Glenthorne Station Limited v University of Canterbury
[2024] NZHC 2529
•5 September 2024
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2022-409-000070
[2024] NZHC 2529
UNDER the Arbitration Act 1996 IN THE MATTER
of an application to set aside arbitral awards
BETWEEN
GLENTHORNE STATION LIMITED
Applicant
AND
UNIVERSITY OF CANTERBURY
Respondent
Hearing: 20 August 2024 Counsel:
S P Rennie and F H Scrase for Applicant J W C Nicolle for Respondent
Judgment:
5 September 2024
JUDGMENT OF RADICH J
[1] In 1876, the Governor of New Zealand granted a large block of land, near Lake Coleridge, to Canterbury College to be held on trust for the provision of “superior education”. It did so through the Canterbury Educational Reserves Sales and Leasing Act 1876.
[2] The land has, since then, been the subject of various pastoral leases and licences. Glenthorne Station Ltd has a lease of part of the land, which was granted in 1984.1 In an arbitration proceeding in 2020, to set the rental for the land, a dispute arose over which of two statutes governed the assessment of rent. The arbitrators decided that it was governed by the Public Bodies Leases Act 1969 and set the rent on
1 The 1984 lease was granted to Ryton Station Ltd. Subsequently, it has been transferred to Glenthorne Station Ltd.
GLENTHORNE STATION LTD v UNIVERSITY OF CANTERBURY [2024] NZHC 2529 [5 September 2024]
this basis.2 Glenthorne believes that, because of the trust the 1876 Act created, it should have been governed by the Crown Pastoral Land Act 1998. At the very least, it says, its lease should be on terms that would apply to Crown pastoral leases.
[3] The rent would be less if the Crown Pastoral Land Act applied. A material difference under the Crown Pastoral Land Act is that amenity values could not be considered.
[4] Glenthorne seeks leave under the Arbitration Act 1996 to appeal on questions of law arising from the award.
[5] Under r 26.17 of the High Court Rules 2016, the Court need not give reasons for granting leave unless it thinks reasons are required in the circumstances. I do grant leave but I am giving reasons because the analysis needed to consider the legal arguments is not straightforward and there is likely to be some value in capturing a summary of it at this stage in the process.
Background
The lease
[6]Glenthorne Station spans an area of about 25,243 hectares. It comprises:
(a)two separate Crown pastoral leases of about 15,455 hectares altogether;
(b)700 hectares in freehold land; and
(c)9087.64 hectares of high country land leased from the University.
[7] The lease from the University is on a perpetually renewable basis. The arbitration award referred to in [2] determined the rent payable on the land over the 11-year term beginning on 1 March 2009.
2 University of Canterbury v Glenthorne Station Ltd (Interim Award) 24 July 2020, per Bill Wilson KC, Phil Murray and Paul Mills [Interim Award].
[8] Under the Public Bodies Leases Act, a lease for that period cannot be issued by the University until the rental is determined.3 There have been considerable delays, both during the arbitration period and, in particular, in the progress of this proceeding. Outcomes are needed.
The arbitration awards
[9] The University appointed Phil Murray and Glenthorne appointed Paul Mills as arbitrators. Both are valuers. Bill Wilson KC was appointed as the third arbitrator. The agreed process was that all three would participate in the determination of the two preliminary legal issues that arose, which mirror the issues in this proceeding. Mr Wilson would then determine, as sole arbitrator, what the rental should be.
[10] In their interim award of 24 July 2020, the issues were described in the following way:
3. Assessment of the rental is complicated by those two issues. The first is whether the assessment is governed by the [Crown Pastoral Land Act], as Glenthorne submits, or by the [Public Bodies Leases Act], as the University contends. We will refer to this as ‘the first issue’. If the [Public Bodies Leases Act] applies, the second issue arises. This is whether amenity value should be taken into account. These are intangible and environmental values such as scenery and solitude which add to the enjoyment of living on the property or visiting it as tourists, and thus increase its value, but do not add to the productive capacity of the property. The University submits that amenity values are relevant, Glenthorne that they are not.
[11] In the interim award it was decided that the Public Bodies Leases Act applied4 and that amenity values must be part of the land value assessment on which the “fair annual rent” under the Public Bodies Leases Act is assessed.
[12] In a supplementary award of 24 July 2020, Mr Wilson then fixed the rental to be paid in the following terms:
19. I assess the rental under the [Public Bodies Leases Act], including amenity values, at $32,500. If the assessment were under the [Public Bodies
3 Public Bodies Lease Act 1969, sch 1 and cls 5, 12 and 15.
4 Though by a majority (Mr Wilson and Mr Mills) it was thought that nonetheless, the Crown Pastoral Land Act 1998 was relevant to the extent that, in setting the “fair market rental” under the Public Bodies Leases Act, the assessment would be informed by the rent that would be payable under the Crown Pastoral Land Act for the same land: Interim Award, above n 2, at [16].
Leases Act] excluding amenity values the rental would be $17,000. Under the [Crown Pastoral Land Act] the rental would be $8,700.
[13] The interim award was signed by all three arbitrators on 24 July 2020. The supplementary award was signed by Mr Wilson on the same day. However, the awards were not released until 31 January 2022. In the intervening period, two primary procedural issues had emerged. First, Glenthorne challenged Mr Murray’s position as an arbitrator5 and, secondly, in December 2021 and January 2022, Glenthorne asked Mr Wilson to withdraw. These issues are not relevant to this application but are mentioned to explain, in part, the time that has passed. The first issue is the subject of a separate originating application in this proceeding by Glenthorne for orders setting aside the arbitral awards which does not appear to have been progressed in any way pending the outcome of this application.
[14] Just before the awards were released to the parties, in a memorandum of 28 January 2022, Mr Wilson said that he had “decided on a provisional basis that these procedural issues can be put to one side, so that an Interim Award can now issue”.
[15] In the memorandum, Mr Wilson observed that, although the interim award on the two legal issues was agreed and signed by all three arbitrators, Mr Mills had since withdrawn his concurrence with the award and so the result was a majority award, (comprising Mr Wilson and Mr Murray), and with Mr Wilson’s supplementary award fixing the rent on that basis.
[16] Then, on 11 February 2022, Mr Mills issued a memorandum in which he said that he did not consent to the interim and supplementary awards being issued before the procedural issues were resolved and, on the same day, he issued an ‘independent award’ which, while maintaining the view that the Public Bodies Leases Act applied, provided a number of different reasons for that conclusion. On the basis of those reasons, he said that he disagreed with the conclusion reached in the interim award on the second legal issue. On that issue he concluded that amenity values should not be taken into account when assessing the fair annual rental.
5 Glenthorne gave a notice under cl 12(2) of sch 1 of the Arbitration Act 1996 challenging Mr Murray’s partiality.
The application and the positions of the parties
[17] The questions of law proposed in the application for leave to appeal, as modified through Glenthorne’s oral submissions, are these:6
(a)Is the rental governed by the Crown Pastoral Leases Act by virtue of a statutory trust imposed under the 1876 Act?
(b)If not and the Public Bodies Leases Act applies, are amenity values able to be considered in the assessment of a fair annual rent?
[18] The underlying point is that, if, because the statutory trust said to have been established through the 1876 Act requires the land to be leased under the Crown Pastoral Land Act (or at least on the same terms as a Crown pastoral lease), then amenity values cannot be included in the rental calculation.
[19] If leave to appeal is granted, Glenthorne has said in its application that it will, in the substantive appeal, seek relief varying the arbitral awards to:
(a)reflect the answers to the questions of law given on appeal;
(b)fix the rental of the land for the period 1 March 2009 to 29 February 2020 at $8,700 per annum;7 and
(c)require that the University issue to Glenthorne a renewed lease under the Land Act 1948 with rent and other terms determined in accordance with the Crown Pastoral Land Act for a 33-year period from 1 March 2020.
[20] The University, while engaging on each of the substantive points, says in addition that:
6 The question of law proposed in Glenthorne’s application, relating to the University’s capacity to issue a lease, is no longer pursued.
7 See [11] above.
(a)The errors alleged and the relief sought are outside the scope of the appeal. It is said that the arbitrators were to determine, only, the rental to be paid whereas the orders sought on this appeal would challenge the legality of the lease itself. The arbitrators, it is said, were not asked to, and did not have jurisdiction to, investigate whether the University should issue a renewed lease at all.
(b)The arguments that are made by Glenthorne are addressed more appropriately through a fresh declaratory judgment proceeding, incorporating an application for directions under the Trusts Act.
Principles governing a grant of leave to appeal
[21] Under cl 5(1)(c) of the second schedule of the Arbitration Act, any party to an arbitration proceeding may appeal to the High Court on any question of law arising out of an appeal with the leave of the High Court. Leave may only be granted where the Court “considers that, having regard to all the circumstances, the determination of the question of law concerned could substantially affect the rights of one or more of the parties”.8 A “question of law” is defined, for the purposes of cl 5 in the following way:9
(a)includes an error of law that involves an incorrect interpretation of the applicable law (whether or not the error appears on the record of the decision); but
(b)does not include any question as to whether:
(i)the award or any part of the award was supported by any evidence or any sufficient or substantial evidence; and
(ii)the arbitral tribunal drew the correct factual inferences from the relevant primary facts.
[22] If the statutory threshold is met, the Court retains a discretion as to whether leave should be granted.
8 Arbitration Act, cl 5(2).
9 Clause 5(10).
[23] The factors that should be considered in exercising that discretion were discussed by Blanchard J in Gold and Resource Developments (NZ) Ltd v Doug Hood Ltd.10 The most important consideration is the strength of the prospective appellant’s challenge and the nature of the underlying point of law.11 The prospective appellant must be able to show, on a preliminary view, that it has a strongly or very strongly arguable case that the arbitral tribunal has erred in law. Where the nature of the point of law is “one-off”, leave will rarely be given unless there are “very strong indications of error”. Where it is not one-off, a strongly arguable case is normally required. This high standard reflects the purposes of the Arbitration Act, which include encouraging the use of arbitration and of redefining and clarifying the limits of judicial review of the arbitral process and of arbitral awards.12 As Blanchard J said:13
… our Parliament, like those in the United Kingdom and Australia, has chosen to favour finality, certainty and party autonomy over [wide rights of appeal]. It intended to encourage arbitration as a dispute resolution mechanism. By enacting a statute with the expressed purpose of re-defining and clarifying the limits of judicial review of arbitral awards, Parliament has made clear its intention that parties should be made to accept the arbitral decision where they have chosen to submit their dispute to resolution in such a manner. It plainly intended a strict limitation on the involvement of the Courts where this choice has been made.
[24] Other factors that were identified as relevant to the Court’s exercise of discretion were these:14
(a)The importance of the dispute to the parties. Where the dispute has great significance to the parties – for example, where the dispute has a non-monetary significance to the parties or may be a useful precedent for governing their relationship going forward – it may be easier to obtain leave.
(b)How the question arose before the arbitrator. Leave will be more readily obtained where a legal issue has emerged as crucial to the
10 Gold and Resource Developments (NZ) Ltd v Doug Hood Ltd [2000] 3 NZLR 318, (2000) 9 TCLR 513 (CA) at [54].
11 At [54] and [54(1)].
12 Arbitration Act, s 5.
13 Gold and Resource Developments (NZ) Ltd v Doug Hood Ltd, above n 10, at [52].
14 At [54].
decision during the arbitral process, rather than being at the forefront from the beginning.
(c)The qualifications of the arbitrator. Where the arbitrator is legally qualified it will be harder to obtain leave.
(d)The amount of money involved. It may be somewhat easier for the parties to obtain leave if a “very substantial amount of money” is involved. In cases such as those, the cost of an arbitrator’s mistake will be greater.
(e)The delay involved in going through the courts. Where the delay is disproportionate to the amount of money at stake in the dispute, it will be more difficult for the applicant to get leave.
(f)Whether the contract provides for the arbitral award to be final and binding. Although not determinative, where the contract does provide for finality, the Court should lean toward giving effect to the parties’ stated preference.
A question of law that could substantially affect the rights of one or more of the parties
[25] There is little doubt that a question of law is involved. During a hearing before the arbitrators on a preliminary point in July 2017, the parties made submissions on whether the questions of the law now under consideration should be referred to the High Court in the first instance. In a ruling on 9 March 2018, the arbitrators described them as being “plainly” questions of law. 15 They referred to there being “tenable arguments in support of both parties’ positions on the primary issue”.16 The arbitrators said that in their view the Courts would not wish to undertake the initial examination
15 University of Canterbury v Glenthorne Station Ltd (Ruling of Arbitrators) 9 March 2018, per Bill Wilson KC, Phil Murray and Paul Mills at [8].
16 At [6].
and evaluation of the background material in the course of dealing with those issues. “Rather, the courts would expect us to undertake that exercise”.17
[26] It is sufficiently clear that rights flow from the determination of the issues. These hard-fought proceedings bear witness to that. As the arbitrators put it:18
Both parties have indicated that, if they did not agree with our answers to the first and second issues, they would wish to test those answers in the High Court. Given the difficulty and significance of both issues and the absence of any Court authority directly in point, that position is readily understandable.
[27] The significance of the answers to the issues in practical terms is demonstrated through the differences in rental values assessed by Mr Wilson in the supplementary award, depending upon the statute that applied.
[28] The threshold in cl 5 is met. The question then becomes whether the Court should exercise its discretion and grant the application.
The strength of Glenthorne’s challenge on the first issue
[29] The first thing that needs to be determined, in considering whether or not the Court should exercise its discretion, is whether Glenthorne’s case on the questions of law is strong.
The arbitrators’ findings
[30] The arbitrators found that the Crown Pastoral Land Act applies only to Crown pastoral leases and that the lease in question here was not a Crown pastoral lease. The lease contains, it said, 10 references to the Public Bodies Leases Act and only one reference to the Land Act 1948, under s 66 of which Crown pastoral leases are granted.19 The arbitrators rejected Glenthorne’s argument that the 1876 Act, under which the land was granted to the University, created a statutory trust that continues to run with the land, requiring the determination of annual rental to be on the same
17 At [8]. Furthermore, as the arbitrators went on to say in [9] of that ruling, Glenthorne and other leaseholders had already been to the High Court in an attempt to obtain an answer on the primary issue. The Court declined to provide the answer. Glenthorne appealed but abandoned the appeal.
18 Interim Award, above n 2, at [25].
19 And the reference to the Land Act 1948 in the lease was only for the purpose of importing a definition of “minerals”.
terms as Crown pastoral leases. It found that Glenthorne had not established an unbroken “legislative chain” between the 1876 Act and the Crown Pastoral Land Act, or an unbroken “contractual chain” between the original depasturising licence granted over the land and the current leasing arrangements, when Glenthorne needed both in order to succeed.
[31] Moreover, it found that the Crown Pastoral Land Act’s relevant provisions came into force only in 2012 through the Crown Pastoral Land (Rent for Pastoral Leases) Amendment Act 2012 and that the rental here was set as from 2009. It rejected an argument that the amendment Act, effectively, applied the provisions retrospectively.20
The positions of the parties
[32] In a nutshell, Glenthorne’s position is that the 1876 Act, under which the original grant was made, remains in force such that the trust through which the land was granted continues to exist. The terms and conditions that were required for licences under the 1876 Act align most directly, it is said, with today’s Crown pastoral leases and so should be determined on that basis.
[33] The University takes no issue with an argument that a trust continues to exist. But it asks what the terms of the trust are. It says that the 1876 Act, while not repealed, does not apply to current lease renewals and rent reviews. New leases have been granted by agreement between the parties, on new terms.
Discussion of the issue
[34] In order to consider the strength of Glenthorne’s claim, an historical analysis is needed, both of relevant legislation and of leasing arrangements. It is by no means complete or conclusive. But it serves to enable this interlocutory-level assessment to be made.
20 As discussed in [15] above, Mr Mills withdrew his support for the arbitrators’ reasons in this award, even although he had signed it when it was written.
The application of the 1876 Act
[35] Originally, the land was part of “Reserve 1578”, a much larger block of land, that, on 18 June 1873, was created through the reservation of land by the Superintendent of the Province of Canterbury to be held on trust for the purposes of an endowment for the promotion of superior education.21
[36] The 1876 Act came into force on 2 October 1876. It applied expressly to Reserve 1578. Under s 3, the Governor of the Colony of New Zealand could issue grants of such specified land (including Reserve 1578) to:
Canterbury College, their successors and assigns, to hold … upon trust for the several purposes respectively for which the same have been respectively reserved by the Superintendent and Provincial Council of the Province of Canterbury.
[37]This is the statutory trust on which Glenthorne says the land it still held.
[38] Section 10 of the 1876 Act required that any specified land, pending any sale under s 9 of the Act, was to be leased in accordance with certain requirements.
Ownership of the land over time
[39] Canterbury College, the University’s predecessor, was created in 1873 by the Canterbury College Ordinance 1873.
[40] In 1877, provinces, managed by provincial councils and superintendents, were abolished.22 Land districts and land boards took their place. In 1888, the land was granted to Canterbury College. The way it was granted is relevant. The Commissioner of Crown Lands of Canterbury instructed that a certificate of title be issued over Reserve 1578, rather than a Crown grant. The certificate of title provided that Reserve 1578 was held “in trust for the purpose of an endowment for the promotion of superior education”.
21 Under powers granted by s 10 of the Land Regulations of the Province of Canterbury 1857 and s 5 of the Public Reserves Act 1854. The Public Reserves Act enabled the Governor of the Colony of New Zealand to grant land to the superintendent of a province. Section 5 of the Act mandated that any such superintendent that had been granted land under the Act had to hold the land on trust for the public service of the province for the purposes specified in the grant.
22 Land Act 1877.
[41] Since the land was first granted, Reserve 1578 has been split into many parcels of land. Since 1888, all subsequent replacement certificates of title have recorded that the land forms part of Reserve 1578. Glenthorne says this means the parcels of land are all still subject to an ongoing statutory trust.
[42] In 1896, Canterbury College was split in two. The Canterbury Agricultural College was created. The Act that achieved this referred to the 1876 Act.23 In 1898, an Act relating to Canterbury College’s powers referred also to the 1876 Act.24 Canterbury College became Canterbury University College under the Canterbury University College Act 1933.25 While that Act repealed 14 statutes that related to Canterbury College and its powers, it did not repeal the 1876 Act. Canterbury University College became the University of Canterbury in 1957, through an amendment that made the change in name only.26
The ongoing application of the 1876 Act
[43] Glenthorne points to other enactments that make reference to the 1876 Act. The number of them creates a strong argument that the 1876 Act remains in force, despite the University’s point that the legislative chain was interrupted by the passage of various Land Acts, all of which included a definition of “Crown lands” as excluding land granted in fee simple, as the land granted to Canterbury College was.
[44] All of this goes to Glenthorne’s essential argument that there is direct linkage between the grant of the land under the 1876 Act and the basis on which the University holds it today.
[45] The University, on the other hand, points to correspondence dated 1984 from the University’s lawyers in which it is said that the lease then under discussion would be subject to the Public Bodies Leases Act. It says also that the University and its predecessor “always had its own independent power to lease”.
23 Canterbury College and Canterbury Agricultural College Act 1896, s 53(1)(a).
24 Canterbury College Powers Act 1898, s 9.
25 Now referred to as the University of Canterbury Act 1933 according to s 3 of the University of Canterbury Amendment Act 1957.
26 University of Canterbury Amendment Act 1957, s 4.
[46] Section 10 of the 1876 Act provided that any lease under it was to be the same as for depasturing licences over “waste lands of the Crown”. The term “waste lands” is a reference to land which was unwanted by the Crown. The Crown may only “alienate” unwanted land (by sale or lease) through statutory powers. As explained by Simon France J in New Zealand Fish and Game Council v Attorney-General, there is a rich history of land enactments enabling alienation.27 Relevant for present purposes are the Waste Lands Act of 1858, the many Land Acts passed since then (most recently the Land Act 1948), all leading to the Crown Pastoral Land Act in 1998.
[47] The University points to the fact that there is no longer a class of land termed “waste lands”. It says also that any rights under the Waste Lands Regulations 1875 came to an end following the repeal of those regulations by the Land Act 1877.
[48] However, there is a case to say that the leasing requirements under the 1876 Act did not depend on the terms of particular waste lands regulations and that its overriding principles survive the passage or repeal of particular regulations or legislation. The sequence of statutory enactments that followed on “waste lands” or, more recently, Crown pastoral leases can be seen as something of a progression, with the same underlying goals.
[49] The progression can be traced through to the provision that was made for pastoral leases in the Land Act 1948 and then in the Crown Pastoral Land Act.
[50] Moreover, Glenthorne is in a position to be able to track the leases for the land alongside the sequence of statutory enactments and to show that, with the exception of the most recent lease that has been in place, they have been on the same terms as those which would apply to Crown pastoral leases. There is, as I see it, something to be said for the point that the precursors to the Public Bodies Leases Act, the first of which was enacted in 1887, did not interrupt the application of the 1876 Act to the land.
27 New Zealand Fish and Game Council v Attorney-General HC Wellington CIV-2008-485-2020, 12 May 2009 at [16]–[18].
[51] Finally, under this head, I come to the arbitrators’ view, referred to in [31] above that the provisions of the Crown Pastoral Land Act could not be applied retrospectively. Even if that was so, there is something to be said for Glenthorne’s argument that, at the very least, the lease must be construed in a way that is consistent with the Crown Pastoral Land Act. Section 4 of the Public Bodies Leases Act is relevant. It provides that the powers in the Act are in addition to those that are vested in any other leasing authority by any other Act or by any trust.
[52] For all of these reasons, I am satisfied that the appellant’s challenge on the first issue is sufficiently strong to meet the threshold discussed by Blanchard J in Gold and Resource Developments (discussed in [23] above).
The strength of Glenthorne’s challenge on the second issue
[53] In the event that Glenthorne does not succeed on the first issue, and the lease is to be governed by the Public Bodies Leases Act, then it says that amenity values should not be included in an assessment of rental in any event. Amenity values can be taken into account under the Public Bodies Leases Act. The arbitrators did so here.
[54] But Glenthorne says that, even if the Public Bodies Leases Act does govern leases over the land, the most recent lease (as with previous leases) was in terms that aligned with those in Crown pastoral leases.28 It sees it as well established that amenity values are not to be taken into account under Crown pastoral leases and so the same principle should, it is said, be applied here. Reference is made to the following documents:
(a)The decision of the Otago District Land Valuation Tribunal in Commissioner of Crown Lands v Minaret Station Ltd where it was found that to consider amenity values in Crown pastoral leases “would be inequitable in the opinion of the Tribunal and the antithesis of the intent and direction of the legislation”.29
28 In providing, for example, that there is no right in the soil, and providing for restrictions on stock numbers, for a perpetual right of renewal and for the calculation of fair annual rent on a ‘land exclusive of improvements’ basis.
29 Commissioner of Crown Lands v Minaret Station Ltd DC Dunedin LVP-2/05, 31 July 2009 at [208].
(b)The report of a ‘Quality Assurance Panel comprising Howard Fancy, Sir Thomas Gault and John Larmer in 2010, which supported the outcome in Minaret Station in saying:30
In other words the leases provide only limited rights in terms of the land’s use only for pasturage. Their evaluation cannot include views about the wider possible economic uses or the environmental or amenity values of the land.
(c)A letter from the Hon Maurice Williamson, as Minister for Land Information, on 5 July 2011 to Dr Rod Carr at the University of Canterbury in which he emphasised, in relation to the Crown pastoral leases held by the University, the findings of the panel referred to in (b) above.
[55] The University says, as the arbitrators did in the interim award, that the Minaret Station decision and the Quality Assurance Panel report apply only to Crown pastoral leases and so have no application here.
[56] However, there is much to be said for the argument that this is not a valid distinction and that leases over the lands in question have been in materially the same terms as Crown pastoral leases, involving the same restrictions on the use of the land. As with Crown pastoral leases, the University’s lease determined rent on a land exclusive of improvements basis.31
[57] Accordingly, I am satisfied that the applicant’s challenge on the second issue is sufficiently strong to meet the Gold and Resource Developments threshold.
The importance of the dispute to the parties
[58] As the arbitrators said in the interim award, these issues are of significance to the parties.32 I cannot accept the point made for the University that the issue relates only to the determination of a fair annual rent for an 11-year period from March 2009
30 Howard Fancy, Thomas Gault, John Larmer Implementing earning capacity rents for Crown pastoral land – Report of the Quality Assurance Panel (2 March 2010) at 5.
31 Until, in the case of Crown pastoral leases, pt 1A of the Crown Pastoral Land Act which, not dissimilarly, determines rents in accordance with a formula.
32 Interim Award, above n 2, at [25].
such that it is not significant to either party. As Fitzgerald J said in Stevely-Cole (in their capacity as trustees of the Mangahewa Trust) v Dilworth Trust Board, it is unreal to expect that rent set by an award would not be considered in subsequent rent reviews.33
[59] Not only are the rental values materially different in the case of a lease that is governed by (or set on a basis that is consistent with) the Crown Pastoral Land Act, but a finding by the Court will influence the nature of future leasing arrangements.
[60] As mentioned in [20(a)] above, the University has said that the errors alleged and the relief sought are outside the scope of the appeal. I do not see that as being the case. The statutory basis for setting the rental is directly on point and will influence the terms of the lease. In any event, the form of any relief will be a matter for consideration when the substantive appeal is heard.
How the question arose before the arbitrators
[61] The legal issues were front and centre in the arbitration. However, as mentioned already, it would appear to have been the expectation of all concerned that the issues would be decided ultimately by the Court.
The qualifications of the arbitrators
[62] As counsel for the University has put it, Mr Wilson’s qualifications are unimpeachable. His views are to be afforded considerable respect. The parties relied upon his expertise for very good reason. But even Mr Wilson saw the anticipated reference to this Court as being “readily understandable”.
The amount of money involved
[63] The University says that the difference between rental under the Public Bodies Leases Act and the Crown Pastoral Land Act is a small sum. It amounts to $230,450 over the term of the lease.
33 Stevely-Cole (in their capacity as trustees of the Mangahewa Trust) v Dilworth Trust Board [2020] NZHC 2843 at [39].
[64] However, Glenthorne says that it would render its farming operation uneconomic and that the significance of the sum is demonstrated by the efforts put into having these issues determined by the parties. That is a reasonable position.
The delay involved in getting through the Courts
[65] The delays have occurred already. It is now over 12 years since the beginning of the rent review process. This proceeding has been on foot for two and a half years with very little traction. However, the parties are now at a point at which they have prepared their arguments and little more is required to develop them further for a substantive appeal. Moreover, delay from the appeal is proportionate to the amount of money at stake.
[66] However, two interrelated procedural points fall to be considered. The first is that, on 2 August 2024, Glenthorne filed a judicial review proceeding in the Wellington Registry against the Commissioner of Crown Lands in which declarations are sought that the 1876 Act remains in force and applies to the land leased by Glenthorne and that the Commissioner has a duty to sell the fee simple interest in the land to Glenthorne.
[67] The proceeding follows an application made by Glenthorne to the Commissioner in October 2019 under the 1876 Act to purchase the University’s fee simple interest in the land. The Commissioner, in considering the request, considered that the 1876 Act did apply to the land and that he was empowered to consider the purchase application. However, as I understand it, Glenthorne and the Commissioner are both of the view that a declaratory decision is needed from the Court before matters go any further.
[68] The judicial review proceeding is relevant, at one level, because the view reached by the Commissioner in that case would tend to support Glenthorne’s view in this case and, at another level, there may well be sense in the proceedings being consolidated or heard consecutively. I express no view on that because it has not been the subject of argument but mention it in the course of considering this discretionary factor because the proceedings are, at least, closely related.
[69] The second procedural point that falls to be considered is a submission made for the University that the issues raised by Glenthorne would better be the subject of a fresh declaratory judgment proceeding – including perhaps an application for directions under the Trusts Act – filed by the University. The University puts it on the basis that, while it does not accept that there are errors of law in the arbitrators’ report, the underlying questions “are nevertheless important and the University wants them answered too”. It makes the fair point that they should be answered, not just for Glenthorne, but for all high country lessees who have leases of land that formed part of the original Reserve 1578. There are, as I understand it, another six leases. The lessees should, the University says, have the ability to be heard. So too, it suggests, should Te Rūnanga o Ngāi Tahu.
[70] There is certainly something to be said for that. Significant issues may arise on the parts of those other parties. However, for present purposes, there is a need for the rental to be fixed for the Glenthorne lease which, in turn, needs the issues on appeal to be considered. It would in my view be at odds with the overriding objective of the High Court Rules 2016 – to secure the just, speedy and inexpensive determination of any proceeding or interlocutory application – to keep this case in a holding pattern any longer. The broader interests the University raises are certainly relevant but are not such, at this stage in this protracted proceeding, as to preclude leave being granted.
[71] Taking all of this into account, the delay occasioned by an appeal is not a factor that would count against the grant of leave in the particular circumstances.
The finality of the arbitral award
[72] If an arbitration agreement provides for the arbitral award to be final and binding, it will be at least an indication that the parties did not contemplate becoming involved in litigation over the award and might cause the Court to lean towards giving effect to the preference indicated by the parties in the agreement.
[73] In this case, there is no contractual term which provides that an arbitral award is final and binding. Moreover, both parties indicated to the arbitrators that they would be likely to bring appeals. The University says that it only indicated it would do that because it did not accept that the Crown Pastoral Land Act restrictions could be applied
to setting rent on the University’s lease and that it did not contemplate Glenthorne bringing an appeal seeking to challenge the right to lease the land altogether. I do not see that Glenthorne is doing that. As mentioned earlier, its case is that the rental needs to be set on a different basis and that, if it is, then the renewed lease that follows must reflect that.
[74]Accordingly, this is not a factor that advances the position either way.
Conclusion and outcome
[75] For these reasons, there are in my view questions of law here that affect substantially the parties’ rights. I see it as being appropriate to exercise my discretion to grant leave having regard to the strength of Glenthorne’s position on the issues, the nature and importance of them and the reality, recognised at the outset, that the issues, while dealt with usefully and appropriately by the arbitrators in the first instance, would fall to be considered by the Court.
[76] Accordingly, Glenthorne’s application for leave to appeal from the interim and supplementary awards of Bill Wilson KC, Phil Murray and Paul Mills, dated 24 July 2020 and delivered to the parties on 31 January 2022, is granted.
[77] The questions of law to which the appeal relates are those set out in [17] above. The nature of the relief that might be available in the event that the questions are answered in Glenthorne’s favour remains at large and will be a matter for consideration during the hearing of the appeal.
[78] While this application was only the first step in the appeal process, it has produced a substantive outcome in its own right and Glenthorne is entitled to its costs, on a 2B basis, whatever the outcome of the substantive appeal may be. I make an order accordingly.
Radich J
Solicitors:
Rhodes & Co, Christchurch for Applicant Simpson Grierson, Christchurch for Respondent
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