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.

.....................................................
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…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] NZHC 680
Decision Date: 16 April 2018

CaseChat Overview and Summary

Grande Meadow Developments Ltd and other applicants sought interim measures against Clark Road Developments Ltd in the High Court of New Zealand, Auckland Registry. The applicants and respondent were involved in property development at Scott Point Special Housing Area in Hobsonville, Auckland, and had signed a Development Cooperation Agreement (DCA) on 5 August 2015. However, the respondent had entered into its own arrangements to build common infrastructure on its property without signing Infrastructure Cost Sharing Agreements (ICSAs) as envisioned in the DCA. The applicants sought interim measures to prevent the respondent from proceeding with its amended subdivision consent, which allowed the development to be completed in stages. They argued that this could result in harm that would not be adequately compensable by damages. The court heard the parties at length and allocated a half-day fixture for the hearing on 30 April 2018. Most of the hearing concerned whether interim interim measures should be made to preserve the current situation until the fixture. After hearing submissions, the court made orders preserving the current position until this judgment was issued.

The legal issues before the court were whether interim interim measures were justified to restrain the respondent from applying to the Auckland Council for a certificate in respect of subdivision consent until certain conditions were met or until further order of the arbitrator or the court. The applicants argued that harm not adequately compensable by damages was likely to result if the interim interim measures were not made. They also submitted that there was a reasonable prospect that they would succeed at arbitration. The respondent argued that the applicants' substantive case was weak and that the balance of convenience favoured allowing the start of the certifying process. The court considered the fact that the interim interim measures would only last until the determination of the application to be heard on 30 April 2018. The court also considered the evidence of harm from certification going ahead and the possibility that the applicants would succeed in their claim.

The court found that interim interim measures were justified to restrain the respondent from applying to the Auckland Council for a certificate in respect of subdivision consent until certain conditions were met or until further order of the arbitrator or the court. The court considered that the harm to the applicants from certification going ahead outweighed the harm to the respondent of issuing interim interim measures for the period they would be in force. The court also considered that there was a reasonable possibility that the applicants would succeed in their claim. The court ordered that the respondent was 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 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, the parties agree otherwise, further order of the Court, or further order of any arbitrator appointed to adjudicate any dispute between the parties to this application.

The court set down a half day fixture to hear the application for interim orders at 10.00 am on Monday 30 April 2018. The timetable for the hearing was set by consent. The applicants were to file and serve any reply evidence within three working days of the date of this judgment. The applicants were to file and serve a 10-page synopsis of submissions by 5.00 pm on Wednesday 18 April 2018. The respondents were to file and serve a 10-page synopsis of submissions by 5.00 pm on Tuesday 24 April 2018.

Orders