Marsden City Limited Partnership v Whangarei District Council
[2022] NZHC 2823
•31 October 2022
IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY
I TE KŌTI MATUA O AOTEAROA WHANGĀREI-TERENGA-PARĀOA ROHE
CIV-2020-488-73
[2022] NZHC 2823
BETWEEN MARSDEN CITY LIMITED PARTNERSHIP
PlaintiffAND
WHANGAREI DISTRICT COUNCIL
Defendant
Hearing: 26 October 2022 Appearances:
M E Casey KC and A Casey for the plaintiff
H P Harwood and O J Maassen for the defendant
Judgment:
31 October 2022
JUDGMENT OF GORDON J
This judgment was delivered by me
on 31 October 2022 at 2.30 pm, pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
Solicitors:
Kemps Weir, Auckland Simpson Grierson, Wellington
MARSDEN CITY LTD PARTNERSHIP v WHANGAREI DISTRICT COUNCIL [2022] NZHC 2823 [31
October 2022]
[1] This judgment explains why, after hearing from counsel, I declined to hear the claim by the plaintiff, Marsden City Limited Partnership (Marsden). I indicated my view that the matter should be referred back to the Land Valuation Tribunal (Tribunal) for the proceeding already initiated there, to continue. I also indicated I would be prepared to stay this proceeding pending any decision from the Tribunal.
[2] Marsden owns 87 parcels of land, each in a separate record of title, at One Tree Point, Marsden Point in the Whangārei District (the property). Following the 2018 general revaluation by the defendant, the Whangārei District Council (the Council), Marsden filed objections in the Tribunal.
[3]An explanation of the procedural history is necessary.
Proceedings before Tribunal
[4] In a minute of the Tribunal Chairman, Judge Smith, dated 30 October 2019, following a judicial telephone conference with counsel,1 Judge Smith noted the Tribunal had received some 88 objections to the valuations of the property.
[5]The minute then states:
[2]There are two issues at hand:
(a)what is the categorisation of the land; and
(b)can 87 properties be dealt with as a single rating unit?
[3] Mr Mathias referred to a Court of Appeal decision on the question of categorisation being only reviewable in the High Court, and also the question as to whether any rating unit arguments are justiciable in this Court or in the High Court.
[6] The Judge directed that counsel were to file memoranda advising as to what, if any, matters were justiciable in the Tribunal on the objections that had been filed.
[7] In the memorandum of counsel for the Council dated 13 December 2019, the Council’s position on jurisdiction was stated as follows:
1 Counsel appearing in this Court for the parties were not counsel in the Tribunal.
[21] Council’s position is that the law is as set out by the Court of Appeal in Telecom New Zealand Ltd v Christchurch City Council.2 As stated by the Court of Appeal in this judgment the jurisdiction of the Tribunal “under the Rating Valuations Act [1998] is limited to valuing land”.3
[22] The determinations made by the Council through the application of the Rating Valuations Act and the [Rating Valuation] Rules [2008] are administrative decisions and if they are to be challenged this must be by way of judicial review.
[8] In his response to the Tribunal, also dated 13 December 2019, counsel for Marsden submitted:
The Objector, Marsden City Limited Partnership, acknowledges and largely accepts Council’s position that the Tribunal does not have jurisdiction in respect of the first and second objections lodged with the Land Valuation Tribunal. These objections are:
1. the objection to the rating category code applied by Council to the Marsden City property;
2. the objection to Council not amalgamating the various parcels of land comprising Marsden City into one rating unit for rating purposes.
Marsden City LP accepts that it must apply to the High Court for a judicial review of Council’s decisions in respect of the above objections. …
[9]In a minute of 18 December 2019 Judge Smith stated:
[2] At the conference [on 17 December 2019], it was discussed and agreed among the parties that the issues concerning the classification of the 88 properties and the Rating Category Codes were beyond the jurisdiction of the Tribunal. Accordingly it was agreed that these matters be addressed by the High Court first.
Proceedings brought in High Court
[10] Marsden did not bring an application for judicial review as indicated above. Rather, it sought declarations, but without reference in the statement of claim to any particular statute or any other basis for the Court’s jurisdiction. I will return to the question of jurisdiction later in this judgment.
2 Telecom New Zealand Ltd v Christchurch City Council CA25/04, 7 March 2005.
3 Above n 2, at [39].
[11] The statement of claim, filed in September 2020, had two causes of action each seeking declarations and other relief. The first cause of action remains live for determination at this hearing. Under it Marsden seeks:
(a)A declaration that the property should have been valued on the basis of the several records of title comprising a single rating unit.
(b)A declaration that the basis of value should not be the property’s zoning for each record of title but as a single rating unit used for pastoral farming.
(c)An order setting aside the valuations of the property undertaken by the Council and directing it to undertake new valuations taking into account the above two declarations.
[12] In his written submissions, Mr Casey KC suggested that (b) above might be modified so that the potential for future development could be reflected in the valuation, as acknowledged by the valuer engaged by Marsden. Mr Casey submitted that this declaration may be better expressed as: “the value should be as a single rating unit used for pastoral farming with the potential for development at some future time”.
[13] In relation to (c) above, Mr Casey suggested the Court might consider it appropriate to refer the matter back to the Tribunal given the extant objections before the Tribunal, rather than directing the Council to undertake new valuations.
[14] The parties settled the second cause of action. It is therefore not necessary to go into the detail of that cause of action save to mention it related to the first of the two issues identified by the Tribunal Chair in his 30 October 2019 minute set out at
[5] above.
[15] Thus, the only remaining issue in respect of which the Tribunal considered it did not have jurisdiction is whether the 87 properties comprise a “single rating unit”.
Jurisdiction of Tribunal to determine “a single rating unit”
[16] Both Mr Casey for Marsden and Mr Harwood for the Council accepted that the Tribunal does have jurisdiction to determine this issue, and that counsel previously representing the parties were incorrect when they submitted otherwise to the Chair of the Tribunal.
[17] I agree with counsel appearing before me. The Tribunal does have jurisdiction to determine whether the 87 separate records of title constituted a single rating unit for reasons I refer to below. But first I set out, in brief, the relevant parts of the statutory scheme.
[18] The issue in this case concerns what is known as the “general rate”. General rates are set under s 13 of the Local Government (Rating) Act 2002 (LGRA) and are based on the rateable value of the land. The Council in this case has adopted the “land value” as the basis for setting the general rate.4
[19] The Council is required to maintain a district valuation roll containing information required by the Rules in respect of each rating unit in its district.5 The roll must be revised every three years by revaluing every “rating unit”.6 The Council did so in this case on 1 August 2018.
[20] “Rating unit” in the LGRA is defined by reference to the definition in the Rating Valuations Act 1998 (RVA). Under s 5B(1) of the RVA the default position for rating valuation is that the land comprised in each record of title is a separate rating unit and should be valued individually. Subsections (2) and (3) of s 5B empower the Valuer-General to make rules for determining whether particular land comprised in two or more records of title constitutes a single rating unit.
4 Local Government (Rating) Act 2002 [LGRA], s 13(3)(a)(iii).
5 Rating Valuations Act 1998, s 7.
6 Rating Valuations Act 1998, s 9.
[21] In accordance with s 5B of the RVA, r 2.4.1.2 of the Rating Valuation Rules 2008 (the Rules) sets out the circumstances where two or more records of title constitute a single rating unit:
2.4.1.2Two or more certificates of title
Two or more certificates of title constitute a single rating unit where the land is owned by the same person or persons, is used jointly as a single unit, and is contiguous or separated only by a road, railway, drain, water race, river or stream, and:
(a) a substantial improvement straddles certificate of title boundaries, or
(b) certificates of title are legally required to be alienated together, or
(c) in the case of a large holding such as a reserve, airport, port, or rail yard, it is unreasonable to treat each separate certificate of title as a rating unit, or
(d) the land is used as one farming operation and it is likely that the certificates of title [now records of title] will be alienated as only one farming operation.
[Emphasis added]
[22] The Council’s position was and continues to be that r 2.4.1.2 does not apply. Marsden’s position is that the property should have been valued on the basis that the 87 records of title comprised a “single rating unit”. More particularly, the issue in dispute is the second limb of r 2.4.1.2(d), namely whether “it is likely that the [records] of title will be alienated as only one farming operation”.
[23] Counsel referred to two cases, Franklin District Council v Cryer7 and Kent v Upper Hutt City Council,8 both of which were appeals to the High Court from decisions of the Tribunal where the above issue had been determined by the Tribunal. There was no issue raised in either of those cases as to the Tribunal’s jurisdiction.
[24] It seems that the legal confusion before the Tribunal in this case arose from the misapplication of the Court of Appeal’s decision in the Telecom case.9 The issue in
7 Franklin District Council v Cryer [2011] 1 NZLR 529 (HC).
8 Kent v Upper Hutt City Council [2014] NZHC 1958.
9 Telecom New Zealand Ltd v Christchurch City Council, above n 2.
that case, in brief, was whether the Council’s valuations were invalid, in that the valuation for Telecom’s infrastructure assets should be “nil”. Following a preliminary hearing in which it heard submissions on this point, the Tribunal held that the valuation was invalid and should be declared a nullity.
[25] The Court of Appeal, agreeing with the High Court, held that the Tribunal had misconceived its function. The Court of Appeal observed that the Tribunal’s powers do not include those available to the High Court in judicial review. Specifically, the Tribunal does not have powers to make declarations or to order that valuations are invalid or nullities.10 The Tribunal should have concentrated on its sole function: valuing Telecom’s infrastructural assets as at the valuation date.
[26] I accept counsel’s submission that the Telecom case is not authority for the proposition that the Tribunal is unable to determine the correct application of the RVA and Rules in relation to a particular objection. It necessarily has this jurisdiction in performing its valuation function.
[27] Mr Casey acknowledged that with the benefit of hindsight, it would have been desirable for counsel to have reconsidered whether to pursue the first cause of action, after the second cause of action had settled. Mr Casey accepted that this Court could send the matter back to the Tribunal (as did Mr Harwood for the Council) but submitted that this Court had jurisdiction to hear the claim.
Jurisdiction of this Court
[28] To be fair to counsel, I note that the Council had raised the issue of jurisdiction in an earlier memorandum and Mr Casey had responded, also by memorandum. However, the issue was not addressed by the Court at the time and accordingly it was necessary for counsel to address the issue before me.
[29] Mr Harwood submitted that this Court would have jurisdiction to hear a claim brought under either the Declaratory Judgments Act 1908 or under the Judicial Review Procedure Act 2016. However, as already noted, the claim has not been brought in
10 Telecom New Zealand Ltd v Christchurch City Council, above n 2, at [39].
reliance on either. Mr Harwood submitted that it would be open to the Court to direct that the proceedings be treated as if they were an application for judicial review and invited the Court to do so. Section 12 of the Judicial Review Procedure Act provides:
12 Proceedings for declaration or injunction may be treated as application for review
(1)This section applies if—
(a) proceedings are commenced for a declaration or an injunction, or both, with or without a claim for other relief; and
(b) the exercise, refusal to exercise, or proposed or purported exercise of a statutory power is an issue in the proceedings.
(2)If this section applies, the court on the application of any party may, if it considers it appropriate, direct that the proceedings be treated and disposed of, so far as they relate to the issue in subsection (1)(b), as if they were an application for judicial review.
[30] Mr Harwood submitted that the scope of the Court’s powers on judicial review permit enquiry into the correct interpretation of r 4.2.1.2 and whether the decision was reasonably open to the Council. Mr Harwood also submitted that the Court has a sufficient basis to conclude that the Council’s decision was lawful and reasonably available to it based upon essential facts that he submitted were mostly agreed.
[31] There are two difficulties with Mr Harwood’s submission regarding s 12 of the Judicial Procedure Act. First, the way in which Marsden frames its case is not an attack on the Council decision. Second, the Court’s power under s 12 to order that the proceeding continue as an application for judicial review appears to be limited to the extent to which the proceedings relate to the issue of the exercise of a statutory power. Although the claim does involve a question of interpretation of subordinate legislation, the Court is also asked to make decisions on disputed factual matters.
[32] Further, the second declaration sought, as amended in counsel’s written submissions, is a declaration that the basis of value should not be the property’s zoning for each record of title but as a single rating unit used for pastoral farming with the potential for development at some future time. That does not fit within the framework of a proceeding for judicial review.
[33] That brings me back to whether the Court has inherent jurisdiction, as Mr Casey submits, to determine the claim.
[34]I am not entirely certain that that is the case.
[35] The High Court’s inherent jurisdiction, as preserved by s 12 of the Senior Courts Act 2016, is concerned with the proper and effective administration of justice. It includes all such powers as may be necessary towards this end, but does not extend to furthering the public interest generally.11
[36] In addition, where the matter is already the subject of targeted legislation, the exercise of inherent powers will be rare and must be in harmony.12 In the present case, r 2.4.1.2 of the Rules clearly prescribes the circumstances in which two or more records of title constitute a single rating unit. I am not persuaded the administration of justice requires this Court to invoke its inherent jurisdiction to supplement or give effect to this in any way.
[37] Even accepting that the Court does have jurisdiction, I am clearly of the view in any event that the matter should be referred back to the Tribunal for consideration of the objections for reasons that I address below.
Part consideration of the claim?
[38] The first declaration sought has two parts. Part one involves a legal issue as to what matters are to be taken into account in determining the likelihood that the records of title will be alienated as only one farming operation. The Council’s position is that valuation evidence is to be taken into account when determining likelihood. It says it is necessary to consider how the land will sell to achieve maximum value in order to assess the likelihood of sale as only one farming operation. Marsden’s position is that the rating unit must first be identified before it can be valued.
11 Siemer v Solicitor-General [2013] NZSC 68, [2013] 3 NZLR 441 at [114].
12 R v Moke [1996] 1 NZLR 263, (1995) 13 CRNZ 386 (CA) at 393.
[39] The second part of the first declaration would involve the Court deciding on the evidence before it whether, as a matter of fact, the 87 separate records of title constitute a single rating unit within r 4.2.1.2 of the Rules.
[40] Mr Harwood submitted the Court could deal with the first part of the first declaration sought and carry out a preliminary interpretation exercise.
[41] Mr Casey did not agree that the first declaration might be divided in the way submitted by Mr Harwood, due to the degree of interconnection between the two parts. I accept that submission.
[42] While there is a question of law involved, namely whether valuation evidence is to be taken into account in determining likelihood of alienation as only one farming operation, there are also issues of fact. I do not consider this Court should embark on a determination of factual issues without having the benefit of a decision from the Tribunal.13 It is within the jurisdiction of the Tribunal to address these mixed questions of fact and law.
Should the proceedings be dismissed or stayed?
[43] Mr Harwood was inclined to submit there would be no utility in entering a stay. He submitted there is no need to keep the proceeding alive given the matter will be referred back to the Tribunal, from where there are rights of appeal to this Court.
[44] Mr Casey submitted that there would be a number of procedural options in terms of the matter coming back before this Court. One of those is that a hearing in this Court might involve the present proceeding running together with any new proceeding or appeal.
[45] Although my view is that the Court does not have jurisdiction to hear the claim as it is presently framed (as set out in [34] to [36] above), given the limited argument on both this issue and as to whether there should be a stay or not, I am prepared to stay
13 See Cooke J in New Zealand Kiwifruit Growers Incorporated v Gisborne District Council [2021] NZHC 2198.
the proceeding under r 15.1(3) of the High Court Rules 2016 rather than dismissing it or striking it out.
Result
[46] The claim by the plaintiff, Marsden City Limited Partnership is stayed pending further order of the Court. The Court anticipates that the proceeding will be stayed at least until the decision of the Tribunal on the objections before it and possibly pending the outcome of an appeal to this Court, if any appeal were to be heard prior to and separately from this stayed proceeding.
Costs
[47] I did not hear from counsel on costs. Given the way in which the matter proceeded before me I indicate my view that this might well be a case where costs should lie where they fall. However, if the parties seek to be heard on costs and if agreement cannot be reached counsel may file and serve memoranda contemporaneously, within 15 working days of the date of this judgment. Memoranda should not exceed four pages.
[48] Given my direction that memoranda are to be filed contemporaneously I provide the opportunity for reply memoranda. Any such memoranda are to be limited to two pages and are to be filed and served within five days of service of the other party’s primary memorandum.
[49]I will determine costs on the papers.
Gordon J
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