Grande Meadow Developments Ltd v Clark Road Developments Ltd

[2018] NZHC 680

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-376 [2018] NZHC 680

BETWEEN

GRANDE MEADOW DEVELOPMENTS LTD
First Applicant

AND

NEW ZEALAND GENERAL REAL ESTATE LTD

Second Applicant

AND

KINGSTONE PROPERTY LTD

Third Applicant

AND

CLARK ROAD DEVELOPMENTS LTD

Respondent

Hearing:	11 April 2018
Appearances:	J D McBride for the Applicants J A Knight for the Respondent
Minute:	16 April 2018

JUDGMENT OF PALMER J

This judgment is delivered by me on 16 April 2018 at 11.30 am pursuant to r 11.5 of the High Court Rules.

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Registrar / Deputy Registrar

Solicitors/Counsel:

J D McBride, Barrister, Auckland Burton Partners, Auckland Simpson Grierson, Auckland

GRANDE MEADOW DEVELOPMENTS LTD & ORS v NEW ZEALAND GENERAL REAL ESTATE LTD [2018] NZHC 680 [16 April 2018]

Context

[1]    The applicants and respondent are all involved in property development at the Scott Point Special Housing Area at Hobsonville, Auckland. The respondent owns a property down the hill from the properties owned by the applicants. The parties signed a Development Cooperation Agreement (DCA) on 5 August 2015 which envisaged they would go on to form individual companies to carry out common infrastructure works under Infrastructure Cost Sharing Agreements (ICSAs). However, no ICSAs have yet been signed. Instead, the respondent has entered into its own arrangements with contractors to build common infrastructure for wastewater and stormwater on its property. The respondent has obtained a new resource consent from Auckland Council allowing the subdivision to be undertaken in stages.

[2]    This has given rise to disputes. The respondent previously unsuccessfully initiated interlocutory proceedings over payment.1 The applicants now say the respondent has ignored its obligations under the DCA between them. Alternative dispute resolution mechanisms of mediation and arbitration have been invoked. The respondent has engaged new lawyers. Both sides say progress is being made.

Application for interim measures

[3]    Pending the outcome of arbitration or settlement, the applicants seek interim measures preventing the respondent from giving effect to its amended subdivision consent which allows completion of the development in stages. The applicants are concerned that, if the respondent’s infrastructure is complete in stages, their own infrastructure will not be able to connect with it.

[4]    At the call of the proceeding in the duty list on the morning of Wednesday  11 April 2018 the parties sought timetabling orders for a hearing on the application for interim measures. I adjourned the call to the afternoon and heard the parties at greater length than is possible in a duty list. I allocated a half-day fixture for the hearing on 30 April 2018 and made timetabling orders by consent, as noted below. Most of the hearing concerned whether “interim interim” orders should be made to preserve the

1      Clark Road Developments Ltd v Grande Meadow Developments Ltd [2017] NZHC 2589.

current situation until that fixture. After hearing submissions, I made orders preserving the current position until this judgment was issued.

[5]    Clause 9.5 of the DCA entitles the parties to issue proceedings for “urgent interlocutory relief”, consistent with arts 9 and 17-17B of Schedule 1 to the Arbitration Act 1996. The applicants apply for interim orders to restrain the respondent from applying to the Auckland Council for a certificate unde224(c) of the Resource Management Act 1992 in respect of subdivision consent until either certain conditions are met or until further order of the arbitrator or the Court.

Submissions on interim interim measure

[6]    Mr McBride, for the applicants, submits the interim interim measure is necessary because, otherwise, harm not adequately compensable by damages is likely to result. He says harm will arise from the difficulties of quantifying the losses to the three or four upstream properties from the completion of consent to use common infrastructure and the possibility the respondent may not be in a financial position to pay for those losses. The applicants expressed concerns to the Council about a staged approach delaying the common infrastructure and the applicants’ progress and completion of their works on their sites.2 Mr McBride also submits there is no evidence of harm to the respondent from waiting 19 days before applying for a certificate. He submits there is a reasonable prospect the applicants will succeed at arbitration. The applicants are effectively concerned that even starting the process of obtaining a certificate could lead to the respondent’s approach to common infrastructure being regarded as a fait accompli.

[7]    Ms Knight submits the applicant’s substantive case is weak, there is no explanation of how staging the developments affects the nature or timing of the infrastructure and the applicants are equally responsible for the failure to agree on ICSAs. She says the Council is likely to take eight to 10 weeks to process an application for the s 225(c) certificate if the application is perfect and all information is to hand. She is instructed the respondent is ready to make the application in a “soft” way, by delivering part of the documents to the Council so that it can begin its

2      Letter from Jeremy Brabant to the Auckland Council dated 24 May 2016 at [10]–[11].

inspections. Ms Knight submits the balance of convenience favours allowing the start of the certifying process. The respondent has offered an alternative undertaking not to uplift the certificate and titles but that is not acceptable to the applicants. No other interim measure is acceptable to the respondent.

Decision on interim interim measures

[8]    My decision on the applicant’s request for interim interim measures is heavily influenced by the fact that they will only last until the determination of the application to be heard on 30 April 2018.

[9]    The respondent’s application for Council certification is not fully ready yet. There is no evidence it will be ready within that time. While the applicants’ evidence of harm from certification going ahead is currently somewhat fuzzy, I consider it is sufficient to outweigh the harm to the respondent of issuing interim interim measures for the period they will be in force. There may well be harm not adequately reparable by damages if the respondents’ infrastructure is certified but not able to be eventually connected to the applicants’ infrastructure. And, on the basis of the limited evidence before me, I consider there is a reasonable possibility the applicant will succeed in its claim.

[10]   Accordingly, within the period of time necessary for a reasonably expeditious court determination of the application to be heard on 30 April 2018 I am satisfied that interim interim measures are justified. That should not be taken as an indication of any decision about the application for interim measures for the longer period that will be argued on 30 April 2018.

[11]   I order the respondent is restrained from applying to Auckland Council for a certificate issued pursuant to s 224(c) of the Resource Management Act 1991, in respect of subdivision consent SUB60039674-A (varying LUC-2015-1698) and SUB- 2016-1700) and granted by Auckland Council on 20 October 2017, until either:

(a)the terms of all outstanding ICSAs set out in Schedule 1 to the DCA dated 5 August 2015, and to which the respondent is named as a party, are agreed and duly executed by all relevant parties; or

(b)the parties agree otherwise; or

(c)further order of the Court; or

(d)further order of any arbitrator appointed to adjudicate any dispute between the parties to this application.

Timetabling

[12]   I set down a half day fixture to hear the application for interim orders at 10.00 am Monday 30 April 2018. By consent, the timetable will be:

(a)The applicant is to file and serve any reply evidence within three working days of the date of this judgment.

(b)The applicants will file and serve a 10-page synopsis of submissions by

5.00 pm Wednesday 18 April 2018.

(c)The respondents will file and serve a 10-page synopsis of submissions by 5.00 pm Tuesday 24 April 2018.

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Palmer J