Dilworth Trust Board v Attorney-General
[2021] NZCA 48
•8 March 2021 at 11.30 am
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| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA740/2017 [2021] NZCA 48 |
| BETWEEN | DILWORTH TRUST BOARD |
| AND | ATTORNEY-GENERAL |
| Hearing: | 9 September 2020 |
Court: | Miller, Gilbert and Courtney JJ |
Counsel: | W L Aldred and J B Orpin-Dowell for Appellant |
Judgment: | 8 March 2021 at 11.30 am |
JUDGMENT OF THE COURT
AThe appeal is allowed.
BThe orders made in the High Court are set aside. They will be substituted with orders to the effect that:
(a)the second respondent must offer the subject lands for sale to the appellant, subject to the third order below, in terms of s 40(2) of the Public Works Act 1981 and subject to s 40(2A);
(b)the date for the purposes of assessing current market value under s 40(2)(c) will be 16 October 2013 (being 12 months from the date upon which the land was no longer required for the purposes of the public work for which it is held); and
(c)the offer back is subject to the appellant entering into an arrangement with the Crown of the sort entered into with the owners of the Robertson, Westfield and 5 Mahuru Street lands, as described in the High Court’s sealed judgment of 4 December 2017 (that is, the appellant as grantor granting to the Crown or third respondent as grantee/incumbrancee the limited interests shown in SO 460481 and SO 460478 for the purposes of ensuring the third respondent’s continued ability to access, inspect and maintain the Viaduct).
CCounsel may confer as to the precise wording of the orders and file a joint memorandum within 10 working days.
D The appellant is entitled to costs for a standard appeal on a band A basis, with certification for second counsel and usual disbursements.
____________________________________________________________________
REASONS OF THE COURT
(Given by Courtney J)
Table of Contents
| Para No. | |
| Introduction | [1] |
| Background | [10] |
| The High Court decision | |
| Section 40(1)(a): is the Dilworth land still required for the Viaduct? | [18] |
| Section 40(1)(b) and (c) and 40(2): is the Dilworth land required for another public purpose or for an exchange? | [21] |
| Relief granted | [23] |
| Statutory scheme | [24] |
| Issue 1: did the Judge err in allowing the Chief Executive time to consider whether the land was required under either ss 40(1)(b) or (c) or whether any of the exemptions under s 40(2) applied? | |
| Allowing the Crown further time to consider whether ss 40(1)(b) or (c) applied | [32] |
| The Crown raises a new argument regarding the application of s 40(1)(b) | [51] |
| Allowing the Crown further time to consider the application of s 40(2) | [66] |
| Issue 2: should the High Court have determined the application of ss 40(1)(b) and (c) and 40(2) itself? | [73] |
| Issue 3: relief | [75] |
| Result | [83] |
Introduction
Under s 40 of the Public Works Act 1981, if land compulsorily acquired for a particular purpose is no longer required for that purpose the former owners are entitled to have it offered back subject only to the provisions of ss 40(1)(b) (the land is required for another public purpose) and (c) (the land is required for an exchange under s 105) and the exemptions under s 40(2). The landholding agency and the Chief Executive of Land Information New Zealand (LINZ) must decide timeously whether ss 40(1)(b) or (c) apply.[1] The Chief Executive must then decide whether s 40(2) applies. The question in this appeal is: if a landholding agency wrongly decides that land is still required for the original purpose, is the opportunity to consider whether ss 40(1)(b) and (c) or 40(2) apply lost or should further time be allowed for consideration?
[1]McLennan v Attorney-General [2003] UKPC 25, [2003] All ER (D) 287 at [44] and [46].
The Dilworth Trust Board (Dilworth) owns a substantial amount of land in Auckland. It relies on the income from its landholding to sustain its charitable purposes, principally the school for disadvantaged boys established under the Dilworth Trust Deed in 1894. During the 1960s and 1970s the New Zealand Transport Agency (NZTA), formerly Transit New Zealand, compulsorily acquired several parcels of land from Dilworth for the construction of the Newmarket Viaduct (the Viaduct), a roadway erected above ground and supported by piers. In the 1980s, some of the land was offered back. The land that was retained by NZTA is the subject of these proceedings. For our purposes it can be treated as two parcels. One was referred to as the Remaining First and Second Lands and the other the Remaining Third Lands.
During the mid-2000s the Viaduct was replaced, using a slightly different footprint. The subject land runs along and beneath the new Viaduct. Access to and over the land will be needed in the future for monitoring, maintenance and repair of the new Viaduct. Nevertheless, Dilworth wished to reacquire the land. It accepted that any offer back would need to be on terms involving encumbrances that preserve NZTA’s access to and use of the land in the future. When approached with this proposal NZTA maintained that the land was still required for the purpose of the Viaduct and declined to offer it back.
Dilworth brought proceedings in the High Court seeking a declaration that NZTA was obliged to offer the land back. Ellis J held that, contrary to NZTA’s view, the lands were no longer required for the original public work.[2] That position was reached by 16 October 2012 when the replacement Viaduct was completed. However, she allowed the Crown more time to consider whether the land would be required for another public work (s 40(1)(b)) or for an exchange (s 40(1)(c)), or whether any of the s 40(2) exemptions applied.[3] A further judgment containing declarations to this effect was issued and sealed.[4]
[2]Dilworth Trust Board v Attorney-General [2017] NZHC 2987 [High Court decision] at [155].
[3]At [161]–[164].
[4]Dilworth Trust Board v Attorney-General HC Wellington CIV-20115-485-350, 4 December 2017 [Sealed judgment].
Dilworth filed an appeal against the High Court decision. Pending the hearing of the appeal the Chief Executive undertook her consideration of the questions allowed for in the sealed judgment, namely whether the subject land was required to be offered back in terms of s 40(1)(b) or (c) or s 40(2). She determined that:
(a)the Remaining First and Second Lands are required to be offered back to Dilworth (on the terms set out at [6] of the High Court’s sealed judgment); and
(b)the Remaining Third Lands are not required to be offered back to Dilworth as they are required for another public work in terms of s 40(1)(b). That work is a bus layover for Auckland Transport.
It will be seen that:
(a)The appeal is now confined to the Remaining Third Lands.
(b)The Chief Executive invoked the need for a bus layover for the first time in this Court. It was not pleaded below.
(c)The need for the bus layover was invoked long after the date on which the Judge found NZTA itself ceased to require the land.
NZTA did not appear in this Court. It now accepts that its need for access could be met by encumbrances and it did not need to own the land.
Given the possibility of the Remaining Third Lands being required to be offered back (depending on the outcome of the appeal) the parties sought and were granted an interim order prohibiting the transfer, surrender or disposal of the Remaining Third Lands pending further order of this Court.[5]
[5]Dilworth Trust Board v Attorney-General CA740/2017, 2 March 2020 (Minute of Brown J).
The issues arising in the appeal are:
(a)Was the High Court wrong to allow the Crown the opportunity to consider whether the Remaining Third Lands were required for any other public work or for an exchange or whether any of the exceptions under s 40(2) applied?
(b)Should the High Court have determined the issues arising under ss 40(1)(b) and (c) and 40(2) itself?
(c)Should the Crown be permitted to invoke the bus layover as an alternative public work at this late stage of proceedings?
(d)Should this Court exercise its discretion to grant the declaratory relief sought?
Background
The new Viaduct required a change to the designation of the land in the Auckland District Plan, which was granted on conditions. One of the conditions was that the Viaduct’s Project Management Plan would include an urban design plan showing the overall urban design concept and provide a framework for the design intent, layout and urban design measures to be determined in consultation with Auckland Council (the Council) and iwi by way of a joint working party. Work on the urban design plan (referred to as the Master Plan) began in 2010.
The new Viaduct also required further land to be acquired. Although Dilworth land was not affected by this, the outcome of negotiations with some of the affected owners is relevant to Dilworth’s position. These agreements were referred to as the Westfield, Robertson and 5 Mahuru St agreements. The basis of the agreements was that the Crown would not acquire the freehold title but only the land on which the piers were to be constructed, together with air rights. Leases were taken for the balance of the lands during the construction period and encumbrances obtained to ensure ongoing access for monitoring and maintenance purposes. These agreements enabled the owners of the properties to continue their plans for the land including, in the case of Westfield, the construction of a substantial shopping centre.
While work on the new Viaduct was underway, the Crown began to consider whether and to what extent the land it held, including the Dilworth land, would still be required once the viaduct work was completed. At about the same time, Dilworth began to turn its mind to the possibility of re-acquiring the land still held by the Crown. This interest was prompted by the pending expiry of leases over adjacent land still owned by Dilworth. The development potential of the latter would be significantly greater if Dilworth could amalgamate it with the land still held by the Crown. NZTA indicated that it was still considering the requirements for land in the vicinity of the Viaduct and would keep Dilworth informed.
NZTA undertook extensive investigation into the future needs and uses of the land it held in the viaduct area. The decision whether the land should be retained was taken by NZTA’s State Highway Management Team for the Auckland Region (SHMT) and Highways and Network Operations Value Assurance Committee (VAC). Their decisions were based on recommendations by a NZTA project manager, Jacqueline Bell, and an independent consultant, Ritchie Scofield (made with the benefit of advice from Opus International Consultants Ltd). They provided a Land Retention and Disposal Strategy and the Master Plan. In October 2011 SHMT adopted both as a base for consultation. In early November 2011 VAC did the same.
In a paper prepared by Ms Bell and Mr Scofield, several reasons were identified for retention of the subject land. They included the ongoing need for access to the piers and the area along and beneath the Viaduct for monitoring, maintenance, repair. Access routes were needed for emergency access. Easement corridors were needed for utilities and services. Provision had to be made for future upgrades or replacement. The paper recognised the offer back obligation under s 40 but concluded that retention of the land was necessary under s 40(1)(a).
As a result of Council rezoning of the area and the urban design outcomes sought by the Council, many of the uses to which the land around the Viaduct had been put previously would no longer be feasible. The paper noted that, although the District Plan did not actually require NZTA to develop the land under the Viaduct, NZTA had made a commitment to the Council to provide opportunities for more progressive land use. However, successful development of the land would require a lease period of 99 years to make it attractive to a developer and that would be dependent on consolidation of several blocks of land, which was unlikely to occur if the land were reacquired by the former owners.
Subsequent discussions between NZTA and Dilworth resulted in NZTA proposing a 99-year lease on terms that would preserve NZTA’s right to access the property for maintenance and in an emergency. A draft lease was provided to Dilworth in June 2013. Soon afterwards Dilworth became aware of the 5 Mahuru St agreement. In early 2014 Dilworth enquired about an offer back with a similar memorandum of encumbrance and easements. NZTA maintained its position that no offer back would be made because the Dilworth land was still required.
It was around this time that Dilworth first instructed its solicitors to take formal steps in relation to its offer back rights under s 40. Proceedings were issued in May 2015.
The High Court decision
Section 40(1)(a): is the Dilworth land still required for the Viaduct?
The central issue identified by Ellis J was whether, for the purposes of s 40(1)(a), the Dilworth land was still required for the public work for which it had been taken.[6] The Judge followed the settled approach to that question, which requires an objective assessment of intention by the court.[7] This meant that NZTA’s view about whether the land was still required was not determinative and could be displaced by the Court’s own assessment of the relevant facts.[8]
[6]High Court decision, above n 2, at [135].
[7]At [139], citing Attorney-General v Hull [2000] 3 NZLR 63 (CA) and Attorney-General v Horton [1999] 2 NZLR 257 (PC).
[8]At [140].
The Judge considered that the unusual factual situation meant that the question of ongoing requirement for the land was more nuanced than is usually the case. This was because Dilworth acknowledged that the Crown would continue to require use of the land to the extent of the piers and ongoing access to the land and the air space below the Viaduct for maintenance and possible replacement purposes.[9] Nevertheless, the Judge accepted Dilworth’s position that the offer back obligation under s 40(1)(a) could be triggered in circumstances where some level of use and access would still be required, and that need could be met through appropriate encumbrances.[10]
[9]At [141].
[10]At [142]–[144], citing Attorney-General v Edmonds CA97/05, 28 June 2006 at [157].
The Judge held that this was such a case and that the land was not, in fact, still required. Her Honour found that this had been the position as at 16 October 2012 so that s 40(1)(a) was satisfied then.[11] The Judge identified a number of factors as supporting this conclusion. They included the fact that (as evidenced by the Westfield, Robertson and 5 Mahuru St agreements) ownership of the freehold was not necessary for the construction and ongoing maintenance of the Viaduct.[12] This finding is not challenged.
Sections 40(1)(b) and (c)and 40(2): is the Dilworth land required for another public purpose or for an exchange?
[11]Sealed judgment, above n 4, at [1].
[12]High Court decision, above n 2, at [153]–[155].
Dilworth argued that the time had passed for the Crown to consider whether the land was required for another purpose so as to invoke ss 40(1)(b) and (c) or s 40(2). It relied on statements by this Court in Attorney-General v Morrison and by the High Court in Edmonds v Attorney-General to the effect that it was not open to the Crown to delay making a decision as to whether land held was needed for another public work.[13] However, the Judge did not consider that these decisions had the effect contended for:
[160] … Here, on the basis that NZTA’s view about ongoing need was arrived at in good faith (and there has been no pleading or other suggestion that it was not), it cannot fairly be said that the respondents should previously have considered s 40(1)(b).
[161] That said, however, it may be that NZTA’s continued and periodic need to access the lands for Viaduct purposes, and the restrictions that will inevitably be placed on any development on the lands, means that an alternative public works use is unlikely. But I am not prepared to hold that the time has already passed for consideration of that issue. Rather, that consideration should now promptly take place.
[162] The same reasoning [necessarily] applies to s 40(1)(c). The Crown has not yet had the opportunity to consider any potential exchange and should be permitted to do so.
[13]At [157]–[158], citing Attorney-General v Morrison [2002] 3 NZLR 373 (CA) at [20] and Edmonds v Attorney-General HC Wellington CIV-2000-485-695, 3 May 2005 at [148].
The Judge also considered that it was not too late for the Crown to consider whether any of the exemptions under s 40(2) applied, though she observed that the material before the Court suggested it was unlikely that grounds existed for invoking them.[14]
Relief granted
[14]At [163]–[164].
The Judge indicated that declarations should be made to the effect (relevantly) that “the Crown is therefore now required to consider whether offer back is not required by virtue of s 40(1)(b) and (c) and s 40(2)”.[15] Counsel were invited to confer as to the precise terms of the declaration. As ultimately sealed, the judgment was that:[16]
[15]At [165(b)].
[16]Sealed judgment, above n 4.
1.Subject to [6] below, since the completion of the replacement Newmarket Viaduct on 16 October 2012, the Subject Lands (as pleaded in the second amended statement of claim) held for the purposes of the Newmarket Viaduct and/or the Auckland – Hamilton Motorway have not been required for that purpose in terms of s 40(1)(a) of the Public Works Act 1981 (PWA).
2.The [Chief Executive of LINZ] is now promptly required to take reasonable and expeditious steps to determine:
2.1Whether the land is required for any other public work in terms of s 40(1)(b) of the PWA; or
2.2Whether the land is required for any exchange under s 105 of the PWA in terms of s 40(1)(c) of the PWA; and
3.If, after reasonable inquiries, the land is not required in terms of s 40(1)(b) or (c), the [Chief Executive of LINZ] must give bona fide and fair consideration to whether it would be impracticable, unreasonable, or unfair to sell the land by private contract to [Dilworth] under s 40(2)(a) of the PWA, or there has been a significant change in the character of the land for the purposes of, or in connection with, the public work for which it was acquired or is held (namely the Auckland – Hamilton Motorway and/or Newmarket Viaduct) under s 40(2)(b); and
4.If neither s 40(2)(a) or (b) apply to the land, following a reasonable time to ready the land for sale, the [Chief Executive of LINZ] must offer the land for sale to [Dilworth] in terms of s 40(2) of the PWA, subject to s 40(2A).
5.If the land is to be offered back to [Dilworth] under s 40(2) of the PWA the date for the purpose of assessing current market value under s 40(2)(c) will be 16 October 2013 (being 12 months from the date upon which the land was no longer required for the purposes of the public work for which it is held).
6.Any offer back made to [Dilworth] pursuant to s 40(2) of the PWA would be subject to [Dilworth] entering into an arrangement with the Crown of the sort entered into with the owners of the Robertson, Westfield and 5 Mahuru Street lands, as described in the Court’s judgment of 4 December 2017 (that is, [Dilworth] as grantor granting to the Crown or [NZTA] as grantee/encumbrancee the limited interests shown in SO 460481 and SO 460478 for the purposes of ensuring the [NZTA’s] continued ability to access, inspect and maintain the Viaduct).
Statutory scheme
The basis on which land compulsorily taken may be reacquired by former owners has varied over time. The first statutory provision relating to the sale of surplus public works land was s 29 of the Public Works Act 1876. Under that provision land that was no longer required for the public work for which it was taken could be sold by first offering it to the person then entitled to the land from which it had originally been severed. If not accepted, it could be sold to the owner of adjacent lands. That provision remained substantially the same through subsequent enactments of the Public Works Acts of 1882, 1894, 1905, 1908 and 1928.
In 1935 the mandatory nature of the offer back provision in s 35 of the Public Works Act 1928 was changed. Instead, an agency holding surplus land could choose to sell it (either privately to the owner of adjacent lands or by public auction or tender) or it could choose to retain the land. The preference for retention (land banking) by local authorities and government departments became widespread. It was seen to result in injustice and ultimately a mandatory offer-back scheme was reintroduced. The new scheme reflected a “strong legislative policy to preserve the rights of an owner subject only to the continuing needs of the State”.[17]
[17]Attorney-General v Horton, above n 7, at 261.
The current provision, s 40 of the Public Works Act 1981, relevantly provides:[18]
[18]This version of s 40 was enacted in 1987. The differences from the previous version are not significant for the purposes of this appeal.
40 Disposal to former owner of land not required for public work
(1) Where any land held under this or any other Act or in any other manner for any public work—
(a) is no longer required for that public work; and
(b) is not required for any other public work; and
(c) is not required for any exchange under section 105—
the chief executive of the department within the meaning of section 2 of the Survey Act 1986 or local authority, as the case may be, shall endeavour to sell the land in accordance with subsection (2), if that subsection is applicable to that land.
(2) Except as provided in subsection (4), the chief executive of the department within the meaning of section 2 of the Survey Act 1986 or local authority, unless—
(a) he or it considers that it would be impracticable, unreasonable, or unfair to do so; or
(b) there has been a significant change in the character of the land for the purposes of, or in connection with, the public work for which it was acquired or is held—
shall offer to sell the land by private contract to the person from whom it was acquired or to the successor of that person—
(c) at the current market value of the land as determined by a valuation carried out by a registered valuer; or
(d) if the chief executive of the department within the meaning of section 2 of the Survey Act 1986 or local authority considers it reasonable to do so, at any lesser price.
(2A) If the chief executive of the department within the meaning of section 2 of the Survey Act 1986 or local authority and the offeree are unable to agree on a price following an offer made under subsection (2), the parties may agree that the price be determined by the Land Valuation Tribunal.
…
In Deane v Attorney-General, Hammond J described the direct interference with individual property rights consequent on compulsory acquisition as draconian but necessary. Such powers are to be strictly construed, exercised in good faith and even‑handedly.[19]
[19]Deane v Attorney-General [1997] 2 NZLR 180 (HC) at 191.
The remedial purpose of s 40 is clear and has been referred to often. It was described by Smellie J in Rowan v Attorney-General as follows:[20]
On the face of it the plain meaning and intent of the section appears to be remedial, bringing to an end a perceived injustice where land could be compulsorily taken by the Crown for one purpose, and arbitrarily used for another without giving the original owner the opportunity to buy it back.
[20]Rowan v Attorney-General [1997] 2 NZLR 559 (HC) at 568.
In Attorney-General v Edmonds, this Court observed that the underlying policy of s 40 is to increase the protection to the rights of property owners when land is taken.[21] In Aztek Ltd v Attorney-General this Court said:[22]
We conclude that the statutory provisions are designed to ensure that, so far as practicable, the land is offered back to the persons from whom it was taken or their successors on the basis that that is the right thing to do where it has been initially acquired from a private landowner for public interest purposes which have ceased to exist. The statute should be construed and applied in a way which best reflects that objective.
[21]Attorney-General v Edmonds, above n 10, at [60], citing Hood v Attorney-General CA16/04, 2 March 2005 at [18].
[22]Aztek Ltd v Attorney-General [2020] NZCA 249 at [53].
The obligation to offer land back creates an entitlement by former owners to have an offer back made, subject only to the provisions of ss 40(1)(b) and (c) and the exemptions under s 40(2). The imprecise nature of the right was described by the Privy Council in Attorney-General v Horton:[23]
This right has sometimes been described as a right of pre-emption, although Their Lordships thinks it bears a closer resemblance to an option: the purchaser’s right is not dependent upon the vendor choosing to sell but arises as soon as the land is no longer required. Hammond J described it as an inchoate right which an owner of land taken by the Crown preserved throughout the latter’s ownership and which came to fruition when the land was no longer required.
[23]Attorney-General v Horton, above n 7, at 261.
Subsequently, however, this Court considered that it was not helpful to compare the position under s 40 with conventional property law concepts; “[i]t might be better to allow the provisions of s 40 to speak for themselves in their historical and legislative context”.[24]
Issue 1: did the Judge err in allowing the Chief Executive time to consider whether the land was required under either ss 40(1)(b) or (c) or whether any of the exemptions under s 40(2) applied?
Allowing the Crown further time to consider whether ss 40(1)(b) or (c) applied
[24]Attorney-General v Hull, above n 7, at [49].
Dilworth’s argument is, essentially, that the Chief Executive was required to act promptly to consider whether the land was required under ss 40(1)(b) or (c), that the Chief Executive failed to do so and that by the date of trial it was too late to do so, notwithstanding that the Chief Executive’s failure to act earlier was due to the NZTA’s erroneous belief that the land was still required for the purposes of s 40(1)(a). Therefore, the application of s 40(1)(b) and (c) were questions that fell to be determined by the Court on the same basis as it had determined whether s 40(1)(a) was satisfied.
This argument requires some further explanation of how s 40 operates. In Horton v Attorney-General this Court explained:[25]
There are two features of this statutory scheme. The first is that once (a) and (b), and possibly (c), of s 40(1) are satisfied there is no further role for the department or agency responsible for the public work for which the land was held. The responsibility passes to the chief executive of the Lands Department. The second is the mandatory language: the chief executive “shall endeavour to sell the land”; the chief executive “shall offer to sell the land” to the former owner. While the section does not impose express time limits, it requires the chief executive to follow the statutory process and by necessary implication to do so with due expedition. The chief executive is required to endeavour to sell the land in accordance with that subsection: unless the exceptions apply, the chief executive is required to offer to sell the land to the former owner. There is no room for reconsideration of the earlier conclusion that the land was not required for a public work. And that legislative approach also reflects the special position of the former owner who was dispossessed under the compulsory acquisition provisions of the Act.
[25]Horton v Attorney-General CA43/97, 3 December 1997 at 17.
In Attorney-General v Hull, the obligation on the Crown was explained in more detail, including the obligation that arises under s 40(2):[26]
[43] Once para (a) of s 40(1) is satisfied, we consider that the landholding agency, the Chief Executive of the Department of Lands or both are obliged to take reasonable steps to ascertain whether the land is or is not required in terms of paras (b) and (c). If, after reasonable inquiry, no such requirement emerges, the Chief Executive must act in respect of the land in accordance with s 40(2).
[44] The Chief Executive must give bona fide and fair consideration to whether the statutory course of offer back would be impracticable, unreasonable or unfair under subs (2) or whether in terms of subs (4) the land is instead to be sold to an adjacent owner. Unless one of those exceptions applies, the Chief Executive must offer the land back to the original owner.
[45] Individual cases may present particular difficulties but the foregoing approach should be of assistance in resolving the usual issues which arise under s 40. Our comment is of course limited to land held by central government or its agencies. The process relating to land held by local authorities would differ in detail.
[26]Attorney-General v Hull, above n 7. See also Attorney-General v Morrison, above n 13, at [21]–[22].
In Attorney-General v Morrison the Court reiterated that after s 40(1)(a) is satisfied, the next step is for the Chief Executive to take both reasonable and expeditious steps to ascertain whether the land is required under s 40(1)(b) or (c). It cautioned that the Chief Executive could not delay this step indefinitely for the ostensible purpose of ascertaining whether another agency might require the land; that would defeat the purpose of s 40.[27] The Court in Attorney-General v Edmonds made the same point: bearing in mind the underlying policy of legislation to increase protection to the rights of property owners, the effect of s 40 is to impose a duty on the Crown to offer back timeously when land is no longer required.[28] Overall, the authorities clearly and consistently indicate that the s 40 process, including assessment of alternatives, must take place within a reasonable time after the agency ceases to need the land.
[27]Attorney-General v Morrison, above n 13, at [20].
[28]Attorney-General v Edmonds, above n 10, at [60].
Whether land is no longer required for the original purpose under s 40(1)(a) is a question of fact rather than one determined by the opinion of the landholding agency.[29] The court may therefore determine the intention of the landholding agency in the light of objective circumstances.[30] The finding may be made by reference to a decision by the landholding agency but may also depend on inference from the conduct of the landholding agency or expert evidence.[31]
[29]Attorney-General v Hull, above n 7, at [41].
[30]Attorney-General v Morrison, above n 13, at [17].
[31]At [17]. See also Attorney-General v Horton, above n 7, at 262.
Self-evidently, it is possible that a decision by the landholding agency regarding the ongoing requirement for land will be shown to be wrong in later litigation. Dilworth’s argument is that this outcome does not affect the obligation on the Chief Executive to act timeously; once land is, objectively, no longer required under s 40(1)(a) the duty to sell arises, subject only to ss 40(1)(b) and (c) and 40(2). If the Crown fails to consider ss 40(1)(b) and (c), even if through misapprehension as to the correct position, it cannot invoke them later.
Dilworth relies on statements made by Miller J in Edmonds v Attorney‑General.[32] That case concerned land in central Wellington compulsorily acquired in 1942 for defence purposes and held for more than 40 years. In 1988 the Ministry of Works contacted the son of the former owner regarding the possibility of the land being offered back. However, the matter was not resolved. The family eventually commenced proceedings. They asserted that the land was not required for a public work when s 40 came into force in 1982 and should therefore have been offered back at that time. They alleged breach of statutory duty, seeking damages, and applied for judicial review, seeking a declaration that the Crown was obliged to offer the land back at the market value as at the date it should have been offered back. The Crown accepted that one of three areas was no longer required but contended that it did not become surplus until 1989 (this date was significant because land prices in Wellington had risen steeply between 1981 and 1989). It maintained that the two other areas were required for other public works (s 40(1)(b)) or that it was not reasonable or practicable to require the Crown to offer the land back (s 40(2)(a)). Those positions were, however, raised for the first time in the litigation.
[32]Edmonds v Attorney-General, above n 13; approved on appeal: Attorney-General v Edmonds, above n 10.
In relation to s 40(1)(b) Miller J commented that, on the basis of Hull and Morrison, the Chief Executive was under a duty to take reasonable and expeditious steps to ascertain whether the land is required for any other public work[33] and that: [34]
Presumably such alternative requirement must exist at the time the land was no longer required for the original work, since the section does not permit a lacuna: if the land is not required for a qualifying public work at any time, the former owner’s rights vest subject only to those grounds of defeasibility stated in the statute …
[33]At [144].
[34]At [145], citing Attorney-General v Horton, above n 7.
Miller J then commented on the consequences of the Chief Executive not having considered these questions prior to the litigation commencing:
[148] It would seem to follow from Hull and Morrison that when the landholding agency invokes s 40(1)(b) or s 40(2)(a) in litigation, the first question for the Court is whether it considered the relevant subsection at the time it decided the land was no longer required for the designated work, and reached a decision within a reasonable time. If the agency did not invoke the relevant subsection to justify a decision to retain the land at the time, it is difficult to see why the Court ought to reach a decision on its behalf, in litigation brought after any reasonable time needed to reach a decision has long passed.
This Court agreed with the Judge’s approach in the subsequent appeal,[35] although Miller J’s comments were obiter given that a decision had been made regarding s 40(1)(b) and the Court was concerned with the review of that decision. However, the approach was specifically approved in Williams v Auckland Council, where the local authority had made a belated decision not to offer back in reliance on s 40(2):[36]
[60] We agree with Miller J’s view which was, as he noted, supported by this Court’s decision in Hull. His construction not only conforms to the plain wording of s 40 but it is … consistent with the policy underlying that provision. Allowing the Council to rely on circumstances which have arisen in the 13 years between the Board’s failure to address s 40(2)(c) in a timely way and the Council’s resolution would undermine its remedial purpose and enable the Council to benefit from its predecessor’s default.
[35]Attorney-General v Edmonds, above n 10, at [113].
[36]Williams v Auckland Council [2015] NZCA 479 , (2015) 7 NZConvC 96-013 (footnote omitted).
Ellis J distinguished Edmonds on the basis that the Crown had accepted that the land was not required under s 40(1)(a) but only raised the issue of s 40(1)(b) in the context of the litigation. In this case, however, the Crown had gone to trial on the basis that the land was still required for the original purpose and that the time had not yet arisen for it to consider ss 40(1)(b) and (c) and s 40(2). The Judge considered that that in the circumstances of this case the “first question” identified by Miller J, whether the landholding agency had considered the relevant subsection at the time it decided the land was no longer needed for the designated work, had not yet arisen.[37]
[37]High Court decision, above n 2, at [159]–[160].
Ellis J was influenced by the fact that NZTA’s decision under s 40(1)(a) had been made in good faith, concluding “it cannot fairly be said that the respondents should previously have considered s 40(1)(b)”.[38] Another way of putting this conclusion is that, in the circumstances of this case, the duty on the Chief Executive to consider the other provisions did not arise until the Court determined that the land was not required under ss 40(1)(a). This leads to the question whether the duty to consider ss 40(1) (b) and (c) and s 40(2) arises even where Chief Executive’s failure to act promptly was the result of NZTA’s error or, to put it another way, who should bear the consequences of NZTA’s error?
[38]At [160].
For the Crown, Ms Cheng argued that requiring the Court to resolve ss 40(1)(b) and (c) in 2012, notwithstanding that NZTA had decided that the land was still required under s 40(1)(a), would make ss 40(1)(b) and (c) and s 40(2) either unworkable or redundant. On one view it would require the Chief Executive to consider the application of those provisions against the background of the landholding agency having made a positive determination that the land continued to be required. This would, in turn, require other agencies to assess their requirements for land that might or might not become available. The alternative would be that the Chief Executive would be prevented from considering ss 40(1)(b) and (c) and s 40(2) altogether. That would be inconsistent with the statutory scheme, which expressly contemplates that the Chief Executive will consider the prerequisites in ss 40(1)(b) and (c) and the application of s 40(2).
We agree that neither of these outcomes are desirable. However, as the Privy Council noted in Attorney-General v Horton, the s 40 scheme “has some curious features”.[39] For example, a former owner may not discover that his or her option to reacquire has been triggered at all, and therefore miss the opportunity to exercise it. The features Ms Cheng has identified are similarly inherent to the scheme.
[39]Attorney-General v Horton, above n 7, at 261.
Under s 40 the Chief Executive has the responsibility for considering whether the land is required for another public work or for an exchange and is entitled to a reasonable opportunity to do so. However, the s 40(1)(a) assessment is a question of objective fact — honest error is not the test.[40] Moreover, given the purpose of s 40 and the consistent emphasis by the courts on the right of former owners to prompt recognition of their entitlement, we are satisfied that the Crown must bear the consequences of NZTA’s error. We add that on the facts of this case there was no reason to think it was impracticable to make the s 40 assessment in 2012. Mr Scofield’s early recommendations to NZTA appeared to show a conscious effort to avoid triggering a s 40 process in relation to the Viaduct. To make this point is not to reject the Judge’s characterisation of NZTA’s conduct as honest error. It is to say that the facts do not bear out the argument that the legislation is unworkable.
[40]Attorney-General v Hull, above n 7, at [41].
As already discussed, the mischief to which s 40 is directed is the unfair practice of land banking at the expense of the former owners. As this case shows, a landholding agency can make an honest error about the ongoing need for the land. But the wrongful retention of land that follows an honest error has the same effect on former landowners as deliberate land banking. The former owners are still deprived of the right expressly conferred by s 40 to have land offered back promptly once it is no longer needed for the purpose for which it was taken, subject only to s 40(1)(b) and (c) and 40(2).
Although the right of former owners to an offer back is subject to the state’s interests as provided for in ss 40(1)(b) and (c), any delay in the Crown investigating and asserting its continued need for the land will be to the detriment of the former owners. It is for this reason that previous decisions have repeatedly emphasised the need for the Crown to act promptly. Prejudice to former owners as a result of unwarranted delay is particularly acute in these times of rapidly rising land values and rent. Conversely, prejudice to the Crown from not being able to consider other possible uses for the land is less; it may still begin a fresh compulsory acquisition process so that genuine need does not go unsatisfied. We therefore see no reason to treat a deliberate decision to land bank differently from an honest error that has the same effect. We consider that the Judge was wrong to allow the Crown further time for consideration of ss 40(1)(b) and (c).
For completeness, we note that the Judge’s approach would have unsatisfactory implications for the former owner as litigant. Ms Aldred, for Dilworth, submitted that the Judge’s conclusion led to the issues raised on the pleadings not being addressed; instead NZTA was allowed to litigate “by instalment”. If Dilworth was dissatisfied with the outcome of the further inquiries under ss 40(1)(b) and (c) it would be forced to commence fresh proceedings.[41] Yet another round of litigation could result if, having concluded that the land was needed for another public work under ss 40(1)(b) or (c), NZTA therefore did not consider s 40(2) but was later proved wrong in that regard as well. Ms Aldred submitted that this approach made it impossible for a litigant in Dilworth’s situation to properly assess the merits of the proceeding at the outset.
[41]Ms Aldred also submitted that Dilworth could seek a resumption of the previous trial but we are satisfied that this would not be possible; the judgment given in the High Court has been sealed and that Court is now functus officio.
We add that even if the Crown were entitled to more time to consider ss 40(1)(b) and (c), it was on notice as soon as proceedings were issued that NZTA’s need for the land was under challenge. It was fully aware of Dilworth’s argument that if its challenge was successful, it would seek an order that the land be offered back and would oppose the Crown having further time to consider its requirements. Some two years elapsed before the matter came to trial. The Crown had ample time to investigate whether the land was needed for other purposes. On the Judge’s approach, however, the Crown would be allowed even more time. This was not the kind of situation described by Ms Cheng that would put the Crown in an impossible position of having to second-guess the needs of other agencies against the unknown and unlikely possibility of a court finding the land holding agency to have been wrong in its s 40(1)(a) assessment. The Crown already had a reasonable opportunity to consider the alternatives and to provide the Court with that information.
The Crown raises a new argument regarding the application of s 40(1)(b)
The Crown did not file a notice of intention to support the judgment on other grounds. However, in written submissions filed about three weeks prior to the hearing of the appeal, it advanced a new argument, namely that even if the Judge was wrong to allow the Crown further time to consider whether the land was still required for some other public work under s 40(1)(b), there was sufficient evidence to have found that that the land was, in fact, required for another public purpose; a bus layover on the Remaining Third Lands. Therefore, the offer back obligation was not triggered.
Dilworth opposed this new argument being considered on the basis that the issue of the land being required for another public work of any kind, including a bus layover, was never raised in the High Court. It sought leave to advance supplementary submissions at the hearing, which we allowed.
Ms Aldred submitted that the new argument is inconsistent with the Crown’s pleaded position at trial. In its second amended statement of claim, Dilworth pleaded that as at October 2012 the Crown came under an obligation to offer the land back. The basis for that obligation was said to be the fact that the land was no longer required for the public work for which it had been acquired, that it was not required for an exchange under s 105 and that none of the circumstances provided for in s 40(2) applied. There was no reference to whether the land might be required for another public work under s 40(1)(b). In its amended statement of defence, however, the Crown pleaded that if the Dilworth lands were no longer required for the original public work they “may be required for another public work in terms of s 40(1)(b)”.
Dilworth sought further particulars. The Crown responded that:
The first and second defendants have pleaded that the Subject Land is required for the public work for which it is held. Therefore no consideration has been given at this stage to whether all or any of the Subject Land is required for another public work. If the Court holds that all or part of the Subject Land is not required for the public work for which it is held, then the chief executive is under a statutory duty to ascertain whether it may be required for another public work or other public works or for an exchange under s 105 or whether to offer to an adjoining owner, but this cannot be known until the nature and extent of the surplus land is determined.
Prior to trial, Dilworth sought confirmation from the Crown as to whether s 40(1)(b) would be an issue. The Crown explicitly disclaimed the suggestion. In its opening submissions at trial, the Crown made it clear that no consideration had actually been given to the use of the land for purposes other than the Viaduct:
If, contrary to the Crown’s position, the Court determines that the Subject Lands are not required for the public work for which they are held, the questions of whether ss 40(1)(b) and (40(1)(c) are satisfied or s 40(2)(a), 40(2)(b) or 40(4) are engaged should be referred to the Chief Executive of LINZ. The landholding agency, NZTA, considers that the Subject Lands are required for the public purposes for which they [are] held. This means that the process envisaged by s 40, once a landholding agency determines that land is not required under s 40(1)(a) has not yet commenced; and the Chief Executive of LINZ has not had the opportunity to consider the matters addressed in ss 40(1)(b) and (c), 40(2)(a), 40(2)(b) and 40(4).
Nor was the issue specifically addressed in evidence. Although there were some references to the possible use of the land for a bus layover, they were very limited and were not before the Court for the purposes of s 40(1)(b). Ms Cheng relied on the evidence of Ms Bell and Mr Scofield, to whom we have already referred. They described the development of the NZTA’s Newmarket Viaduct Master Plan, one aspect of which was the urban design plan to mitigate the environmental effects of the Viaduct project on the surrounding area. This was a condition of the change in designation to the District Plan required for the replacement of the Viaduct.
Ms Bell noted in her brief of evidence that the land uses proposed in the Master Plan provided for a mix of commercial and office space, active retail frontages, carpark buildings and multi-functional open space. She added:
In addition to this, the Transport Agency project team worked with Auckland Transport to provide a layover area for buses; with Vector Ltd to investigate a location for the Vector Newmarket substations; and the Council to provide for public open space.
All of the possible uses of the land considered in the Master Plan are consistent with the Transport Agency’s requirements for the land for the purposes of the Project. For example, the bus layover created no health and safety risk to the replacement Viaduct as it only involved the storage of buses – they would not be allowed to refuel on the site. …
Later in her brief Ms Bell referred to a workshop she had attended on the Master Plan in November 2011 which was held to bring together the major intersecting landholders, owners of key strategic sites, relevant infrastructure providers and the Council. She noted that following the workshop dialogue continued with some of those parties, including “Auckland Transport over its need for a bus layover area and development of the local road network”.
In examination-in-chief, Ms Bell was asked to clarify the nature of her discussions with Auckland Transport. She said that she was in discussions “through[out] the life of the project” and “was really trying to understand what Auckland Transport’s needs were for their public transport system and in particular their buses in Newmarket.” She did not go so far as to confirm that the Remaining Third Lands were required by Auckland Transport for the purpose of a bus layover.
Ms Cheng submitted that this evidence was not challenged, which might be true in a strict sense, but we place no weight on the point given that the existence of a proposed bus layover was not in fact at issue.
Mr Scofield gave general evidence about the process of identifying and confirming the status of land that might ultimately be identified as surplus. He referred to the minutes of various NZTA meetings which in turn refer to Auckland Transport’s signalled need for a bus layover. However, Mr Scofield simply noted that these meetings took place. His evidence does not explicitly address the question of the bus layover.
Mr Knowles of LINZ was a Crown witness and therefore could have been expected to give evidence on this issue had it been relevant. However, Mr Knowles’ evidence was not before us. Ms Aldred said that he did not address the s 40(1)(b) issue and was not cross-examined on it.
Ms Cheng pointed to various other documents referred to by Ms Bell and Mr Scofield that mention Auckland Transport’s signalled need for a bus layover and the development of the Master Plan to make allowance for this potential. There did not seem to be any document referred to subsequent to 2012. Moreover, references to the bus layover in the identified documents are sporadic and no commitment to this project was ever confirmed.[42] We agree with Ms Aldred that the evidence falls well short of establishing that the land was required for a bus layover.
[42]An “Ouctomes paper” dated 7 November 2011 proposed three potential locations for the bus layover. One of these locations did not include the Remaining Third Lands and another only included a small portion of the Remaining Third Lands. The 2012 Draft Master Plan indicated a bus layover on the Remaining Third Lands but this was a consultation document only.
Nor was the issue raised in the Crown’s closing submissions; the focus was on undermining the Dilworth’s argument that the Crown’s failure to consider the question of other requirements for the land at the time meant that the opportunity to do so was lost. Its submission was that this approach was unworkable, given the practicalities of the way the Crown determines whether land is required for another public work. Although there was reference to Auckland Transport’s potential needs it did not amount to an assertion that land would be required for that purpose:
So for example, in the present case if the land is not required for the purposes of the motorway, parts of it may nevertheless be required for the Vector substation and/or the Auckland Transport bus terminal. Whether these currently proposed uses meet the Public Works Act test that the land is “required” has not been investigated, because NZTA is currently willing to accommodate them.
It is clear that Dilworth proceeded to trial on the basis that the Crown was not asserting that the land is required for another public work. It was entitled to do so. It did not seek discovery on that issue. It did not call evidence on that issue. It did not cross-examine on that issue. We accept that, had the Crown signalled its intention to rely on s 40(1)(b), Dilworth would have done all these things. In the circumstances, it is not open to the Crown to raise the issue by reference to disparate pieces of evidence that were not relied on for that purpose at trial. We therefore decline to consider the new argument.
Allowing the Crown further time to consider the application of s 40(2)
In Attorney-General v Horton the Privy Council held that the obligation to offer land back may be defeated either:[43]
(a)by the Chief Executive or local authority exercising the discretion conferred by s 40(2)(a) because it is considered to be impracticable, unreasonable or unfair to offer the land back; or
(b)if the state of affairs described at s 40(2)(b) exists, namely that there has been a significant change in the character of the land for the purposes of, or in connection with, the public work for which it was acquired or is held.
[43]Attorney-General v Horton, above n 7, at 262.
The two limbs of s 40(2) raise distinct issues. Ms Aldred argued that, insofar as s 40(2)(a) was concerned, the Chief Executive was required to exercise the discretion under s 40(2)(a) within a reasonable period and its failure to do so meant that the power was lost. In Williams v Auckland Council this Court said that:[44]
Consideration of [the] power of exemption must logically precede performance of the default obligation to offer the land back. A local authority intending to exercise its discretion on the statutory grounds must act affirmatively within [a] reasonable period … Otherwise the power to exercise the discretion is lost.
[44]Williams v Auckland Council, above n 36, at [58].
In making those comments the Court expressed its agreement with Miller J in Edmonds in the passage that we have already referred to above at [40]. Ms Cheng responded that Williams, in itself, was insufficient to conclude that there was no basis for remitting the matter to the Chief Executive for further consideration. She distinguished Williams on the basis that it was concerned with a local authority which held all the decision making powers under s 40 as opposed to the present case where the Chief Executive came under a responsibility to consider the factors identified in s 40(2)(a) only once the prerequisites in s 40(1) had been satisfied. It was therefore understandable that remittance back to the Council would be inappropriate in Williams, particularly given the already unreasonable delay on the Council’s part. In this case the Chief Executive did not have the opportunity to consider the s 40(2) matters until after the High Court judgment had been delivered.
Ms Cheng also drew attention to the differences between this case and the decision in Edmonds, emphasising the context in which Miller J’s statement was made. In Edmonds the parties had asked the High Court and the Court of Appeal to address the s 40(2) factors but on the basis that the proper course might well be found to be remittal back to the Chief Executive.[45] This Court expressed some caution about undertaking the task. It had in mind the comments made by the Supreme Court in Hood v Attorney-General where, in declining to grant leave to appeal, the Supreme Court observed that:[46]
[5] The circumstances in which it may be “unreasonable” or “unfair” to offer land back are not circumscribed by the statute. It is open to the Chief Executive of LINZ … to consider the matter broadly and to take into account the expectations of any other body or person affected. Although the Court of Appeal did not consider that the arrangements between the Ministers and the Council were legally enforceable, they were not irrelevant to the assessment to be made. …
…
[7] … [T]he parties appear to have been content to have the application of s 40(2) dealt with by the Courts on application for declarations as to what the chief executive of LINZ should have done. Mr Wilson did indicate in his submissions that the outcome of a successful appeal might be to return the matter for the determination of the chief executive, rather than to have the Court determine whether it was fair and reasonable for the land to be retained. Again, the basis on which leave was declined should not be taken to indicate approval of the course the litigation has taken.
[45]Edmonds v Attorney-General, above n 13, at [154] and Attorney General v Edmonds, above n 10, at [128]–[129].
[46]Attorney-General v Edmonds, above n 10, at [128], citing Hood v Attorney-General [2005] NZSC 53, [2007] NZRMA 28 at [5] and [7].
Although those observations were not binding, having been made on a leave application, this Court nevertheless noted the point made that the proper course might be remittal back to the Chief Executive, given that the decision is one for the Chief Executive and the Court had not had the benefit of the Chief Executive’s decision.[47]
[47]At [129].
We accept that the cases do not go so far as to say that the power to exercise the discretion under s 40(2)(a) will inevitably be lost as a result of the Chief Executive failing to act within a reasonable time. There may be justifiable reasons for not having done so that should be considered. In the present case however, the s 40(2) exemptions were put in issue on Dilworth’s pleadings. The Chief Executive could have addressed them, or at least provided an explanation as to why it was not possible to address them, prior to trial. It was insufficient simply to await the outcome of the s 40(1)(a) issue. The time has now passed for the Chief Executive to exercise the discretion. As noted in Williams, however, the s 40(2)(a) factors remain relevant when the Court comes to exercise its discretion to grant declaratory relief.[48]
[48]Williams v Auckland Council, above n 36, at [61].
The exemption under s 40(2)(b) raises a different issue. This exemption does not turn on the Chief Executive’s discretion. Rather, it is an evaluative decision regarding the character of the land. The Crown accepts that this is so with the result that the exemption under s 40(2)(b) was amenable to an assessment by the Court. However, Ms Cheng submitted that it was equally open to the Court to refer that assessment back to the Chief Executive. That course would, however, be inconsistent with our conclusion that the time has passed for the Chief Executive to consider s 40(2)(a).
Issue 2: should the High Court have determined the application of ss 40(1)(b) and (c) and 40(2) itself?
Dilworth argued that, since the Crown was not entitled to further time to consider the application of ss 40(1)(b) and (c) and s 40(2) the Court should have determined those issues in the same way as it had undertaken the enquiry into the application of ss 40(1)(a) on the material before it. We agree. Although the Crown was not entitled to further time to consider ss 40(1)(b) and (c), the statutory scheme is that the obligation to offer back does not arise until it has been established that the land is not required for those other purposes. The questions arising under ss 40(1)(b) and (c) were ones that could and should have been determined on the same basis as the issue under s 40(1)(a). The Crown bore the evidential onus of establishing whether ss 40(1)(b) or (c) or s 40(2) applied. It is evident from the material before us that the Crown did not seek to (and did not) discharge this onus. The only available conclusion is that the land is not (and was not at the relevant time) required either for another public work or for an exchange.
The position is the same in relation to the exemptions under s 40(2). It was for the Crown to demonstrate that one of the exemptions applied and it failed to do so. For the reasons we have previously discussed the Crown has lost its power to exercise the discretion under s 40(2)(a). The exemption under s 40(2)(b) is one that depended on the objectively determined state of the land. It was a matter on which the Court could have made a finding. As with the s 40(1) factors, however, there was no material before the Court on which a positive finding could have been made.
Issue 3: relief
If successful, Dilworth seeks to have the orders made in the High Court set aside and substituted with orders that reflect the outcome of the appeal. The Crown however invites the Court not to exercise its discretion to grant declaratory relief in relation to the Remaining Third Lands.
Declaratory relief is flexible and discretionary.[49] It is, however, generally the case that a successful plaintiff is entitled to the vindication of a declaration unless there are special considerations to the contrary or extremely strong reasons for refusal.[50]
[49]Lord Woolf, Jeremy Woolf and Lord Eassie (eds) The Declaratory Judgment (4th ed, Sweet & Maxwell, London, 2011) at 125; Mark v Attorney-General [2011] NZCA 176, [2011] 2 NZLR 538 at [91]; and Williams v Auckland Council, above n 36, at [99].
[50]Williams v Auckland Council, above n 36, at [99].
The Crown has identified a number of reasons that relief should not be granted. They are, first, that NZTA’s decision regarding its ongoing need for the subject lands was made in good faith and, as a result of that decision, the Chief Executive was not able to make an assessment about the s 40(1)(b) and (c) or the possible application of the s 40(2) exemptions until after the High Court had made its determination. Secondly, the s 40(2)(a) matters fall within the Chief Executive’s discretion and ought to be referred back, given the existence of another public works requirement being Auckland Transport’s bus layover area. Thirdly, Dilworth has not been disadvantaged by NZTA’s mistake as to its land requirements for the Remaining Third Lands.
We accept that NZTA acted in good faith. But we do not accept that the Chief Executive was unable to consider the issues arising under s 40(1)(b) and (c) during the two years that followed Dilworth commencing the proceeding. To the contrary, the fact that the Crown now seeks to assert an alternative need for the land (the bus layover) based on material that existed at the time of the NZTA decision strongly indicates that this issue was amenable to timely consideration. If there was a definite need for a bus layover on the Remaining Third Lands, material could have been put before the High Court but, as discussed, there is an insufficient evidential foundation on the material that was provided on which to conclude that such a need existed at the relevant time.
The last consideration is whether there would be disadvantage to the parties if relief were granted. Given our conclusion regarding the bus layover, we see little evidence of disadvantage to the Crown or the Council from the exercise of the discretion. If the need for a bus layover arises in the future, the Council can seek to compulsorily acquire the land it needs. It is not suggested that any other need exists.
The Crown says that there is no disadvantage to Dilworth because the rights of an owner are always subject to the continuing needs of the state. Retention is appropriate in this case because the Remaining Third Lands are required for the bus layover. This submission cannot succeed in light of our conclusion that the prospect of the land being used for a bus layover ought not to preclude the exercise of the Court’s discretion to grant declaratory relief. In our view Dilworth would be disadvantaged by the Crown’s position. As Ms Aldred rightly argued, the approach the Crown has taken to this litigation means that if Dilworth wishes to challenge the Chief Executive’s recent conclusion regarding the Remaining Third Lands it would have to embark on a fresh round of litigation.
We acknowledge that the outcome of this (and any further) litigation has economic consequences only for Dilworth. In Williams it was noted that the offer back provision was to compensate for a personal rather than an economic loss. Since land was acquired at fair value and the right to buy back would be at current market value, the underlying purpose was restoration rather than economic benefit to the owner.[51] However, although Dilworth’s interest is in the commercial return and development potential of the land, it is relevant that return on Dilworth’s landholding maintains its charitable purposes. For this reason, Dilworth’s interest is not purely commercial in the sense that, for example, the claimants’ interests were in Williams[52] or in Mark v Attorney‑General.[53]
[51]Williams v Auckland Council, above n 36, at [100]–[101].
[52]At [121]–[125].
[53]Mark v Attorney-General, above n 49, at [93].
We therefore consider that the circumstances warrant declaratory relief.
Result
The appeal is allowed.
The orders made in the High Court are set aside. They will be substituted with orders to the effect that:
(a)the second respondent must offer the subject lands for sale to the appellant, subject to the third order below, in terms of s 40(2) of the Public Works Act 1981 and subject to s 40(2A);
(b)the date for the purposes of assessing current market value under s 40(2)(c) will be 16 October 2013 (being 12 months from the date upon which the land was no longer required for the purposes of the public work for which it is held); and
(c)the offer back is subject to the appellant entering into an arrangement with the Crown of the sort entered into with the owners of the Robertson, Westfield and 5 Mahuru Street lands, as described in the High Court’s sealed judgment of 4 December 2017 (that is, the appellant as grantor granting to the Crown or third respondent as grantee/incumbrancee the limited interests shown in SO 460481 and SO 460478 for the purposes of ensuring the third respondent’s continued ability to access, inspect and maintain the Viaduct).
Counsel may confer as to the precise wording of the orders and file a joint memorandum within 10 working days.
The appellant is entitled to costs for a standard appeal on a band A basis, with certification for second counsel and usual disbursements.
Solicitors:
P M Cassin, Auckland for Appellant
Crown Law Office, Wellington for First and Second Respondents
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