Pacific 7 Limited v Tauranga City Council
[2025] NZHC 1233
•20 May 2025
IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY
I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE
CIV-2024-470-000208
[2025] NZHC 1233
BETWEEN PACIFIC 7 LIMITED
Applicant
AND
TAURANGA CITY COUNCIL
First Respondent
TUMBLEHOME BAY LIMITED
Second RespondentPACIFIC SAFE HARBOURS LIMITED
Third Respondent
Hearing: On the papers Counsel:
M S King and S P Connolly for Applicant
S V McKechnie and B S Clifford for First Respondent S D Campbell for Second and Third Respondent
Judgment:
20 May 2025
JUDGMENT OF ANDREW J
This judgment was delivered by me
on 20 May 2025 at 10.30 am, pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
PACIFIC 7 LTD v TAURANGA CITY COUNCIL [2025] NZHC 1233 [20 May 2025]
Introduction
[1] These are judicial review proceedings relating to the sale by the Tauranga City Council (TCC/the Council) of the Tauranga Marine Precinct (Marine Precinct/the Precinct). The second and third respondents, Tumblehome Bay Ltd (TBL) and Pacific Safe Harbours Ltd (PSHL) have purchased the Precinct and are to develop a superyacht re-fit facility on the site.
[2] In my decision of 11 April 2025,1 I dismissed the application by Pacific 7 Ltd (Pacific 7) for interim relief restraining the sale pending the substantive hearing.
[3] Pacific 7 now applies for leave to appeal my decision of 11 April 2025 to the Court of Appeal. Leave to appeal is required because that judgment was a decision made on an interlocutory application.2
[4] Pacific 7 has also applied for a stay of execution of my judgment of 11 April 2025. The amended application for stay is dated 6 May 2025.
[5] The impugned transactions have now settled. Settlement took place on 30 April 2025, and the related transfers and title registrations are now complete.
Procedural background
[6] On 21 November 2024, I granted interim orders under s 15(1) of the Judicial Review Procedure Act 2016, restraining the sale of the Precinct.3 Those orders were granted on a Pickwick basis. At very short notice, TCC elected not to oppose the interim orders, but on a temporary basis only.4
[7] Pacific 7’s initial application for interim relief (dated 21 November 2024) was heard on a de novo basis at a one-day hearing on 25 February 2025. That gave rise to my judgment of 11 April 2025, in which I dismissed the application.5
1 Pacific 7 Ltd v Tauranga City Council [2025] NZHC 876 at [2].
2 Senior Courts Act 2016, s 56(3).
3 Pacific 7 Ltd v Tauranga City Council HC Tauranga CIV-2024-470-208, 21 November 2024 (Interim Orders).
4 Pacific 7 Ltd v Tauranga City Council, above n 1, at [2].
5 Pacific 7 Ltd v Tauranga City Council, above n 1.
[8] Pacific 7 has made multiple attempts to stay settlement of the impugned transactions since that judgment:
(a)On 11 April 2025, following release of my judgment, Pacific 7 sought an interim stay of five working days to allow it a “reasonable opportunity to consider whether to seek leave to appeal” the judgment.6 I rejected that application on the basis that there were “no particular circumstances which mean that the applicant cannot consider an appeal, file, and seek a stay in the ordinary course.”7 In my minute, I reiterated my view that Pacific 7’s substantive judicial review claims are “weak”.8
(b)On 23 and 24 April 2025, Pacific 7 filed its applications for leave to appeal and for a stay of execution.
(c)On 30 April 2025, counsel for Pacific 7 sought, via email, confirmation from the TCC lawyers that settlement of the transaction would not occur prior to the stay application of 24 April 2025 being determined. TCC’s lawyers responded that they were not prepared to give the confirmation sought and that, given that no stay was in place, TCC was legally and contractually obligated to settle that day.
(d)Shortly after that and on the same day, settlement of the transaction was completed. Around the same time, Pacific 7 sought an urgent interim stay from this Court pending determination of its leave application. I then convened an urgent judicial telephone conference to discuss the application. At that conference, TCC advised that settlement was essentially complete. In my minute of 1 May 2025, I declined the urgent application, finding that it was not in the interests of justice to grant the application.9 I further stated it was incumbent on Pacific 7 to
6 TCC responded that it would abide the decision of the court and TBL and PSHL opposed the application.
7 Pacific 7 Ltd v Tauranga City Council HC Tauranga CIV-2024-470-000208, 15 April 2025 (Minute of Andrew J dated 15 April 2025) at [3] and [6].
8 At [5].
9 Pacific 7 Ltd v Tauranga City Council HC Tauranga CIV-2024-470-000208, 1 May 2025 (Minute of Andrew J dated 1 May 2025) at [10].
make queries as to the timing of the settlement and that given that interim orders were absent, the respondents, as commercial parties entering into a commercial contract, were entitled, and in fact legally required, to proceed with the settlement.10
(e)On 2 May 2025, I convened a further judicial telephone conference to address the interlocutory applications. Pacific 7 confirmed that it still wished to pursue both applications despite the transaction having settled. In a subsequent minute, and given that settlement had occurred, I made timetabling orders for Pacific 7 to file an amended stay application.11
(f)On 6 May 2025, Pacific 7 filed its amended stay application, seeking a stay of execution of my judgment of 11 April 2025 and/or interim orders prohibiting the respondents from taking further steps considered to be “consequential on the exercise of the first respondent’s decision” to sell the Marine Precinct.
Relevant legal principles — leave to appeal
[9] The requirement for leave to appeal under s 56(3) of the Senior Courts Act 2016 is intended to serve as a “filtering mechanism” to ensure that appeals of interlocutory orders do not unnecessarily delay the proceedings in which the orders were made.12 The wider purpose of s 56(3) is to lessen tactical delays and enhance the efficiency of the administration of justice.13
[10] The following considerations are relevant on an application for leave to appeal:14
10 At [6] and [10].
11 Pacific 7 Ltd v Tauranga City Council HC Tauranga CIV-2024-470-000208, 2 May 2025 (Minute of Andrew J dated 2 May 2025) at [5]. At [4] of that minute, I also recorded the position of the respondents that “Any appeal is now moot and there is no utility in the proceedings continuing”.
12 Greendrake v The District Court of New Zealand [2020] NZCA 122 at [6], endorsing Finewood Upholstery v Vaughan [2017] NZHC 1679 at [13].
13 Li v Chief Executive, Ministry of Business, Innovation and Employment [2018] NZHC 1171, [2018] NZAR 1134 at [20].
14 Greendrake v The District Court of New Zealand, above n 12, at [6].
(a)a high threshold exists;
(b)the applicant must identify an arguable error of law or fact;
(c)the alleged error should be of general or public importance warranting determination or otherwise be of sufficient importance to the applicant to outweigh the lack of general or precedential value;
(d)the circumstances must warrant incurring further delay; and
(e)the ultimate question is whether the interests of justice are served by granting leave.
[11] In Jindal v Kamal, the Court of Appeal held that leave to appeal should be granted only where the significance or implication of an arguable error of fact or law, either for the particular case or for the applicant or as a matter of precedent, warrants the further delay which the appeal process would involve.15
Analysis and decision
Application for leave to appeal
[12]Pacific 7 contends that I made the following errors of fact and law:
(a)When considering the merits of the judicial review, I failed to consider certain of the pleaded review grounds, including:
(i)TCC’s failure to comply with its obligation under s 77 of the Local Government Act 2002 (LGA) to seek and identify and assess the advantages and disadvantages of all reasonably practicable options for potential private ownership; and
15 Jindal v Kamal [2024] NZCA 423 at [28]. See also A v Minister of Internal Affairs [2017] NZHC 887, cited in Finewood Upholstery v Vaughan, above n 12, at [9].
(ii)TCC’s failure to consider whether its decision to sell the Marine Precinct to TBL and PSHL was based on incorrect and/or misleading advice.
(b)I made an error of fact when I said that the lease-back provision in the Development Agreement applied to Bridge Wharf as well as Cross Road Wharf.
[13]Pacific 7 further says:
(a)The overall interests of justice and balance of convenience favour the granting of a stay and/or interim orders. The interim relief can be tailored to allow aspects of the transaction and the operation of the Marine Precinct business to continue;
(b)There is a significant public interest in the subject transaction and this proceeding. They have been brought not only for the applicant’s benefit but for the benefit of other Marine Precinct users and a significant section of the Tauranga marine industry.
Alleged errors of fact and law
[14] I accept that, in my judgment, I did not specifically or directly address each of the causes of action, or the various matters pleaded in respect of each, individually. I also accept that I did not specifically refer to the alleged failure by TCC to comply with its obligations to seek to identify and assess the advantages and disadvantages of all reasonable, practicable options for potential private ownership under s 77 of the LGA.
[15] However, it is important to note that the Court has a wide discretion when considering the merits of an applicant’s case at an interim stage.16 At the interlocutory stage, the Court’s task is simply to consider whether the applicant has a reasonable
16 McGechan on Procedure (online ed, Thomson Reuters) at [JR15.05(1)]; see also Minister of Fisheries v Antons Trawling Co Ltd [2007] NZSC 101 at [3], citing Carlton & United Breweries v Minister of Customs [1986] 1 NZLR 423 (CA) at 430.
prospect of success on the substantive matters. That means that a detailed discussion of the merits of the application is not required.17
[16] In my judgment on the merits, I commenced my assessment by noting that all five causes of action in the statement of claim are directed at the Council’s compliance with its statutory obligations under Part 6 of the LGA.18 Pacific 7’s allegation of a failure by TCC to identify all reasonable, practical options “for potential private ownership of the Marine Precinct” was just one of the contraventions of the LGA alleged in the second cause of action.
[17] Section 77 requires a council, in the course of its decision-making, to identify and assess reasonably practicable options. While I might have been in error in not referring specifically to s 77 directly, I noted that the Council had been “presented [with] a raft of possible options for the ownership and operation of the Marine Precinct”,19 including the option ultimately decided upon,20 and the alternative of sale via “an open market process.” I concluded that “TCC has a strong case for establishing that it had a good understanding of its consultative and decision-making obligations under the LGA.”21 In substance, I did address the s 77 allegation and it is difficult to see that any alleged error was a material one.
[18] I agree with the submission of TCC that further analysis by me was not required for the purposes of a preliminary assessment of the strength of Pacific 7’s claims.
[19] As to the alleged failure by me to consider whether TCC’s decision was based on incorrect and/or misleading advice, I am of the view that my judgment essentially deals with this issue by my concluding that, in substance, Pacific 7 was challenging the merits of TCC’s decision. In particular, I noted Ms Christine Jones’ (TCC witness)
17 Criminal Bar Association of New Zealand Inc v Attorney-General [2012] NZHC 400 at [21], cited in Wallace v Pedersen [2022] NZHC 1299 at [10].
18 Pacific 7 Ltd v Tauranga City Council, above n 1, at [144].
19 At [150(d)].
20 At [150(e)].
21 At [149].
comprehensive affidavit and the substantial documentation that supported the Council’s decision-making.22
[20] In order to succeed in a judicial review proceeding of this kind, the applicant, Pacific 7, needs to establish an arguable and material error of law. In relation to the allegation of incorrect and misleading advice, Pacific 7 will need to establish that there was no probative evidence to support the TCC decision or that it was irrational.23 It is difficult to see that that threshold is made out, even if it is established that some incorrect information was provided by the TCC officers to the Council.
[21] Pacific 7 further argues that while Council staff may exercise a degree of judgement about which options to be put before the Council, they cannot assess whether an option is “reasonably practicable” for themselves. Pacific 7 submits that the role of Council staff is to place TCC in a position to discharge its statutory obligations and the Council staff cannot discharge those obligations. In principle, Pacific 7 may well be correct, but on the facts here it is difficult to see that there was any unlawful sub-delegation that the Court of Appeal cautioned against in Thorndon Quay Collective Inc v Wellington City Council.24 Furthermore, the affidavit of Ms Jones attached the record of the Council’s decision and that is the basis upon which Pacific 7’s substantive claim should be determined.
[22] I accept that my finding at [75] of my judgment relating to the Bridge and Cross Road wharves may well have been a factual error. Again, however, it is difficult to see, especially in the context of a judicial review proceeding, that this was an error of a material kind. The lease-back provision was but one factor in my assessment of the overall interests of justice and I did expressly state at [120] that the lease-back was for only part of the land to preserve access for black boats to load and unload, re-fuel and use ice facilities over a three-year period. Likewise, there appears to be no challenge to my acknowledgment at [137] that the Development Agreement allows use of the Precinct by the black boats for at least the next three years.
22 At [147]–[148].
23 Hu v Immigration & Protection Tribunal [2017] NZHC 41, [2017] NZAR 508 at [28]–[31].
24 Thorndon Quay Collective Inc v Wellington City Council [2024] NZCA 316, [2024] 3 NZLR 361 at [63]–[66].
[23] In viewing these matters overall, I am not persuaded that the grounds of the proposed appeal have any real merit.
General or public importance
[24] The appellate courts have, in a number of recent decisions, addressed the obligations of local authorities under Part 6 of the LGA, including s 77.25 Even if the alleged errors of fact or law are made out, it is difficult to see that they are of general or public importance or otherwise of sufficient importance to grant the application for leave.
Interests of justice
[25] The impugned transactions have now settled. There is a new registered proprietor of the Precinct who holds an indefeasible title. There is therefore little utility in appealing the judgment and the relief sought in the substantive proceedings has essentially been rendered futile. Even if the Court does have power to quash a contract after it is settled, it is likely that a high threshold is required.
[26] I accept that there is some public interest in the subject transaction and these proceedings. I also accept that the issues raised are important to Pacific 7 and some of the other users of the Marine Precinct. However, there is little evidence to suggest that the public interest is significant and, on the limited evidence available to me, there does seem to be a range of views about the public benefit of the transactions. Pacific 7 did, of course, have the opportunity to air these issues in a fulsome one-day hearing, in which it filed substantial evidence.
[27] I also note there will be significant cost arising from further delay (should the leave application be granted). I further note the submission of TCC that delay and uncertainty as to the development of the Marine Precinct and other wharf structures (i.e. Fisherman’s Wharf) will be detrimental to Marine Precinct users and the wider community. The wharf structures are in need of upgrades, for which TBL/PHSL and
25 See for example Thorndon Quay Collective Inc v Wellington City Council, above n 24, at [27]–[33]. See also Wellington City Council v Minotaur Custodians Ltd [2017] NZCA 302, [2017] 3 NZLR 464 at [36].
TCC are contractually required to undertake. There is obviously also the public interest in proceeding with development of new and upgraded wharves for the benefit of stakeholders and the wider marine industry in Tauranga.
[28] Viewing matters overall, I find that it is not in the interests of justice to grant the application for leave to appeal.
[29] For all these reasons, I conclude that the application for leave to appeal should be dismissed.
Application for stay of execution and/or interim orders
[30] In its amended interlocutory application for stay order/interim orders dated 6 May 2025, Pacific 7 seeks the following orders:
(a)An order for stay of enforcement of my judgment of 11 April 2025 dismissing the application for interim relief; and/or
(b)Interim orders prohibiting the respondents from taking further steps of the type listed in the Appendix to the application, being steps that are consequential on the exercise of TCC’s decision purporting to sell the Marine Precinct and/or the businesses carried out at the Marine Precinct.26
[31] Pacific 7 contends that it is not too late to grant either a stay of execution and/or a further interim order. It accepts that settlement has now occurred, but submits that that step simply involved payment of the purchase price and transfer of legal title to the relevant Precinct land parcels and the acquisition of the Vessel Works business. It further submits that what is more relevant now is what the settlement allows the second and third respondents to do.
26 The activities listed in the Appendix include the entry into contracts or other binding arrangements with third parties in relation to the design, planning, construction and operation of the Marine Precinct. The Appendix also refers to the entry into leases or licences, the entry into permanent employment agreements and the entering into third party contracts with suppliers in relation to the Vessel Works business.
[32] Pacific 7 contends that prohibiting the respondents from taking the specified steps set out in the Appendix to its amended application for the short period specified should not unduly prejudice the respondents. It notes that preliminary steps, including negotiation of terms of contracts, can still be taken while the interim orders sought are in place. Pacific 7 argues that the form of the orders sought strike an appropriate balance between the parties.
[33] I have, of course, already determined above that the application for leave to appeal to the Court of Appeal should be dismissed. That is the first factor of relevance in determining whether or not to grant the stay of execution/further interim orders sought.
[34] In my above assessment, I have again concluded, in substance, that the merits of the applicant’s legal case (bearing in mind they must establish material errors of law) is a relatively weak one. I accept there is a position to preserve, but it is not a strong one.
[35] The amended stay application now in front of me is effectively an attempt to re-litigate issues already canvassed and determined at the hearing of the initial interim relief application. I note that this is the third attempt by Pacific 7 to seek a stay and its second attempt to seek interim relief. All previous applications have failed.
[36] It may be that the prejudice the respondents say will be incurred if interim orders are granted is not as great as they contend, but I accept that the terms of the orders sought are quite extensive and would affect TCC’s and second and third respondents’ ability to perform their contractual responsibilities. It is also of concern that a stay/interim relief might well prevent the respondents from progressing development of the Precinct and fishing wharves under the Development Agreement. I note the wharves are nearing the end of their life and require upgrade.
[37] I accept that Pacific 7 may have been under a genuine misapprehension as to when the transactions were to settle. However, it must take some responsibility for failing to seek a stay of execution much earlier than they did. The transactions at issue are commercial ones and given that, and the lengthy history of the matter, it should
have been anticipated that the parties would move promptly once I rescinded the original interim order.
[38] In weighing these matters overall, I am not satisfied that it is in the interests of justice to grant either a stay of execution and/or a further interim order. My assessment turns substantially on my view of the overall merits of Pacific 7’s claims and my conclusion that the prospects of success on appeal are very limited.
[39] I find that the application for a stay of execution and/or further interim order (as sought on the amended application of 6 May 2025) is to be declined.
Result
[40]The application for leave to appeal to the Court of Appeal is declined.
[41]The amended application dated 6 May 2025 for stay/interim orders is declined.
[42] I grant the amended confidentiality orders sought at [4]–[6] of the memorandum of counsel for the applicant dated 16 May 2025.27
[43]I decline to make any further orders.28
Costs
[44] As to costs, I am of the preliminary view that, having succeeded in opposing the present applications, the respondents are entitled to costs on a 2B basis plus disbursements. If costs cannot be agreed, then submissions (no more than five pages) are to be filed and served in accordance with the timetable set out below.
[45] I note the submission of the applicant, Pacific 7 (in its memorandum dated 16 May 2025) contending that the respondents have failed to file costs submissions in relation to my judgment of 11 April 2025 and that the deadline imposed has now
27 i.e. the affidavit of Mr Samuel Rofe (with dollar amounts redacted) may be provided to the applicant on the basis that it is prevented from disclosing the affidavit or its contents to any person other than its legal advisers.
28 See Minute of Andrew J dated 2 May 2025 at [6].
passed. I will take that submission into account in my assessment of the overall costs position.
[46] I intend to deal with the position of all costs issues in a subsequent costs judgment to be dealt with on the papers and in accordance with the following timetable:
(a)The respondents are to file and serve their submissions on costs (in relation to all matters) by 5 pm on 23 June 2025.
(b)The applicant, Pacific 7, is to file and serve its submissions on costs by
5 pm on 9 July 2025.
Andrew J
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