(2)Every local authority is hereby empowered to acquire under this Act any land required for a local work for which it has financial responsibility.
18 Prior negotiations required for acquisition of land for essential works
(1)Where any land is required for any public work the Minister or local authority, as the case may be, shall, before proceeding to take the land under this Act—
(a)serve notice of his or its desire to acquire the land on every person having a registered interest in the land; and
(b)lodge a notice of desire to acquire the land with the Registrar- General of Land who shall register it, without fee, against the record of title affected; and
(c)invite the owner to sell the land to him or it, and, following a valuation carried out by a registered valuer, advise the owner of the estimated amount of compensation to which he would be entitled under this Act or the betterment that he may be liable to pay; and
(d)make every endeavour to negotiate in good faith with the owner in an attempt to reach an agreement for the acquisition of the land.
(2)If, after a period of 3 months,—
(a)the owner fails to respond to any invitation issued under subsection (1); or
(b)the owner refuses to negotiate with the Minister or the local authority, as the case may be; or
(c)an agreement for the sale and purchase of the land is not made with the owner under section 17,—
the Minister or local authority may, within 1 year after notifying the owner under subsection (1), proceed to take the land under this Act.
(3)Any notice under subsection (1)—
(a)may be withdrawn by the Minister or local authority at any time; and
(b)shall, in relation to any person and his interest in the land, be deemed to have been withdrawn at the expiration of the period of 1 year beginning on the day after the date on which the notice was served on that person unless, before the expiration of that period,—
(i)proceedings have been commenced under subsection (2); and
(ii)notice of the commencement of those proceedings has been given to that person.
(4)Where any notice under subsection (1)—
(a)has been withdrawn by the Minister or local authority under subsection (3)(a); or
(b)has been deemed to be withdrawn by virtue of subsection (3)(b)—
the Minister or local authority, as the case may require, shall give notice to that effect to the Registrar-General of Land who shall register it, without fee, against the title to the land.
…
23Notice of intention to take land
(1)When land (other than land owned by the Crown) is required to be taken for any public work, the Minister in the case of a Government work, and the local authority in the case of a local work, shall—
(a)cause a survey to be made and a plan to be prepared, and lodged with the Chief Surveyor, showing the land required to be taken and the names of the owners of the land so far as they can be ascertained; and
(b)cause a notice to be published in the Gazette and twice publicly notified giving—
(i)a general description of the land required to be taken (including the name of and number in the road or some other readily identifiable description of the place where the land is situated); and
(ii)a description of the purpose for which the land is to be used; and
(iii)the reasons why the taking of the land is considered reasonably necessary; and
(iv)a period within which objections, other than objections by persons who are served with a copy of the notice under subsection (1)(c), may be made; and
(c)serve a notice on the owner of, and persons with a registered interest in, the land of the intention to take the land in the form set out in Schedule 1.
(2)The provisions of this section requiring the names of the owners of the land to be shown on the plan of the land shall have no application in respect of any Maori land unless title to the land is registered under the Land Transfer Act 2017, but instead the plan shall be endorsed
with the advice that the names of the owners may be obtained at the appropriate Maori Land Court.
(2A) For the purposes of subsection (2), land that is registered with a qualified record of title is not land that is registered under the Land Transfer Act 2017.
(3)Every person having any estate or interest in the land intended to be taken may object to the taking of the land to the Environment Court in accordance with the provisions of the notice.
(4)Every notice of intention to take land given under this section shall, on the expiration of 1 year after the date of the publication in the Gazette of the notice, cease to have effect unless, on or before the expiration of that year,—
(a)a Proclamation taking the land has been published in the Gazette; or
(b)the Minister or the local authority has, by a further notice in writing served on the owner of the land, and persons with a registered interest in the land, intended to be taken, so far as they have been ascertained, confirmed the intention, subject to the provisions of this Act, of taking the land; or
(c)the intention to take is the subject of any inquiry by the Environment Court or an Ombudsman, or of any application for a judicial review, in which case the notice of intention shall remain valid for 3 months after the date of the Environment Court’s report or the date on which the Environment Court received written notice of the withdrawal of the objection, or the date of the completion of any inquiry by an Ombudsman, or the judicial decision, as the case may be.
(5)Where the Minister or local authority has confirmed the intention of taking the land, the notice of intention so confirmed shall cease to have effect unless, on or before the expiration of 2 years after the date of such confirmation, a Proclamation taking the land has been published in the Gazette.
…
24Objection to be heard by Environment Court
(1) On receiving a written objection under section 23, the Environment Court shall, as soon as practicable, send a copy of the objection to the Minister or local authority, as the case may require.
…
(7)The Environment Court shall—
(a)ascertain the objectives of the Minister or local authority, as the case may require:
(b)enquire into the adequacy of the consideration given to alternative sites, routes, or other methods of achieving those objectives:
(c)in its discretion, send the matter back to the Minister or local authority for further consideration in the light of any directions given by the court:
(d)decide whether, in its opinion, it would be fair, sound, and reasonably necessary for achieving the objectives of the Minister or local authority, as the case may require, for the land of the objector to be taken:
(e)prepare a written report on the objection and on the court’s findings:
(f)submit its report and findings to the Minister or local authority, as the case may require.
…
[30] Accordingly, on the terms of s 16(2), a higher standard is arguably required under the PWA because a local authority does not have power to acquire land unless it is required for a local work for which that authority has financial responsibility.
[31]“Local work” is defined in s 2 of the PWA to mean:
… a work constructed or intended to be constructed by or under the control of a local authority, or for the time being under the control of a local authority …
That definition adds a further requirement that the work to be constructed on land to be acquired also has to be constructed by or under the control of the local authority.
[32] The issue of statutory interpretation is therefore whether Parliament is taken to have intended two sets of overlapping provisions. Under the narrower provisions in the PWA, the powers of a local authority are substantially similar to those of central government, arising only where the local authority has financial responsibility for a local work and where the work is to be constructed or intended to be constructed by or under its control. In contrast, under the LGA, land may be compulsorily acquired even if merely convenient, rather than necessary, for the purposes of, or in connection with, a public work. By cross-reference to the earlier provisions in the Local Government Act 1974, this includes the broad circumstances in which a local authority may come to the view that urban renewal is appropriate. The land acquisition does
not need to be for construction that is to be under the control of the local authority and the public work may be one which the local authority is either empowered to undertake, construct or to provide.
[33] For the Council, Mr Bisley submitted that Parliament intended to empower compulsory acquisition in wider circumstances for local authorities. This is because in areas such as urban renewal they have wider responsibilities requiring the acquisition of land than central government, which is generally concerned with the provision of essential services such as the national roading network.
[34] The terms used in s 189(1) of the LGA have, in its heading, an acknowledgement that the section is addressing the power to acquire land. That power is to take:
… in the manner provided in the [PWA], any land … that may be necessary or convenient for … any public work that the local authority was empowered to undertake [under the previous Local Government Act 1974].
[35] The phrase “in the manner” does suggest a cross-reference to the required process for acquiring land, rather than a cross-reference to the existence of the power itself.
[36] Further, the purposes for which the power in s 189 of the LGA may be exercised need only to be convenient in connection with, for example, some project of urban renewal. That is clearly inconsistent with the scope of the power under the PWA. If the power was only that provided for in the PWA, then the drafters of s 189 would have been creating a material inconsistency. There is not sufficient in all the other indications as to meaning to support the proposition that the creation of such an inconsistency was indeed intended.
[37] Section 189(2) may be treated as containing a contrary indication: referring to land “acquired under the [PWA]” could, if considered in isolation, suggest that land so taken had been acquired invoking the powers in the PWA.
[38] Then s 190(1)(a) of the LGA, in providing for compensation, refers to those whose estate or interest in land has been “taken under the authority of this Act”, which
suggests the draftsperson contemplated that the immediate provisions in the LGA provided authority for compulsory acquisitions.
[39] The provisions in s 190(2) and (3) are cast in terms suggesting the draftsperson was cross-referring to the provisions in the PWA as a shorthand reference for the process for seeking compensation, rather than any suggestion that local authorities depended on the provisions in the PWA to compulsorily acquire land.
[40] Balancing these different possible indications as to parliamentary intent in the terms of the respective provisions, I conclude that the intention of the terms in the LGA is to provide a stand-alone power that is overlapping, and to an extent broader than, those in the PWA. The drafters of the LGA have resorted to cross-reference to the fuller provisions for the process by which dealings between the local authority and the land owner are to occur, by referring to the manner in which such steps are to be taken and the process for determining compensation in the PWA.
[41] Casting more widely, counsel’s research revealed very little by way of parliamentary commentary on the apparent difference in scope between the compulsory acquisition provisions in the PWA and in the LGA. The only reference to the provisions in the explanatory note to the Local Government Bill on its introduction was that subpart 9, which contained the relevant provisions, “authorises a local authority to purchase or take land under the Public Works Act 1981”.2
[42] That is not an adequate statement of parliamentary intent to support the Council’s contention that Parliament intended the LGA to empower local authorities to compulsorily acquire land in broader circumstances than under the PWA. Nor does it support the applicants’ contrary contention that the terms of the LGA only authorise local authorities to exercise the power, the empowerment itself being in the PWA and therefore confined to be exercised only when the conditions stipulated in the PWA were met. The concept of taking land “under the Public Works Act 1981” might equally mean only in the circumstances there permitted, or applying the machinery provisions set out in the PWA which rendered their repetition in the LGA otiose.
2 Local Government Bill 2001 (191-1) (explanatory note) at 13.
[43] The parties were at odds as to whether the nature of the power in question should influence the approach to interpretation of the potentially conflicting provisions. For the applicants, Mr Slyfield submitted that the courts still recognise an obligation to construe strictly against the Crown any provisions entitling the Crown to compulsorily acquire privately owned land. Mr Slyfield cited the adoption by the Court of Appeal in Minister for Land Information v Seaton of the observation by Hammond J in Deane v Attorney-General, where the point was made as follows:3
The power of the Crown to compulsorily acquire land derives from the ancient notion of eminent domain. It is today a draconian – but necessary power – in a complex, and collective society. But to the extent that the Crown’s powers are a direct interference with individual property rights, our Courts – in company with Courts elsewhere in the British Commonwealth – have insisted that, always bearing in mind the purpose of any given powers ... , powers of this kind are strictly construed; must be exercised in good faith ... ; and even- handedly.
[44] Mr Slyfield submitted that a similar approach was adopted in the United Kingdom. He cited a decision in which potential ambiguity arose as to the point in time at which valuations were to be undertaken where compulsory acquisition of land had progressed in stages.4 The scope of the right to compulsorily acquire was not in issue. In the Court of Appeal, Purchas LJ was mindful of the concept that the statute was one which deprived the citizen of his rights in property and that the provisions for calculation of compensation ought to be constructed in a manner favourable to the owner of the land where those provisions were primarily enacted for the protection of such a person.
[45] I am not persuaded that the reasoning in that somewhat different context is helpful here.
[46] Mr Bisley argued against the consequence of the power being deprivation of rights to private land ownership as influencing the correct interpretation of the relevant provisions in the LGA. The task is to ascertain the meaning from the text in light of its purpose, and there should arguably be no scope for influencing the interpretative
3 Deane v Attorney-General [1997] 2 NZLR 180 (HC) at 191 (footnotes omitted), as cited in
Minister for Land Information v Seaton [2012] NZCA 234, [2012] 2 NZLR 636 at [53].
4 Chilton v Telford Development Corporation [1987] 1 WLR 872 (CA) at 878– 879.
analysis by reading down the power in question because it involved deprivation of private property rights.
[47] Mr Bisley invited analogy with a recent decision of Cooke J on the approach to interpretation of provisions in the Accident Compensation Act 2001. In McKeefry v Accident Compensation Corporation, Cooke J rejected the notion that the task of interpreting that statute should involve the adoption of a “generous and unniggardly approach”:5
[8] For myself I do not find the additional verbal formulations — such as adopting a generous or unniggardly approach — to be helpful. They seem to me to unduly complicate the task. The general approach described in Algie is consistent with the observation of the Supreme Court in Terminals (NZ) Ltd v Comptroller of Customs that particular legislation (in that case tax legislation) does not involve a different approach to statutory interpretation, and that the position of one party or the other is not to be preferred. For all legislation the task is to interpret the text of the enactment in light of its purpose. With legislation that involves an overall statutory scheme, that scheme will be of significance in understanding the meaning of particular provisions within it. The objective must be to make the Act work as Parliament must have intended.
[48] I consider that the consequences of exercise of the power still justify an approach whereby, in interpreting the scope of the power and processes involved in its exercise, relevant provisions are to be strictly construed against the exerciser of the power. In the present circumstances, it may not have significant impact. It certainly cannot detract from the usual task of ascertaining meaning in light of text and purpose. The purpose of the relevant provisions in both the PWA and the LGA is to prescribe the circumstances in which the Crown or a local authority can compulsorily acquire land and the process to be followed when the power is invoked. Parliament can be taken to have appreciated that the limits on the power to override rights of private ownership of land will be carefully defined because of the adverse consequences for the private land owner.
[49] Mr Bisley submitted that if perceived inconsistencies between the scope of the powers for compulsory acquisition in the PWA and the LGA could not otherwise be rationalised, then the doctrine of implied repeal should apply. The broader powers in
5 McKeefry v Accident Compensation Corporation [2019] NZHC 612 (citations omitted).
the (later) LGA should be treated as impliedly repealing the narrower scope of the powers provided in respect of local authorities in the (earlier) PWA. Mr Bisley also characterised the PWA as a statute of general application, which ought to cede to a later statute of more specific application. He cited the reasoning of Richardson J in Stewart v Grey County Council:6
To the extent that the continued application of a general enactment to a particular case is inconsistent with special provision subsequently made as respects that case, the general enactment is overridden by the particular, the effect of the latter being to exempt the case in question from the operation of the general enactment or, in other words, to repeal the general enactment in relation to that case.
[50] In that case, the Court was dealing with an apparent inconsistency between the provisions in the Mining Act 1971, which are treated as an exclusive code in respect of the use of land for mining purposes, and the more general provisions of resource management legislation, at that time the Town and Country Planning Act 1953. In adopting the passage cited above from Halsbury, Richardson J was referring to the second of two principles that might apply in resolving inconsistencies between the provisions of different statutes. He had introduced his analysis in the following terms:7
It is inevitable that in the complex legislative processes of a modern society there will be occasional conflicts and inconsistencies between the provisions of different statutes. There are well established rules for determining which provisions are to prevail. The starting point, of course, is that there be an inconsistency. If it is reasonably possible to construe the provisions so as to give effect to both, that must be done. It is only if one is so inconsistent with, or repugnant to the other, that the two are incapable of standing together, that it is necessary to determine which is to prevail.
[51] Resort to any notion of implied repeal could only be justified where the inconsistency was stark and otherwise irreconcilable. However, I am satisfied that the inconsistencies are capable of being reconciled without so drastic a step as implying partial repeal of the empowering provisions for compulsory acquisition in the PWA. The broader terms of the LGA reflect parliamentary recognition of the wider circumstances in which it will be lawful for a local authority to compulsorily acquire private property, such as in circumstances where it is undertaking urban renewal. That
6 Stewart v Grey County Council [1978] 2 NZLR 577 at 583, citing Halsbury’s Laws of England
(3rd ed, 1952) at [712].
7 Stewart v Grey County Council, above n 6, at 583.
makes references to the processes spelt out in the PWA sensible. In interpreting the scope of powers provided for in both statutes, the differences are reconcilable.
The power invoked at the time
[52] The Council’s resolution of 12 June 2017 was expressed in terms that, failing purchase of the properties on the open market:
… if reasonable agreement cannot be reached between the parties and it is considered to be fair, sound and reasonably necessary to acquire the properties compulsorily, acquire the properties compulsorily using the Public Works Act 1981 …
[53] Four days later, on 16 June 2017, notice of desire to acquire the land, the first step in the process, was served. The notice stipulated in each case that it was given pursuant to s 18(1)(a) of the PWA and that the Council desired to acquire the land “for urban renewal, redevelopment and regeneration, for the Promenade Project”. The notice also advised that if agreement was not reached within three months, then the Council “may proceed to take the land under the provisions of the [PWA]”.
[54] The Council notices of intention to take the land, dated 31 May 2018 and served on 7 June 2018, recorded the Council as proposing to take the land under the PWA. The notices stipulated that the land was required:
… for construction of the Promenade Project … More particularly, the land is required for urban renewal, redevelopment and regeneration.
The notices then set out seven reasons for taking the land.
[55] The applicants filed an objection to the notices in the Environment Court in early July 2018. In mid-August 2018 the Council filed a reply to that objection, recording the Council’s reliance on the provisions of the PWA “as statutory authority to take the Land”, and making explicit references to:
(a)section 16(2) as empowering the Council to acquire the land;
(b)section 18 as empowering the Council to serve notices of its desire to acquire the land; and
(c)section 23 as empowering the Council to cause a notice to be published in the Gazette describing the land required for a public work and other relevant details.
[56] The reply to the objection also stated that the Council relied on the powers granted to it by the LGA, in particular ss 10–12 and 189. The statement referred to the public work being undertaken for urban renewal, being work of a type the Council was empowered to undertake.
[57] Mr Slyfield submitted that the terms of the Council resolution and the formal notices served in 2017 and 2018 all made reference only to the PWA, so that the Council should be treated as having exercised that statutory power. Incidentally, Mr Slyfield submitted that approach reflected a correct understanding of the source of the Council’s power to compulsorily acquire the land.
[58] In its statement of defence in the present proceeding, the Council has denied that it issued the notices under s 16(2) of the PWA and also pleaded that the notices were issued pursuant to the power in s 189 of the LGA. Mr Slyfield submitted that it was clear from the Council’s records in 2017 and 2018 that it considered it was exercising a compulsory acquisition power under the PWA. He contended that, even if the Council is correct in treating the acquisition power under the LGA as a stand- alone power able to be exercised where the conditions in that Act apply, its conduct at the relevant time demonstrates reliance on the PWA. Accordingly, the different standards for invoking the acquisition power under the PWA were required to be made out in order for the decision and service of the notices to be lawful.
[59] Both the June 2017 and May 2018 notices appear to have been drafted taking into account the provisions of the LGA. They stipulated that the land was required “for urban renewal, redevelopment and regeneration”. Those expressions are not relevant to the provisions of the PWA, but do reflect the wider circumstances in which the LGA authorises the exercise of the power of compulsory acquisition. It is therefore reasonable to assume that the drafters of those notices had in mind the scope of powers specified in the LGA.
[60] That indirect reference to relevant requirements that were found other than in the PWA is, however, insufficient to put the applicants on notice as to the Council’s understanding of the acquisition power that it was invoking. Although it is not decisive in determining the lawfulness of the Council’s conduct, I consider it was reasonable for the applicants to understand that the compulsory acquisition power being used by the Council was the power in the PWA. That understanding of the statutory provisions in issue may be relevant in other contexts.
[61] In the event that I found the Council was relying on the PWA provisions in resolving to compulsorily acquire the properties in June 2017, Mr Bisley submitted that such a mistake (on his analysis that the power being exercised was that under the LGA) was not material because the steps it took complied with the PWA. The Council had resolved that the promenade project was a key component of its larger plans for the CBD and the acquisition of the properties was critical to its implementation. There were reasonable grounds at that time for the Council to believe that the land was required for a local work for which it had financial responsibility.
[62] Arguably, the Council’s decisions were made after satisfying itself as to the existence of all the conditions that would have been necessary, had it applied the requirements of the narrower statutory provision in the PWA. Mr Bisley cited the decision in Waimea Nurseries Ltd v Director-General for Primary Industries, in which the respondent Ministry, having issued orders for the destruction of plants, was found to have applied the wrong set of statutory provisions.8 The correct provisions applying to the circumstances of the concerns motivating the Ministry’s action involved greater recognition of the interests of the owner of the materials and a different balance in the effective management of risks relative to those interests. In that case, Cooke J observed:
[51] As a general proposition, a statutory decision-maker is not able to rely on alternative statutory powers to justify a decision, particularly when there are additional requirements. The position appears to be different in Australia. But in New Zealand these issues can be addressed under the discretion as to relief. Where another power is relied upon to save a challenged decision and it seems clearly to apply, and when what is involved is a potential biosecurity
8 Waimea Nurseries Ltd v Director-General for Primary Industries [2018] NZHC 2183, [2019] 2 NZLR 107 (citations omitted).
risk, a Court can exercise its discretion in relation to relief so that the new power can be exercised. …
[63] Applying that approach to the Council’s conduct, Mr Bisley submitted that the Council had “ticked all the boxes” required to use the power under the PWA. Because those were more stringent than the conditions for exercise of the power under the LGA, those same considerations must have served to also “tick all the boxes” required under the LGA. It was therefore, at most, a case of the Council misdirecting itself as to the statutory power it was relying on, with no material consequence because it would have undertaken the same assessment and arrived at the same conclusion if it had applied the correct statutory provisions.
[64] This reasoning cannot exempt the Council from a finding that it made an error of law if the relevant steps in exercise of the statutory power were taken in a mistaken belief that it was invoking a power other than that which should have applied. However, I am not satisfied on the facts that was the situation when the Council issued the notices on 16 June 2017 and 31 May 2018. The reference to the land being required for urban renewal, redevelopment and regeneration are implicitly in reliance on the provisions of the LGA. Although the references to the PWA could have been more clearly expressed as matters of cross-reference to the processes that would apply to the taking, on review they can be treated as such.
[65] I accordingly conclude that the provisions in the LGA create a stand-alone power for local authorities to compulsorily acquire private property. Those powers are to be exercised by deploying the processes provided for in the relevant sections of the PWA.
Challenge one – the notices were defective
[66] The applicants allege that the notices failed adequately to identify the public work for which the properties were to be used. Because the statutory requirement to provide that information is found in s 23 of PWA, this challenge arises irrespective of whether the power relied on by the Council was a separate one in the LGA, or that provided in the PWA.
[67] Section 23(1)(b) of the PWA requires the notice to give a description of the purpose for which the land is to be used and also the reasons why the taking of the land is considered reasonably necessary.9 The form of such notices under s 23(1)(c) is prescribed in sch 1 of the PWA. The paragraphs of the form relevant in this context are as follows:
2 The land is required for [insert description of public work] and it is intended to use the land for [describe the purposes for which the land is to be used].
…
4 The reasons why the [insert Minister or name of local authority] considers it essential to take your interest in the land are as follows: [give reasons].
[68] The applicants complain that the reasons cited, namely the construction of the promenade project and more particularly that the land was required for urban renewal, redevelopment and regeneration, were insufficient. The use of uppercase in the phrase “the Promenade Project” in both the 2017 and 2018 notices suggested it was a defined term, when, on the applicants’ argument, it was not a defined term known to them. There had been evolving proposals but the notices did not attribute a sufficiently specific use to enable the applicants to understand what the Council proposed by way of work on their properties. Arguably they needed greater clarity of the specific local works that were intended for the properties.
[69] Mr Slyfield cited by way of example minutes kept by Daniel Moriarty, a representative of Urban Plus, of a meeting on 27 November 2017 with Messrs Cromie and Savage of the applicants. The first item in the minutes was:
[Peter Savage] queried what the [notice of desire to take land] was for specifically – what sites? As there is nothing “site specific” for their properties in terms of what council is going to utilise the site for. The promenade project is more “aspirational” rather than exact.
[70] The minutes of that meeting go on to acknowledge the applicants’ perception of conflict in the Council’s conduct between the procedure to take the properties and the resource management application that had been consented to for their proposed
9 Section 23 is set out at [29] above.
apartment development, which was granted on reasons including that it would not impact on the stop bank realignment.
[71] Mr Slyfield submitted that the applicants needed to be sufficiently informed to consider whether they were willing to negotiate with the local authority, and also to be able to test whether the proposed use was one in respect of which the Council was authorised by statute to acquire land.
[72] Further, the reasons cited for taking the land needed to be sufficiently detailed to enable the owners to consider grounds for any objection to the notice, and that assessment could only take place if the Council had described, with adequate detail, the work it intended to carry out on the properties.
[73] A further reason arising from the procedural provisions in the PWA is to commit the local authority to a purpose for the exercise of the power against which the owner could subsequently assess whether the land had indeed been used for that purpose. In the event that the specified purpose has not been given effect to on the property, then rights to claim the property be offered back might well arise. To monitor the prospect of such rights arising, the notice, in the first instance, needed to provide sufficient detail to assess this prospect. The notice to the owner under s 23 of the PWA has to be the source of the definition of the requisite public work. If it is inadequately defined, the offer-back right becomes ineffectual.
[74] The Council defended the adequacy of the description of proposed works in part by referring to the extent of public information that had been available throughout the period from before the first notices in 2017, and thereafter.
[75] The applicant contended that the reasons and purposes for which the land was to be taken had to be recorded in the notices. It was inappropriate for the Council to assume a level of knowledge on the part of the owners that would require them to flesh out relevant details from sources other than the notices themselves. That would lead to difficulties in assessing the sufficiency of the detail and gives rise to the prospect for confusion and misunderstanding. I accept the validity of these concerns for the applicants and analyse the notices on the basis that they must provide sufficient detail
in themselves, and certainly not by means of unspecified expectations of other matters assumed to be known to the owners.
[76] The adequacy of such notices has been considered previously. The Council cited older authority for the proposition that a mere irregularity in form, where the requirements of the statute had been complied with in substance, will not invalidate a notice of intention.10
[77] In reliance on subsequent authority, Mr Slyfield argued that the inadequacies in the descriptions complained of in this case could not be dismissed as “irregularities”. He cited the decision of Auckland Meat Company Ltd v Minister of Works, in which a notice of intention to take land was specified to be “for better utilisation”.11 That was held to be inadequate in a respect that was more than an irregularity. Hutchison J required that the notice should put the owner in a position to make a well-grounded objection to the execution of the works or the taking of the land, a standard which had not been met in that case.
[78] The Council relied on the decision in Chan v Lower Hutt City Corporation.12 In that case, the owner of one of 21 properties taken by the local authority objected to the adequacy of the description in the notice of intention to take the land. It was expressed as a taking of:13
… the lands described in the schedule hereto as being necessary for the proper development of the said lands in accordance with the operative district scheme of the city for uses permitted in a commercial B zone under the code of ordinances.
[79] Adopting the test of the adequacy of the description from Auckland Meat Company, Beattie J concluded that the notice of intention to take was not defective. The words used were a sufficiently explicit description in reference to a plan which enabled the applicant to file an objection. In the present case, regardless of the complaints raised in this judicial review, the applicants have indeed filed an objection with the Environment Court to which the Council has responded.
10 Minister of Public Works v Hart [1904] AC 259.
11 Auckland Meat Company Ltd v Minister of Works [1963] NZLR 120.
12 Chan v Lower Hutt City Corporation [1976] 2 NZLR 75.
13 At 79.
[80] Mr Bisley submitted that the requirement for a general description had indeed been provided in sufficient detail, as instanced by the applicants’ ability to pursue their objection to the Environment Court.
[81] The level of detail in providing a “general description” will depend on the circumstances of each case. I reject the Council’s entitlement to complement the detail provided in the notices by reference to other publicly available information about the promenade project, including matters of which the Council could establish the applicants were aware.
[82] Certainly, the content of the notices could have been improved, such as by making a reference to the then current iteration of the Council’s proposals for the area, with specific reference to the need for involvement of the subject properties within it. Such definition by incorporation could appropriately have been on terms that the detailed specifications for structures on the properties were liable to change, but would continue to be in pursuit of the construction of a promenade project for the area, deemed to be required for urban renewal, redevelopment and regeneration. However, the prospect of improvement in the extent of the description cannot of itself render the description that was provided to be less than the standard of a “general description” as required. I am satisfied that the notices did meet that basic standard, in line with the approach in Chan. The description was adequate to enable the applicants to object, and it would be sufficient to assess whether the Council subsequently uses the properties for other than the stipulated purpose so as to trigger the offer-back provisions.
[83] The statutory processes would not achieve the legitimate aims of local authorities in co-ordinating developments of this scale if compulsory acquisition could only be justified once all finite details were resolved and included in the “general description”. That would require the acquisition to be deferred until all aspects were definitively planned, thereby risking substantial delays whilst the acquisition processes were completed.
Challenge two – properties not required for a local work
[84] On the applicants’ approach giving primacy to the necessary pre-conditions for compulsory acquisition under the PWA, the second ground of challenge was that the Council had to establish the acquisition was for a local work. Arguably, the vague and indeterminate descriptions of what the Council intends for the properties means that the Council could not meet that requirement. Alternatively, if the Council was empowered separately under the LGA to acquire, then it could not establish that it required the properties for “urban renewal”.
[85] On the applicants’ first argument on this challenge, the Council would need to demonstrate how its intended use of the properties would satisfy the PWA definition of local work, arguably requiring the Council to identify the work it intended to carry out on the properties at the time of issuing the notices.
[86] The kernel of the applicant’s concern on this challenge was that the Council should not be able to prevent an owner’s lawful development of their property (here the apartment development for which resource consent had been granted) because of a perception, as at June 2017, that such a development would be inconsistent with and frustrate the development of Council-sponsored alternative uses in the neighbourhood. Arguably, the evolving concepts for the promenade project remained inchoate or aspirational in June 2017 to an extent that meant the Council could not commit to it as either a local work, or alternatively as a committed form of urban renewal.
[87] A requirement that the taking had to be for a local work would only apply if I had upheld the applicants’ interpretation of the LGA as not containing stand-alone powers of compulsory acquisition. Given the interpretation that the LGA cross-refers to the provisions of the PWA for the mechanics of the processes involved, the requirement that the properties had to be taken for a local work cannot apply.
[88] I am satisfied that the properties are being acquired for an aspect of urban renewal. From the plans, iterations of which have been in existence since June 2017, the part of Daly Street containing the properties is critical to their integrated development with other properties comprising a larger promenade project. The overall objective could not be achieved without development of the properties consistently
with the larger plan. The Council brings itself readily within the requirements under the LGA for the properties to be required for matters of urban renewal.
[89] As noted at [83] above, the statutory scheme would be frustrated if compulsory acquisition could only occur once finite and detailed plans were in place.
[90] Accordingly, on challenge two, I do not accept that the Council was obliged to make out that the properties were required for local work, and the Council can readily establish that the properties are required for urban renewal. Accordingly, challenge two cannot be made out.
Challenge three – the Council has not demonstrated financial responsibility or control over proposed works
[91] The applicants contended that the Council could only compulsorily acquire the properties if it brought itself within the requirement to have financial responsibility for the local work under s 16(2) of the PWA, and that it would have control over the construction of the work which is an element of the definition of a local work in s 2 of the PWA.
[92] Mr Slyfield advanced criticisms that the point reached by the Council when the notices were served left open whether the Council itself would have financial responsibility for redevelopment of the properties. The options included co-ordinating development of the sites by private property owners. It followed that the proposed works were not ones over which the Council could demonstrate it had control at the time it made the decision to invoke the powers of compulsory acquisition.
[93] The Council responded on the merits, against the contingency that it did have to meet the stricter requirements for exercising the power under s 16 of the PWA.
[94] As I have found those provisions do not apply, it is unnecessary to make findings in respect of the criticisms.
Challenge four - potential re-sale beyond the purposes for acquisition, or an improper purpose for acquisition
[95] Council documents in evidence expressed views that the Council did not have sufficient funding or the expertise to develop the properties itself, so that options included co-operative development by private owners or lessees. In that event, the Council’s planning objectives would be secured by covenanting the properties prior to any sale. Mr Slyfield argued that acquisition in those circumstances is not authorised because the text of the PWA and its purpose envisages acquisitions of land for works to be constructed by the acquiring authority. The options in contemplation by the Council at the time of the notices included on-sale to other owners on terms that would enable the Council to control the nature of construction so as to ensure that it was complementary with other parts of the integrated development of the promenade project. Mr Slyfield argued that acquisition for the purpose of re-sale was an improper purpose.
[96] The Council disputed that the applicants can make out the factual premises on which these arguments depend. Mr Bisley submitted that references to on-selling were only included in documents that contemplated negotiated private treaty purchases, rather than compulsory acquisition. The Council is committed to acting in all respects within the law, and none of the steps taken thus far raise the spectre of its using the compulsory acquisition power for an improper purpose, or in any way ultra vires.
[97] Arguably, the Council may impose conditions on development by others, but it will be concerned to ensure it stays within the permitted purposes. As Mr Bisley acknowledged, any proposed sale may trigger the offer-back provisions in s 40 of the PWA. In practical terms, the Council’s awareness of that contingency will help keep it within the lawful scope of the uses of the properties where they have been compulsorily acquired.
[98] Essentially for the reasons advanced by Mr Bisley, I do not accept that the conduct of the Council thus far raises grounds for challenging the lawfulness of the exercise of the statutory power to compulsorily acquire the properties.
Summary
[99] As a matter of statutory interpretation, I find that the powers of compulsory acquisition in the LGA are stand-alone powers, subject to the obligation of a local authority exercising them to do so in accordance with the processes prescribed in the PWA. That finding limits the scope of the applicants’ challenge.
[100] On the first ground of challenge, I accept that it is not valid for the Council to contend that the applicants ought to have treated the description in the notices as supplemented by publicly available information about the Council’s plans for the area including the properties. A sufficient description had to be contained in the notices, with the Council thereafter being held to that description.
[101] However, I accept that the extent of detail constituted a general description of the purpose for which the properties were being acquired. There was therefore no actionable error of process.
[102]I have held that none of the other grounds of challenge can be sustained.
[103]Accordingly, the application for judicial review is declined.
Costs
[104]The Council is entitled to costs on a 2B scale. I certify for second counsel.
[105] As to quantum, my provisional view is that the absence of any reference in the notices to the exercise of powers under the LGA, and the terms of the Council’s dealings with the applicants until it filed a statement of defence in the proceeding, provided tenable grounds for the applicants to pursue the grounds of challenge they did, focusing on the more restrictive form of powers in the PWA. In addition, argument on the adequacy of the general description of the work was to an extent diverted by the Council’s proposition that the content of the notices could reasonably be supplemented by publicly available information. Those matters affected the scope of reasonable arguments advanced and arguably justify a deduction from a full award
of costs in a range of 20 per cent. If counsel are unable to agree in light of this indication, I will receive memoranda, limited in both cases to no more than five pages.
Dobson J
Solicitors:
J H J Crawford Law Office, Wellington for applicants Buddle Findlay, Wellington for respondent
Annexure A
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