Pascoe v Minister of Land Information
[2022] NZHC 3173
•30 November 2022
IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY
I TE KŌTI MATUA O AOTEAROA NGĀMOTU ROHE
CIV-2021-443-000048
[2022] NZHC 3173
UNDER THE Judicial Review Procedure Act 2016 IN THE MATTER OF
The Public Works Act 1981 (the Act) and a second notice of intention to take land from TJS and DA Pascoe
BETWEEN
TONY JAMES SOFUS PASCOE AND DEBBIE ANN PASCOE
Applicants
AND
MINISTER OF LAND INFORMATION
Respondent
Hearing: 28 September 2022 (VMR) Appearances:
Mr and Mrs Pascoe in person
R L Roff and M C McCarthy for Respondent
Judgment:
30 November 2022
JUDGMENT OF GRICE J
(Preliminary Determination)
Introduction
[1] Mr and Mrs Pascoe (the Pascoes)1 own land in the Mangapepeke Valley. Waka Kotahi NZ Transport Agency (Waka Kotahi) seeks to acquire various interests in the Pascoes’ land for the Te Ara o Te Ata: Mt Messenger Bypass Project (the Project). The Project involves the construction of a 5.2 kilometre bypass route east of State Highway 3, the highway connection between Taranaki and the Waikato. It is
1 The Pascoes had the assistance at the VMR hearing of Ms Marie Gibbs.
PASCOE v MINISTER OF LAND INFORMATION [2022] NZHC 3173 [30 November 2022]
part of a wider package of improvements to State Highway 3. Waka Kotahi has obtained the required designations and resource consents for the Project.
[2] The Crown has been negotiating with the Pascoes since 2016 to acquire part of their land for the proposed highway and purposes related to it. Some of the land is to be acquired permanently and some leased for use during the construction period.
[3] Of the 155-hectare property owned by the Pascoes the Crown is seeking to acquire:
(a)11.1715 hectares freehold interest; and
(b)12.4782 hectares and 0.2707 hectares of land in which the Minister proposes to take leasehold interest for the period of construction.
[4] Negotiations to date between the Crown and the Pascoes have not resulted in an agreement for sale and purchase. The Public Works Act 1981 (the Act) allows the Crown to compulsorily acquire land. It sets out the statutory processes for land acquisition for the purposes of Government works, including roading. The Crown now seeks to take the land compulsorily and has issued a statutory notice of intention to take the land under s 23 of the Act (the s 23 notice).
[5] The Pascoes have initiated judicial review proceedings in response, seeking, among other things, the revocation of the s 23 notice.
Questions for determination
[6] The grounds for review raise issues relating to the lawfulness of actions taken under the statutory provisions by the Minister to date. These involve questions of law suitable for preliminary determination by the Court. Those questions are:2
(a)Is s 18(1)(d) of the Public Works Act 1981 complied with if the relevant negotiations with the land owner are undertaken by an entity accredited
2 Minute of Ellis J, 29 April 2022, at [8].
by Land Information New Zealand as a Crown Property Accredited Supplier (such as TPG) rather than the Minister or his delegate, provided it is the Minister or his delegate who exercises the ultimate power to enter into an agreement to acquire or proceed to take the land?
(b)If not, does that affect the legality of the s 23 notice subsequently issued by the Minister?
(c)Is the Minister permitted to exclude cls 4, 5, 6, 10, 11 and 12 of Part 2 of Schedule 3 and cl 13 of Part 3 of Schedule 3 of the Property Law Act 2007 from the proposed lease (including in accordance with ss 217 and 279(2) of the Property Law Act and Part 2 of the Public Works Act)?
First preliminary question
[7] It is common ground that before the Minister can undertake further steps in the process to take the land the provisions set out in s 18(1)(a)–(d) of the Act must be satisfied. Those provisions relate to the service and lodging of notices to acquire land, the invitation to the owner to sell the land at a supplied valuation and the making of every endeavour to negotiate in good faith with the owner in an attempt to reach an agreement for the acquisition of the land.
[8] It is the requirement to endeavour to negotiate in good faith set out at s 18(1)(d) which is relevant to the first and second preliminary questions. It is common ground that the Minister cannot take the next step to take the land unless the s 18(1) provisions are satisfied. The next step is the issue under s 23 of a notice of intention to take land, which is the subject of the judicial review application.
[9] Beyond this point, if a notice under s 23 has been lawfully issued, a land owner can nevertheless object to the taking of land to the Environment Court.3 The Environment Court must then inquire into the objection and the intended taking and must conduct a hearing.4 Ultimately, if the process is followed and any objection dealt
3 Public Works Act 1981, s 23(3).
4 Section 24(3).
with, the Minister may recommend the Governor-General issue a proclamation taking the land, which the Governor-General may then do if they think fit.5
[10] Before making the recommendation to the Governor-General, the Minister must also be of the opinion that the land should be taken and that no private injury will be done for which due compensation is not provided for in the Act.6 Compensation entitlements are set out later in the Act.7
[11] The Pascoes say that the Minister in person (or else a formally appointed delegate) must undertake the “endeavour[s] to negotiate in good faith” required under s 18(d). No one else can undertake any of the tasks required.
[12] It is common ground that the Minister may delegate various functions and powers under the Act.8 In this case, Toitū Te Whenua | Land Information New Zealand (LINZ), which is the Minister’s department under the Act, has given the task of negotiating with the Pascoes to The Property Group (TPG). It is an accredited supplier of various services to LINZ. In effect, TPG contracts with LINZ to provide operational services related to land acquisition, including engaging in discussions with the owners of land with a view to reaching agreements for the sale and purchase of land.
[13] The Pascoes say that TPG has no delegated authority to negotiate with them for the purposes of meeting the requirements of s 18(1)(d) of the Act. They say that it is the Minister or a formal delegate who must undertake all the tasks associated with that endeavour.
[14] The Pascoes say that one of the properly appointed delegates is Mr Trevor Knowles, a manager employed by LINZ. Mr Knowles is experienced in property works and land acquisitions and has been involved in issues relating to the Project for more than five years. He has a good knowledge of the land acquisition issues as they relate to the Pascoes’ land. Mr Knowles is entitled to exercise functions
5 Section 26(1)(b) and (2).
6 Section 26(1).
7 Sections 60–63.
8 Section 4C provides for the Minister to delegate various powers under the Public Works Act. Schedule 6 cls 2 and 5 of the Public Service Act 2020 allow for delegation and sub-delegation of powers delegated to the Minister under any Act.
under s 18(1)(d) as a delegate.9 The Pascoes say that should have been him (or another delegate) who carried out the negotiations with them, but he has refused to do so.
[15] The provisions of s18(1) of the Act must be satisfied before the Minister can move to acquire land under the Act. Insofar as relevant this provides:
18 Prior negotiations required for acquisition of land for essential works
(1)Where any land is required for any public work the Minister or local authority, as the case may be, shall, before proceeding to take the land under this Act—
(a)serve notice of his or its desire to acquire the land on every person having a registered interest in the land; and
(b)lodge a notice of desire to acquire the land with the Registrar- General of Land who shall register it, without fee, against the record of title affected; and
(c)invite the owner to sell the land to him or it, and, following a valuation carried out by a registered valuer, advise the owner of the estimated amount of compensation to which he would be entitled under this Act or the betterment that he may be liable to pay; and
(d)make every endeavour to negotiate in good faith with the owner in an attempt to reach an agreement for the acquisition of the land.
(2)If, after a period of 3 months,—
(a)the owner fails to respond to any invitation issued under subsection (1); or
(b)the owner refuses to negotiate with the Minister or the local authority, as the case may be; or
(c)an agreement for the sale and purchase of the land is not made with the owner under section 17,—
the Minister or local authority may, within 1 year after notifying the owner under subsection (1), proceed to take the land under this Act.
9 Affidavit of Mr Trevor Knowles, 8 July 2022, at [10].
The Pascoes’ position
[16] The Pascoes point to the following arguments in support of their contention that it must be a Minister or their delegate who must undertake all the tasks involved to satisfy s 18(1)(d):
(a)The plain wording of s 18(1)(d), which says “the Minister … shall …
(d) make every endeavour to negotiate in good faith with the owner in an attempt to reach an agreement for the acquisition of the land.”
(b)There has been no proper delegation or sub-delegation to TPG by the Minister or LINZ staff. TPG is therefore not authorised to undertake any task associated with s 18(1)(d), and in particular it is not authorised to negotiate with the Pascoes in satisfaction of the requirements of s 18(1)(d).
(c)Section 18(1)(d) must be interpreted in isolation. It cannot be taken in the context of the functions or statutory powers of the Minister under ss 17 or 23.
(d)Negotiation involves bargaining and attempting to reach agreement, which is a function. “Functions” may be delegated by the Minister under s 4C(4) of the Act, and therefore it follows that functions cannot be exercised by anyone other than the delegate or the Minister. There is no room for operational matters such as “legwork, information gathering and valuations” (as LINZ described TPG’s involvement) to be carried out by a third party, in this case TPG.
(e)There can be no further sub-delegations in any event.
(f)An accredited supplier to LINZ cannot bind LINZ:
(i)A pamphlet issued by LINZ in May 2017 entitled “Landowner’s rights: When the Crown requires your land for a public work” describes the accredited supplier’s role as the following:10
Accredited supplier’s role
Where the Crown requires your land for a public work, a LINZ accredited supplier is engaged to carry out the negotiations.
· The accredited supplier will negotiate the purchase of the land with you the landowner;
· The accredited supplier will ensure that the compensation negotiated is “fair” both to you, the landowner, and the Crown.
(ii)There is a disclaimer in that pamphlet stating that LINZ is “excluded from any liability resulting directly or indirectly from the contents of this publication” and that landowners should refer to the full text of the Act under which the land is to be taken and seek their own legal and expert advice.
(iii)The conditions imposed by the Crown on accredited suppliers prohibit the supplier from holding itself out to any third party that the supplier is entitled to exercise any statutory functions.11
(g)Mr Knowles, for LINZ, had confirmed that accredited suppliers “have no basis in statute or regulations”.12
The Crown’s position
[17] The Crown does not contend there was a delegation to TPG. It accepts that the only delegates were those listed in the delegation documents produced, including a delegation to Mr Knowles in relation to s 18(1)(d).
10 Toitū Te Whenua | Land Information New Zealand “Landowner’s rights: When the Crown requires your land for a public work” (May 2017) at 4–5.
11 Crown Property Regulatory “Conditions of Crown Property Accreditation” at [4(q)].
12 Affidavit of Mr Tony Pascoe, 10 June 2022, at [22].
[18] The Crown says that LINZ staff who have the delegations under s 18(1)(d) were entitled to use TPG staff to undertake the legwork, to collate information and to engage in negotiations. The statutory requirement is for the Minister or delegate to be satisfied that every endeavour has been made, not to personally take every step in negotiations. It is accepted the s 18(1)(d) requirement had to be fulfilled before the Minister could take the next step in the process to take land under the Act.
[19] LINZ points to the fact that it receives 2,000 requests each year for acquisition of land under the Act, disposal of land under the Act and processing rights of first refusal under settled te Tiriti o Waitangi | Treaty of Waitangi claims as well as miscellaneous tasks such as processing road legalisation actions for Crown agencies and local authorities under the Act.
[20] The process requires the appointment of accredited suppliers who have the expertise in negotiations and in areas such as valuation and collating information, such as copies of titles and details of the land acquired. Mr Knowles and his team provide quality assurance of the accredited suppliers’ work and exercise the statutory functions and decision-making in relation to the land acquisitions and disposals.
[21] The process involved includes the production of documents by the accredited supplier setting out all the information and reports, including chronologies of negotiations and contacts with the owners and relevant persons. When the accredited supplier recommends the issue of a statutory notice, a full report is provided by the accredited supplier, containing copies of relevant information, including the chronology of all negotiations and interactions with the land owner, draft notices, a land requirement plan showing the land to be acquired, an aerial photograph, and a map showing the proposed use of the land.13 The material provided is reviewed by a member of the clearances team, who undertakes quality assurance checks.
[22] It is the Minister, however, who must make the decision to issue a s 23 notice of intention to take the land for a public work. The issue of that notice cannot be delegated. A report relating to a s 23 notice includes a draft briefing to the Minister which has been checked. Such a report also includes detailed information and updates
13 Affidavit of Mr Knowles, 8 July 2022, at [15].
as well as a survey and plan, as required under s 23(1)(a). One matter to be considered by the team member reviewing the s 23 report is whether there is evidence of the endeavours to negotiate required by s 18(1)(d). The Crown says that TPG was entitled to carry out the operational tasks as long as LINZ itself was satisfied that every endeavour had been made under s 18(1)(d).
[23] The Crown produced the briefing paper prepared by LINZ for the Minister on the notice of intention to take land and leasehold estate in relation to the Pascoes’ land dated 12 July 2021, on which the Minister relied to make the decision to issue the s 23 notice.14 The briefing paper covered the issue of the negotiations as follows:15
LINZ consider the requirement to negotiate in good faith for a period of three months has been satisfied. The Crown has been seeking to negotiate with the Owners for the acquisition of the required land and lease since 2017 and, since service of the notice of desire to acquire 11 months ago, the Owners have not been willing to negotiate to reach agreement for the acquisition of the Land and Lease under the Public Works Act 1981 (PWA).
[24]LINZ then gave the Minister the following assurance:16
LINZ consider the requirement to make every endeavour to negotiate in good faith to attempt to reach an agreement for a period of three months has been satisfied. The Crown has been seeking to negotiate with the Owners for the acquisition of the Land and Lease since 2018 and, since service of the notice of desire to acquire 11 months ago, the Owners have refused to meaningfully engage and an agreement for the sale and purchase of the Land and Lease has not been made. Where this occurs the Minister may, within 1 year of the notice of desire, proceed to take the Land and Lease. The notice of desire to acquire was served on 31 August 2020. It is now necessary to service a notice of intention to take the Land and Lease to ensure the Project can progress …
[25] The paper referred to Mr Knowles as being the LINZ contact and was signed for LINZ by the Group Manager, Land and Property, Wellington.17
14 Toitū Te Whenua | Land Information New Zealand “BRF 21-412 Briefing on Notice of Intention to Take Land and Leasehold Estate in Land for the Functioning Indirectly of a Road: TJS & DA Pascoe” to Minister for Land Information (12 July 2021).
15 At 2.
16 At 7.
17 At 1 and 3.
Analysis on s 18(1)(d)
[26] The usual approach to statutory interpretation applies here, namely that the meaning of the provision must be ascertained from its text and in the light of its purpose and its context.18 In a decision of this Court concerning the compulsory acquisition of land by the local authority, Dobson J noted that, in a case of compulsory acquisition of land:19
… Parliament can be taken to have appreciated that the limits on the power to override rights of private ownership of land will be carefully defined because of the adverse consequences for the private land owner.
[27] It is well-established that Ministers are entitled to rely on the work of officials. The Minister must turn their mind to the material and have informed themselves of the salient material facts if they intend to rely on the advice and recommendations of staff in relation to decisions or matters which they are required by statute to carry out.
[28] Recently, in the decision of Borrowdale v Director-General of Health, the Court of Appeal considered whether, during the COVID-19 lockdown period, the Director-General of Health had unlawfully delegated his powers to determine what were “essential businesses” for the purposes of a health order imposed under statutory authority.20 Under s 70(1)(m) of the Health Act 1956, the Director-General was permitted to require “all premises … of any stated kind” to be closed for the purpose of preventing an outbreak or spread of any infectious diseases. The approach the Director-General took in this respect was to issue orders which included exemptions from closure of “essential businesses”.21
[29] The Director-General gave evidence that to the best of his recollection he had reviewed a draft list of “essential businesses” prepared by senior officials in various government departments.22 The list of essential businesses was put on a website and changes were made to the list of businesses on that website from time to time.23 That
18 Legislation Act 2019, s 10(1); and see Commerce Commission v Fonterra Co-operative Group Limited [2007] NZSC 36, [2007] 3 NZLR 767 at [22].
19 Commercial Properties Ltd v Hutt City Council [2019] NZHC 2243, [2020] NZRMA 322 at [48].
20 Borrowdale v Director General of Health [2021] NZCA 520. [2022] 2NZLR 356.
21 At [6].
22 At [58] and [60].
23 At [65]–[66].
list was reviewed and the Director-General said he satisfied himself that “the MBIE decision making process and criteria for recognising essential businesses remain[ed] fit for purpose”.24 Dr Borrowdale argued that the Director-General had delegated the decision-making on what businesses were “essential businesses” to officials at MBIE and other departments.25 This offended the maxim delegatus non potest delegare — a person vested with a statutory power must exercise that power personally and not sub-delegate that power to another person.26
[30] The Court of Appeal noted that the task of compiling the schedule of essential businesses was “a mammoth undertaking” and it was not surprising that the preparation and review of the schedule of essential businesses needed to be done by a team of suitably qualified people from across the public sector.27 The Court then went on to note that the Ministry of Health had completed a review of the work done by the team on the schedule of essential businesses and the Director General had satisfied himself that at that point the work done was “fit for purpose”.28 There was no evidence that directly addressed whether the Director General had himself reviewed the list of essential businesses during a specific period.29
[31]The Court of Appeal went on to discuss the power of sub-delegation and noted:
[177] A valid sub-delegation of powers should not, however, be conflated with situations where the law considers there to have been no sub-delegation at all. Two such situations have been recognised in the law. First, Ministers and other public officials are frequently asked to make decisions based upon recommendations that have been prepared by other officials. The Minister or public official who reads an executive summary and ticks the recommendation:30
… has neither delegated nor failed personally to take relevant considerations into account, if he or she in fact read and considered the department’s summary, and if that summary contained all the salient material facts, however briefly.
24 At [75].
25 At [164].
26 At [164].
27 At [167].
28 At [168(a)].
29 At [169].
30 Mark Aronson, Matthew Groves and Greg Weeks Judicial Review of Administrative Action and Government Liability (6th ed, Law Book Co, Sydney, 2017) at [6.80], citing Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24, (1986) 66 ALR 299 (HCA); and Sita Queensland Pty Ltd v Beattie [2000] 2 Qd R 433 (QSC) at 438–439.
[178] Second, there is the Carltona agency principle.31 This holds that statutory powers may be exercised by departmental agents, and the agent’s acts will be deemed to be the acts of the power-holder on the basis that “[t]he agent is the principal’s ghost writer”. Although the Carltona agency principle normally applies to the powers given to Ministers, it may also apply “to office-holders within the public service structure [who are] accountable to Ministers”.32
[32] The approach of the Director-General was found to be appropriate. In relation to whether the Director-General had delegated his statutory authority to issue the order, the Court of Appeal found that (a) the Director-General had turned his mind to the draft list of essential businesses when he considered and agreed to that draft list, and that (b) even if his consideration of that draft list was not sufficient to have retained control over the decision, any deficiencies in his decision-making at that stage were later remedied.33
[33] The Court of Appeal stated the Director-General was entitled to rely on the advice prepared by his officials, and the fact that others, including Cabinet Ministers, also agreed to the list did not detract from the fact the Director-General retained control over the decision.34 The Director-General exercised that control when he adopted the recommendations of other officials in issuing the order.35
[34] The Court of Appeal’s comments in R v Thompson are to similar effect.36 In that case, s 13A(3) of the Evidence Act 1908 provided that where an undercover police officer was to be called as a witness for the prosecution, the Commissioner of Police was required to provide a certificate setting out any offences for which the undercover police officer had been convicted. In that case, the certificates had been signed by the Deputy Commissioner under delegated authority. The Commissioner had a system in place for the preparation of such certificates based on the senior sergeant making the enquiries, and had therefore made no enquiries himself but rather assumed that everything necessary had been done and signed the certificate. The Court held that
31 Carltona Ltd v Commissioners of Works [1943] 2 All ER 560 (CA).
32 Aronson, Groves and Weeks, above n 30, at [6.130] and [6.140], citing Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2013] NZCA 53, [2013] 2 NZLR 679 at [58].
33 Borrowdale, above n 19, at [185].
34 At [186].
35 At [186].
36 R v Thompson [1990] 2 NZLR 16 (CA).
the senior sergeant was the “gleaner of the required information”, who in turn relied on records made by others.37 The Court said:38
… this is not a case of the delegated exercise by the Commissioner of a discretion or a power. He is required to certify certain facts. He has done so. How he arrives at those facts is a matter for him to determine in keeping with the responsibility reposed in him by the statute. We see no element of his blindly rubber-stamping any such certificate. That would be so if he had a stock of such certificates prepared in advance for his signature without further inquiry. But such is not the case. Each inquiry starts with a statement by the particular undercover police officer which is then checked by the senior sergeant or detective senior sergeant in charge of Special Programmes against the Wanganui Computer record of criminal and traffic offences and against the officer's personal file.
This is not a case in which there was a delegation or a devolution of power as by a Minister of State to responsible officers of the department. As Lord Greene MR said in Carltona Ltd v Commissioners of Works [1943] 2 All ER 560 at p 563:
“It cannot be supposed that this regulation meant that, in each case, the minister in person should direct his mind to the matter.”
[35] The Court distinguished the situation in Thompson from the principle articulated in the High Court of Australia decision O’Reilly v Commissioners of the State Bank of Victoria, namely that the powers conferred on a public officer (in that case the Commissioner of Taxation) may be exercised by them or their delegate not only personally but also through a properly authorised officer.39 The Court of Appeal in Thompson did not consider that principle applied. As the Court stated:40
We do not apply that principle to this case. This legislation singles out the Commissioner of Police as opposed to any lower ranked officer to perform a particular function. By s 13A(3), to certify certain facts and by s 13A(4) to certify to certain other facts within his knowledge. In both cases he is personally responsible for making any such certificate but that does not in our view require him to personally search official and other records for the required information. That task is surely one he can impose on a responsible subordinate. In this way he derives the required facts for the purposes of subs (3) and the required knowledge for the purposes of subs (4). The Commissioner has brought his mind to bear in keeping with the statutory responsibility imposed on him by setting up a system to provide him with the required information. Just as he can, because of the known ability of his subordinate, rely on the accuracy of the certificate prepared for his signature, he can also rely on the absence in the certificate of any reference to adverse
37 At 21.
38 At 20–21.
39 At 21, referring to O’Reilly v Commissioners of the State Bank of Victoria (1983) 153 CLR 1 (HCA) at 1382.
40 At 21.
comment on credibility as indicating that there is nothing of that nature on record to bring to his knowledge. He is also entitled to expect any uncertainty in the records to be brought to his attention so that, he, having the statutory responsibility to make the certificate, can personally resolve any such uncertainty. The point is that the Commissioner himself certifies to the required facts, whether he or his deputy signs the certificate. It is not a case in which the senior sergeant who draws up the certificate, has delegated authority to certify anything nor does any authority devolve on him. He is but the gleaner of the required information and he in turn relies on records made by others. The correctness of the certificate in the end depends on the reliability of those records which supply the required information. Parliament by requiring the certificate to be made by the Commissioner of Police could not possibly have expected him to go personally to the ultimate source of all recorded information. By making the head of the police force personally responsible for the correctness of the certified facts Parliament recognised the importance of the required information in the interests of a fair trial. The evidence reveals that the Commissioner of Police had a full sense of responsibility and established a system on which he could rely to perform his statutory function.
[36] The Crown in this case does not contend that there was any delegation of authority to TPG to carry out the operational requirement leading to and including negotiations with landowners under s 18(1)(d). Rather, it says that TPG was contracted to carry out the operations or the “legwork” required in those negotiations. The appropriate delegate, in this case LINZ staff, had established systems which enabled them to be satisfied that TPG was an appropriate provider of the services, and that it had expertise in the negotiations, evaluations and other required tasks. The LINZ delegate was then, as the appropriate delegate under the Act, entitled to rely on the information in the LINZ system to satisfy itself that every endeavour had been made to negotiate in good faith with the owner in an attempt to reach an agreement for the acquisition of the land, pursuant to s 18(1)(d).
[37] The Minister was then entitled to rely on the fact of his departmental staff at LINZ being satisfied, a matter which was specifically addressed and included in the briefing to the Minister in support of the recommendation for the s 23 notice.
[38] As this is a preliminary determination on a question of law, in this case the question of whether or not the actions undertaken to negotiate with the Pascoes as owners of the land were sufficient to meet s 18(1)(d) is not an issue for determination here. That issue may be pursued in the Environment Court in an enquiry under s 24. In this respect, the Pascoes have lodged in the Environment Court an objection under
s 23(3) to the taking of the land. The Environment Court has a wide remit in its enquiry into the objection. The determination by the Environment Court as to whether the land taking was “fair, sound and reasonably necessary” will be a mixed question of fact and law at that stage.41
Conclusion on first preliminary question
[39] The Crown submitted that face-to-face negotiations in relation to land acquisition and the exercise of its statutory functions had always been achieved by use of a third-party supplier with the required expertise. In setting up a system using accredited experts, with LINZ officials then acting as quality assurance, LINZ had put in place a system upon which it was entitled to rely as delegate under the Act to satisfy the requirements of s 18(1)(d).
[40] The arrangements put in place by LINZ are similar to those referred to in the decision in Thompson.42 In Borrowdale, despite there being no formal system with quality assurance in place, the Court of Appeal recognised it was appropriate in the circumstances for officials with the required expertise to carry out the preparation of the required draft lists of “essential businesses”.43
[41] I agree with the Crown’s proposition that it was appropriate for the negotiations and attendant operational issues, such as the assessing of the value of the property, reviewing titles and negotiating, to be performed by a third party to ensure the required expertise was called upon. In addition, the quality assurance mechanisms in place in the system provided confidence that the process was appropriate and the services were “fit for purpose.” The Minister was entitled to rely on the assurances provided by the appropriately delegated LINZ staff, which were in turn based on the expertise and experience of TPG, to be assured that the requirements of s 18(1)(d) had been satisfied.
[42] As to the particular issues raised by the Pascoes, first the plain wording of the section must be read in the light of its context and the purposes of the legislation. The statute must be made to work as Parliament had intended. The section, while
41 John Burrows (gen ed) Land Law (online looseleaf ed, Thomson Reuters) at [PW24.03].
42 Thompson, above n 36.
43 Borrowdale, above n 20.
providing that “the Minister … shall … make every endeavour to negotiate” does not require the Minister personally to take every step in the process. The Minister is entitled to rely on his staff and contractors to undertake the operational matters, leading up to the decision, which he himself must make. The obtaining of valuations and other work involved, including negotiations, requires a level of expertise and resource that is likely to be outside the technical capability of the Minister. That is not to say that the Minister does not have to engage with the information and ensure that he has all the critical information before him in making a decision. However, he is not required to personally undertake the negotiations and associated work.44
[43] TPG is not a statutory decision-maker and was not entitled to bind either LINZ or the Minister. However, this has no bearing on its being engaged to carry out the “legwork” and negotiations. The technical steps and time involved in undertaking the negotiations and associated “legwork” would likely be outside the capacity of the Minister or his delegates. The processes put in place by LINZ for contracting with appropriately qualified third parties to undertake that work were appropriate, and the Minister was entitled to rely on the information and assurances set out in the briefing paper presented to him, subject to his obligations as decision-maker under the legislation. No formal delegation was required to enable TPG to carry out the relevant negotiations and associated work.
Further issues arising
[44] A number of other issues were raised by the Pascoes in the course of argument. Mr and Mrs Pascoe were concerned that the land areas described in the s 19 notice and the s 23 notice were different. In addition, they pointed to omissions in TPG’s chronology, for instance relating to discussions between the Pascoes and LINZ staff and the Minister, as well as some contacts made concerning breaches. LINZ says the chronology is not in error as it only describes matters in which TPG was involved, not LINZ staff or the Minister.
44 See CREEDNZ v Governor-General [1981] 1 NZLR 172 (CA), the leading case on the requirements of the decision-making Minister to engage with reports prepared by officials and third parties and to consider all the relevant material, at 183.
[45] I am not in a position to consider the merits of these arguments. These are matters not relevant to the preliminary determination issue. They are matters for substantive argument and not for determination today.
Second preliminary question
[46] The second question is contingent on an adverse conclusion in relation to the first question, namely how the legality of the s 23 notice issued by the Minister was affected if the Minister had unlawfully delegated his authority. However, I have found that there was no such unlawful delegation of authority here. Therefore, it is not necessary to consider that question further.
Third preliminary question
[47] This question concerns whether the Minister is permitted to exclude the operation of certain clauses45 from the proposed lease, including in accordance with ss 217 and 279(2) of the Property Law Act and pt 2 of the Act.46
[48] Pursuant to s 218 of the Property Law Act, certain various covenants, conditions and powers are implied in all leases.47 The Pascoes say that the implied terms in the lease under the relevant parts of the Property Law Act cannot be excluded or varied under the compulsory acquisition process in the Public Works Act.
[49] The Crown says they can be excluded under s 217 of the Property Law Act, which provides:48
217 Application of sections 218 to 220
Sections 218 to 220 apply, as the case requires, unless a contrary intention is expressed (whether in a lease or otherwise) in accordance with section 279(2) (construction and variation, etc, of implied covenants).
Emphasis Added.
45 Namely cls 4, 5, 6, 10, 11 and 12 of pt 2 of sch 3 and cl 13 of pt 3 of sch 3 of the Property Law Act 2007.
46 Minute of Ellis J, 29 April 2022, at [8].
47 These are set out in pt 2 of sch 3 of the Property Law Act.
48 Emphasis added.
[50] The mechanics for negativing, varying or extending the covenants are then set out in s 279:
279 Construction and variation, etc, of implied covenants
(1)A covenant implied, by this Act or any other enactment, in an instrument or in a short-term lease not made in writing has the same force and effect, and may be enforced in the same way, as if it had been expressed in that instrument or short-term lease.
(2)However, the covenant may be negatived, varied, or extended—
(a)by the express terms of the instrument; or
(b)by a written memorandum executed, as the instrument was required to be executed, by the parties to the instrument; or
(c)if implied in a short-term lease not made in writing, by the express or implied agreement of the parties.
[51] The interpretation of “instrument” is therefore relevant. It is defined in s 4 of the Property Law Act as follows:
instrument—
(a)means any use of words, figures, or symbols (for example, an agreement, contract, deed, grant, or memorandum, or some other document that is certified, executed, or otherwise approved by or on behalf of a party or parties, or a judgment, order, or process of a court) that—
(i)creates, evidences, modifies, or extinguishes legal or equitable rights, interests, or liabilities (without being lodged, filed, or registered under an enactment, or after being so lodged, filed, or registered, or both); and
(ii)is in a visible and tangible form and medium (for example, in handwriting, print, or both), or is in an electronic form in accordance with Part 4 of the Contract and Commercial Law Act 2017 or the Land Transfer Act 2017; and
(b)[Repealed]
(c)includes any covenant expressed or implied (under this or any other enactment) in, and any variation of, any instrument as defined in paragraph (a) or (b); but
(d)does not include an enactment (though it may be in a form prescribed by one, or have covenants or terms implied in it under one, or both)
[52] The Crown says that while there is no agreement in force at the moment, if there is an agreement negotiated it would be an instrument by virtue of being an “agreement” within (a) of the definition. If the land is ultimately taken by proclamation, the proclamation, which is declared by the Governor-General and effects the taking of land on the terms of the recommendation by the Minister, would therefore also be within the definition of “instrument” as a document “otherwise approved by or on behalf of a party or parties” which “creates, evidences, modifies, or extinguishes” legal rights or interests and is in a visible and tangible form. When the proclamation takes effect, it operates in its terms to vest the property or interest in the property in the Crown.
[53] The Pascoes say it is unfair that the Crown can exclude provisions which are there for the benefit of the person against whom the land is taken.
[54] The Crown points to the decision in S & D Dromgool v Minister for Land Information, where the Environment Court noted that the modification of an easement was “an appropriate methodology not affecting the objective or the works, but simply recognising the need to tailor the easement to the particular circumstances.”49 The Court considered there was “no doubt” that if the objectors had been prepared to enter into discussions, appropriate amendments could have been made to make the easement itself “fair, sound and reasonable” and that the taking of the easement was, in the circumstances of that case, a minimal intrusion to achieve the objectives and a “fair, sound and reasonably necessary method to achieve the outcome required.”50
[55] The Crown says that if it cannot lease the land on terms which are acceptable to it, it must take the freehold. It is required to take the least interest that is necessary in its acquisition, and in this case that would be the leasehold interest.
Analysis — implied terms in lease
[56] There is no reason to read down the definition of “instrument” to exclude the taking of land by notice of intention and subsequent proclamation (or by agreement)
49 Dromgool v Minister for Land Information [2018] NZEnvC 108 at [167].
50 At [168]–[169]. This decision is under appeal (see Dromgool v Minister for Land Information
[2021] NZSC 71) but not in relation to this point.
under the Act. The definition of “instrument” includes a “document” which “creates, evidences, modifies, or extinguishes legal or equitable rights [or] interests”. I am satisfied a proclamation is an “instrument” for the purposes of the definition. The proclamation, which is gazetted and publicly notified, approves the taking of land by the Crown under the Act. Whether or not the terms of the acquisition are fair is a matter for the Environment Court under s 24 when the terms are considered in response to an objection. The interest in land taken in the express or implied covenants form the terms of the taking of the land or interest and are relevant to compensation issues under s 60 of the Act.
[57] This position is reinforced by the fact that the covenants to be implied under the Property Law Act are to be implied in the “instrument” by which the land or interest in the land is to be acquired. If that is an agreement negotiated under the Act, or a compulsory acquisition on terms set out in the notice of intention to acquire and the proclamation, the agreement or the proclamation itself will be the relevant “instrument” for the purposes of the Act. Thus, the document by which the land is acquired or taken is an “instrument” and it may in its terms exclude the covenants implied under the Property Law Act, as contemplated by s 279(2)(a).
Conclusion
[58]The preliminary questions for determination are answered as follows:
(a)Is s 18(1)(d) of the Public Works Act 1981 complied with if the relevant negotiations with the land owner are undertaken by an entity accredited by Land Information New Zealand as a Crown Property Accredited Supplier (such as TPG) rather than the Minister or his delegate, provided it is the Minister or his delegate who exercises the ultimate power to enter into an agreement to acquire or proceed to take the land?
The Minister is not required to personally carry out the operational tasks, including the negotiations referred to under s 18(1)(d) of the Public Works Act 1981, but is entitled to satisfy himself that those have been undertaken by staff or contractors in compliance with s 18(1)(d)
for the purposes of exercising the power under the Act to enter into an agreement to acquire or proceed to take land.
(b)If not, does that affect the legality of the s 23 notice subsequently issued by the Minister?
In view of the answer to the first question, this question does not require an answer.
(c)Is the Minister permitted to exclude cls 4, 5, 6, 10, 11 and 12 of Part 2 of Schedule 3 and cl 13 of Part 3 of Schedule 3 of the Property Law Act 2007 from the proposed lease (including in accordance with ss 217 and 279(2) of the Property Law Act and Part 2 of the Public Works Act)?
The Minister is permitted to exclude the terms and conditions implied under cls 4, 5, 6, 10, 11 and 12 of Part 2 of Schedule 3 and cl 13 of Part 3 of Schedule 3 of the Property Law Act 2007 when acquiring land under Part 2 of the Public Works Act 1981.
[59] Issues relating to the negotiations and the terms of the acquisition of land may be relevant in the consideration by the Environment Court of any objection.
Costs
[60] This is an interlocutory matter and costs would usually be awarded following this determination. Unless the parties are able to agree, any application for costs together with submissions should be filed within five days of the date of this decision, and any response within a further five days. Any reply should be filed within a further three days.
Grice J
Solicitors:
Govett Quilliam, New Plymouth
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