Pryor v Minister of Land Information
[2015] NZHC 3117
•10 December 2015
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
CIV-2015-419-76 [2015] NZHC 3117
BETWEEN BRIAN TREVOR PRYOR
Appellant
AND
THE MINISTER OF LAND INFORMATION
Respondent
Hearing: 27 July 2015 Appearances:
Appellant in person
M T Parker for the RespondentJudgment:
10 December 2015
JUDGMENT OF WOODHOUSE J AND MR JOHN LARMER
This judgment was delivered by Justice Woodhouse and Mr Larmer
on 10 December 2015 at 2:30 p.m. pursuant to r 11.5 of the High Court Rules 1985.
Registrar/Deputy Registrar
……………………………………
Parties/Solicitors: Mr B T Pryor
Mr M T Parker, Barrister, Waikanae
Ms J S Andrew, Crown Law, Wellington
PRYOR v THE MINISTER OF LAND INFORMATION [2015] NZHC 3117 [10 December 2015]
Background
[1] Mr Brian Pryor appeals against a decision of the Land Valuation Tribunal refusing an application for compensation for land taken under the Public Works Act
1981 (the Act) in addition to compensation already paid.1
[2] Mr Pryor and his wife owned 8.5989 ha of land at Horotiu, north of Hamilton. By proclamation on 30 October 2010 the Crown took 4.0329 ha for roading (the main block). It vested in the Crown on 25 November 2010. A further
3.0756 ha was acquired by the Crown as a severance. Possession of the severance was taken in March 2011 following an advance compensation agreement made on 4
March 2011 in respect of the main block and the severance. The advance compensation agreement was between the Crown and Mr Pryor and his wife. Mrs Pryor’s rights under the agreement were acquired by Mr Pryor. The advance compensation sum for the main block and the severance was $2 million, plus GST if any. This was $1,955,000 for the main block and the severance and $45,000 for buildings. In addition, the Crown agreed to pay $2,000 by way of solatium and various identified costs pursuant to s 66 of the Act.
[3] Payment of the advance compensation was without prejudice to Mr Pryor’s right to have the amount of compensation finally determined by the Land Valuation Tribunal. In the Tribunal Mr Pryor brought claims under s 60 of the Act for increased compensation for the land and improvements and under s 66 for various disturbance payments. The claims under s 60 were for $20,037,000 (excluding GST) for the land, and $207,104 (including GST) for improvements. The claims for disturbance payments under s 66 were as follows:
(a) $126,273.87 (including GST) for expenses in moving a house and amenity work.
(b) $5,926 (including GST) for procuring a surrender of a lease.
(c) $6,707.50 (including GST) for storage of chattels and pets.
1 Pryor v Land Information New Zealand LVT Hamilton LVP-01/2014, 20 December 2014.
(d) $20,275 (including GST) for alternative accommodation expenses.
[4] Mr Pryor also claimed, under s 66 or s 90, $38,959.59 (including GST) for legal and valuation expenses and costs for the land taken and in respect of the claim for compensation.
[5] In the Tribunal Mr Pryor argued that the two valuers who gave expert evidence, Mr Ronald Lockwood (instructed for the Crown) and Mr Stephen Dean (instructed for Mr Pryor), had conflicts of interest because they had worked for government agencies or contractors. Mr Pryor also accused them of deliberately giving misleading evidence. In the face of unchallenged evidence of a planning expert, Mr Michael Briggs, Mr Pryor contended that his land should have been valued on the basis that it had an industrial zoning with an immediate, and not deferred, right of development, but his land had been valued on the basis that it had a rural zoning. He also alleged that the Crown had failed to negotiate with him over an extended period of time. And he contended that the Crown improperly sought to influence the planning process in the lead up to commencing roading works.
[6] The Tribunal dismissed Mr Pryor’s claim for further compensation. It held that Mr Pryor’s claim for over $20,000,000 was not supported by any probative evidence. The Tribunal, on the basis of Mr Lockwood’s evidence, held in effect that the advance compensation payment for the land and improvements was more than sufficient and dismissed Mr Pryor’s claims under s 60. Mr Pryor’s claims under s 66 and for costs of the proceeding were also dismissed.
Law and principles
[7] Mr Pryor appeals under s 26 of the Land Valuation Proceedings Act 1949. It is a general appeal2 so that we are bound to come to our own conclusions on the facts
and law.
2 Green & McCahill Holdings Ltd v Auckland Council [2013] NZHC 507 at [37]; Austin, Nichols
& Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141.
Process
[8] In acquiring land the Crown is subject to various process requirements under s 18, including a requirement of good faith, regardless of whether the land is acquired by agreement or compulsorily. Section 18 relevantly 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 District Land Registrar who shall register it, without fee, against the certificate 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] The good faith requirement takes into account the inherently coercive nature of the acquisition process. Mr Pryor was not a willing seller in any true sense of the word, despite entering into the advance compensation agreement. Any agreement
between the parties is also subject to contract law, including misrepresentation and duress considerations.3
[10] Generally, the Tribunal will not separately assess compensation when the Crown and the landowner have already agreed to compensation. The compensation will be whatever was agreed between the parties.4 But that is subject to the terms of the agreement. The agreement in this case was explicitly “without prejudice to the Owner having the amount of compensation finally determined in the manner provided in the Public Works Act 1981”. The agreement acknowledged the considerable disparity between the parties’ valuations and set out a procedure for resolving this disparity including, in the event of a failure to mediate the dispute, a
claim to the Tribunal.
Land value
[11] Mr Pryor is entitled to “full compensation”, assessed under s 62 and in accordance with established principles. The only provision in s 62 of relevance on this appeal is s 62(1)(b). This materially provides that, in assessing the amount of compensation payable for land taken —
the value of land shall … be taken to be that amount which the land if sold in the open market by a willing seller to a willing buyer on the specified date might be expected to realise …
[12] International Valuation Standards 2013, which link with worldwide accounting standards, incorporate the same concept of value as follows:
The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the parties have each acted knowledgeably, prudently and without compulsion.
[13] Market value is assessed as a totally objective construct with hypothetical parties rather than, for instance, a taking authority and a reluctant land owner.5 The
3 Waikato Regional Council v Marshall HC Hamilton CIV-2008-419-918, 11 November 2010 at
[48]-[53].
4 Planet Kids Ltd v Auckland Council [2013] NZSC 147, [2014] 1 NZLR 149 at [109].
5 Inland Revenue Commissioners v Clay [1914] 3 KB 466 (CA); Carlton Heights Ltd v Minister of Works [1963] NZLR 973 (LVC) at 976; Tawharanui Farm Ltd v Auckland Regional Authority [1976] 2 NZLR 230 (SC) at 234-235.
value of land can be measured through prices obtained in the past for land of similar quality and in a similar position.6 Ambiguity as to the value of a property should be resolved in favour of a more liberal estimate.7
[14] An important related principle is that of highest and best use. Valuation
Standards defined this as follows:
The most probable use of a property which is physically possible, appropriately justified, legally permissible, financially feasible, and which results in the highest value of the property being valued.
[15] Following from this, and of direct relevance in this case, is that where, at the specified date, there is a strong likelihood of re-zoning to a higher use (such as rural to industrial), then that must be taken into account to the extent that it would affect the interaction between the informed hypothetical buyer and seller.8
Disturbance claims
[16] In addition to compensation for the value of the land (including improvements) the owner is entitled to compensation for any disturbance. This is governed by s 66, as follows:
66 Disturbance payments
(1) Subject to subsection (2), the owner of any land taken or acquired under this Act for a public work shall be entitled to recover compensation for any disturbance to his land and in particular to recover, where appropriate,—
(a) all reasonable costs incurred by him in moving from the land taken or acquired to other land acquired by him in substitution for the land taken or acquired, including—
…
(ii) the reasonable valuation and legal fees or costs incurred in respect of the land taken or acquired:
(iii) the reasonable valuation and legal fees or costs incurred in respect of the land acquired in substitution, but not exceeding the reasonable valuation and legal fees or costs which would be
6 Poverty Bay Catchment Board v Forge [1956] NZLR 811 (LVC).
7 Tawharanui Farm Ltd v Auckland Regional Authority, above n 5, at 234.
8 Viaduct Harbour Holdings Ltd v Auckland City Council [1998] NZRMA 129 (HC).
incurred in respect of land with a market value equal to the land taken or acquired:
(iv) the actual and reasonable costs incurred by him in transporting his goods and chattels and those of his family from the land taken or acquired to the land acquired in substitution, but not exceeding the reasonable costs of such transport by road over a distance of 80 kilometres, or such greater distance as is necessary to reach the nearest land that reasonably could have been acquired in substitution:
…
(2) No person shall be entitled to compensation under this section unless—
(a) he was not a willing party to the taking or acquisition; or
(b) he was a willing party to the taking or acquisition principally because the land had been notified.
[17] Compensation for disturbance is for loss that is a direct consequence of the taking of the land and is not too remote.9 The loss should be determined in accordance with general principles governing the assessment of compensatory damages for financial loss. The claimant is bound to mitigate losses if practicable.10
[18] Reasonable valuation and legal fees recoverable under s 66(1)(a)(ii) are for those incurred in an attempt to negotiate a settlement, or up until an agreement is reached. This is distinct from litigation costs for the hearing in the Land Valuation Tribunal, and on appeal, which are governed by s 90.11 Section 90 provides:
90 Costs in claims for compensation
(1) Subject to the provisions of this section, the costs of a hearing by the Land Valuation Tribunal under this Part of this Act shall be in the discretion of the Tribunal, which may direct to and by whom and in what manner those costs or any part of them shall be paid.
(2) Where the respondent has made an offer of any amount for compensation and the compensation awarded is less than the amount so offered, the Tribunal may order the claimant to bear his own costs and to pay the costs of the respondent in so far as the costs of either party are incurred after the making of the offer.
9 Wellington City Council v Berger Paints NZ Ltd [1975] 1 NZLR 184 (CA) at 205.
10 Lower Hutt City Corporation v Dyke [1954] NZLR 166 (SC) at 170.
11 See Stringer v Minister of Lands [2014] NZHC 776; Chief Executive of Land Information New Zealand v Kane Carding Company Ltd HC Napier CIV-2007-441-578, 11 December 2007 at [44]-[46].
(3) If costs are not awarded in accordance with the provisions of subsection (2), the Tribunal shall, unless for special reasons it thinks it proper not to do so, order the respondent to bear his own costs and to pay the reasonable costs of the claimant.
(4) Without limiting the generality of the provisions of subsection (3) of this section, it is hereby declared that the fact that the Tribunal in any case considers that the amount claimed was unreasonably high having regard to the compensation awarded or the evidence before the Tribunal, shall be a special reason that the Tribunal may take into consideration for the purposes of that subsection.
Evidence before the Tribunal
[19] Mr Pryor, who represented himself before the Tribunal, gave evidence, including evidence he presented as his opinion as to value of the land. He also called a valuer, Mr Nigel Dean, to give expert evidence of value, although Mr Pryor then challenged Mr Dean’s impartiality. For the respondent, there was expert valuation evidence from Mr Ronald Lockwood and expert planning evidence from Mr Michael Briggs. For the respondent, there was also evidence from Mr Kevin O’Brien. Mr O’Brien was manager of The Property Group Ltd. That company was engaged by the New Zealand Transport Agency (NZTA) to negotiate with landowners on behalf of the Crown for acquisition of the land required for the road works. The Tribunal recorded that, in addition to this evidence from witnesses, “a considerable number of documents were produced in evidence”. A considerable number of documents were also produced on the appeal, with some additional documents produced during the course of the hearing by Mr Pryor.
[20] The expert planning evidence of Mr Briggs was of importance both in relation to the opinions on value of the valuers and, in turn, the conclusion of the Tribunal. Mr Briggs’ evidence as an expert was unchallenged by any other expert and largely unchallenged in cross-examination by Mr Pryor. On the appeal Mr Pryor advanced a number of contentions on planning matters, and in particular as to the appropriate zoning classification for his land at the relevant dates, but none of these contentions, to the extent that they were inconsistent with the evidence of Mr Briggs, can be given any weight.
[21] Mr Briggs said that a proposed Waikato District Plan was notified in
September 2004. Mr Pryor’s land was at that date zoned rural. Some nearby land
was designated as heavy industrial. After appeals from various parties, the Environment Court made consent orders in April 2011 and September 2012. Mr Pryor’s land was then zoned “Industrial Park”, but its development was deferred until certain conditions had been met. The severance could not be developed before
2012 at the earliest and then not until at least 80% of the total zone had been developed. When these conditions were met would depend on market uptake of other available land within the same zone, of which there was over 100 ha. The remaining land was subject to deferment of development until after 2021.
[22] The Environment Court decisions were made after the specified dates for assessment of value of November 2010 for the main block and March 2011 for the severance. Mr Briggs said that at the specified dates “an informed purchaser could not … be certain what the zoning would be following conclusion of the appeals”. However, in his opinion, it was reasonable to assume the land would be zoned industrial but with development deferred to some date in the future. He said that the Waikato District Council and the Hamilton City Council supported staged light industrial development of the area including the Pryor land. The result was that the expert evidence was that in late 2010 and early 2011, covering both of the specified dates for compensation assessment, the land was zoned rural; there was a strong likelihood of a zoning change to industrial, but with this subject to land use and development rules that would defer effective development to a higher use for at least a decade.
[23] Mr Lockwood had been engaged by Crown agencies from 2008 to provide valuation reports in the course of the Crown’s negotiations with Mr Pryor. The extent of his involvement and details of his approach to valuation are set out in reasonable detail in the Tribunal’s decision and need not be repeated here.12 Mr Lockwood’s assessment of compensation for the land as at December 2010 was
$1,780,000 (excluding GST). That figure is $220,000 less than the advance
compensation payment of $2,000,000 (excluding GST).
12 Pryor v Land Information New Zealand, above n 1, at [32]-[49]; and [50]-[51] in relation to improvements.
[24] Mr Lockwood assessed the land as a rural block at the valuation date but with the potentiality or likelihood of re-zoning to what could appropriately be described as “deferred industrial”. Mr Lockwood assessed the foreseeable time before which there could be industrial development as between 10 and 15 years. Although the valuation was as at December 2010, and based on inspections of the land through to that date, Mr Lockwood was satisfied that this provided an accurate valuation as at both of the specified dates because market conditions remained unchanged over the period involved.
[25] Mr Dean was instructed by Mr Littlejohn, the lawyer then acting for Mr Pryor, in August 2013. Mr Dean had had no opportunity to inspect the property before the main block and the severance were taken and the road works undertaken. Unlike Mr Lockwood, whose instructions were to value in accordance with the Act, Mr Dean received strict instructions to value according to three fixed alternative bases related to zoning: heavy industrial zone; heavy industrial zone with deferral provisions from 5 to 10 years; and a current rural zoning but with a proposed industrial zone subject to appeal. The assessments of compensation were, respectively: $5,122,000, $3,745,400 and $3,170,950. Relevant particulars of Mr
Dean’s assessments are set out in the Tribunal’s decision.13 Mr Dean included a
valuation of improvements figure of between $200,000 and $300,000 for the house, sheds and hydroponic growing houses. In respect of the latter he provided the valuation on the assumption that the hydroponic growing houses were operative. This was not borne out by other evidence, including Mr Lockwood’s evidence based on Mr Lockwood’s own inspections.
Tribunal decision
Valuation
[26] The Tribunal accepted the evidence of Mr Briggs and Mr Lockwood. It rejected Mr Dean’s evidence because of, amongst other things, the tight parameters under which he was instructed and his inability to inspect the property at the relevant times. Mr Lockwood, on the other hand, inspected the property, provided clear
comparative sales evidence and valued the property based on the statutory formula.
13 Pryor v Land Information New Zealand, above n 1, at [27]-[31].
The Tribunal also preferred Mr Lockwood’s assessment of the depressed market at
the relevant times and his approach to the likely development period.
[27] The Tribunal was also satisfied that Mr Lockwood’s assessment of improvement value at $45,000 was generous considering the relatively small size of the dwelling on the land, when most dwellings of that size would be given away as free for removal. It also held that the hydroponic growing houses were worthless, based on Mr Lockwood’s evidence, the testimony of other witnesses, photographic evidence and the fact that Mr Pryor was offered the chance to remove them but declined to take up that offer. The house, garage and hydroponic sheds were held to have only nominal value in a deferred industrial zone.
Allegations of misconduct
[28] There were the three broad contentions by Mr Pryor of various forms of improper conduct. All of these were carefully considered and rejected by the Tribunal.14
[29] Mr Pryor argued before the Tribunal, as he did on appeal, that Mr Lockwood and Mr Dean had conflicts of interest because they took instructions from, or had in the past received instructions from, the respondent, and this meant, in effect, that the evidence of Mr Lockwood and Mr Dean was inadmissible. The Tribunal held that the argument was misconceived and that particular contentions were unsupported by evidence. The Tribunal also rejected similar challenges to Mr Briggs’ evidence. The Tribunal had no hesitation in accepting that Mr Briggs’ opinions were properly supported by the materials he referred to and they accepted his evidence as unbiased, cogent and accurate.
[30] On the question of negotiations, the Tribunal concluded, on the basis of documentary evidence available, and particularly correspondence between Mr Pryor and his lawyers, and the respondent and their agents, that the Crown sought throughout to negotiate a comprehensive settlement with Mr Pryor according to the
statutory requirements. The Tribunal concluded that a comprehensive settlement
14 Pryor v Land Information New Zealand, above n 1, at [58]-[73].
was sought with cordiality on the part of Crown representatives. The difficulty in negotiations was caused by Mr Pryor, and his steadily escalating and unrealistic claims as to the value of his land.
[31] The other contention was one of improper involvement by the NZTA in the planning process. The Tribunal accepted Mr Briggs’ evidence that the involvement of the NZTA was limited to proper activities relating to the impact on the roading infrastructure of zoning decisions and road access requirements. There was no suggestion that they attempted to influence property prices by manipulating zoning decisions.
[32] The Tribunal was therefore of the view that Mr Pryor was paid full, indeed generous, compensation for his land and improvements.
[33] For the various disturbance claims the Tribunal concluded that all valid claims had been covered by the funds paid under the advance compensation agreement, and in other payments. The Tribunal concluded that the claims made to it for compensation for disturbance were not recoverable.
[34] There was the claim to the Tribunal for $126,273.87 for relocation expenses and amenity work in relation to the dwelling on the land, which was moved to the part of the land originally owned by the Pryors and which remained in Mr Pryor’s name. The Tribunal rejected this claim having regard to the following findings. The house and other improvements belonged to the respondent, since its value had been included in the advance compensation payment, but the respondent nevertheless offered the house, a garage, and the hydroponic grow houses to Mr Pryor, at no cost to him, if he wished to take them and move them at no cost to the respondent. Mr Pryor accepted this offer in writing, with his signature witnessed by his lawyer, and with an undertaking to remove the buildings by 15 February 2011. The respondent then agreed to pay an additional $15,000 towards the cost of moving the house and grow houses and that was paid in full. The house was moved but the grow houses were left. Mr Pryor’s lawyer advised the respondent that Mr Pryor did not wish to retain any buildings that remained on the land. The Tribunal held that the respondent
was entitled to rely on that advice and that Mr Pryor was not entitled to any part of the claim he was then advancing.
[35] There was the claim of $5,926 for procuring surrender of a lease. This claim was rejected because the advance compensation agreement expressly provided that Mr Pryor, in fact, had to indemnify the Crown from any claim made by the lessee.
[36] The Tribunal concluded that the storage costs for chattels and Mr Pryor’s cats did not fall under s 66 because he was not moving to “other land acquired by him in substitution for the land taken or acquired”, but was moving to his own dwelling on the portion of land retained by him. Even so, the eight month period for storage was not considered reasonable under s 66, given the shift only involved a few hundred metres to immediately adjacent land.
[37] For alternative accommodation expenses the respondent made a contribution of $5,400 on 7 February 2011 towards expected accommodation costs. This covered temporary accommodation for eight weeks after removal of the dwelling. Further, the Tribunal was not persuaded that the statute justified payment of expenses incurred after the date of receipt of the advance compensation payment. Beyond that point, Mr Pryor’s inability to obtain inspections and consents was no fault of the respondent. The expenses were also not reasonably incurred. There was also no obligation to provide Mr Pryor with any more than temporary accommodation.
[38] The Court accepted that packaging and moving costs of $7,415.80 were required under s 66, but that these had been paid.
[39] For legal and valuation expenses, Mr Pryor received nine payments, totalling
$82,595.17 for legal fees and $14,049.75 for planning and valuation costs. According to the Tribunal, there was no basis to the suggestion that the respondent did not meet its obligation to provide reimbursement. Any further payment would be beyond the reasonable, and in any event there was more than a large enough balance remaining within the advance compensation payment to fully cover legal and valuation claims.
Submissions
[40] On appeal, Mr Pryor advanced essentially the same arguments he advanced to the Tribunal. He contended that Mr Lockwood’s evidence was wrong because he valued the land as rural, rather than industrial. He pointed to various nearby properties which he believed should have been considered as providing comparable sales evidence. He disputed the reliance of both valuers on the low future development potential of his land on an argument that zoning conditions are resource consent issues and zoning can be changed relatively easily. Mr Pryor also objected to the Tribunal’s reliance on the sale price for the severance as credible evidence for assessment of value.
[41] Mr Pryor submitted that the NZTA had a fiduciary duty to inform him of relevant changes but, in order to deliberately mislead him, it failed to do so. He accused the NZTA and the Waikato District Council of deliberately manipulating zoning to keep his land value down and to prevent purchasers from wanting his land and asserted that they acted in contravention of the Commerce Act 1986. He contended that he was economically coerced into signing the advance compensation agreement, largely through the crown withholding payments. He also argued that he was coerced into signing the further agreement involving his lawyer, when Mr Pryor agreed to remove the buildings on his property at no cost to the crown. He pointed to a letter on 13 November 2010 from the Crown allegedly urging him to leave the property, including his hydroponics, within two weeks. He says he never even saw, until 4 March 2011, the email between the Crown and his lawyer, in which he allegedly agreed to receive $15,000 to move his house. He said the Crown never engaged with him regarding relocation and expenses, ignored the alleged fact that his hydroponics system was operational, and put pressure on him to sign away his statutory rights and remove his goods and chattels. He considered that the destruction of his hydroponics system amounted to theft. He also suggested that the lease on the property was used as a weapon against him, and that he was entitled to be indemnified for losses caused in dealing with the lease.
[42] Mr Pryor continued to argue that Mr Lockwood and Mr Dean acted under conflicts of interest, or not independently. He asserted that Mr Lockwood
deliberately used inaccurate sales evidence to favour the respondent, in breach of the Fair Trading Act 1986, and in breach of provisions against misleading conduct in the New Zealand Valuers’ Code of Ethics. He also asserted that Mr Dean breached the code of ethics by acting despite conflicts of interest (particularly working for the government) and not informing Mr Pryor of those conflicts.
[43] Mr Parker submitted, for the respondent, that the Tribunal’s decision was correct and appropriate, that there were no grounds for an award of compensation for a sum more than the advance compensation agreed, and that Mr Pryor’s valuation figure in excess of $20 million was without any evidential foundation. On other specific points he supported the Tribunal’s conclusions.
Evaluation
Land value
[44] We are satisfied that the Tribunal was correct in accepting Mr Lockwood’s valuation and, therefore, that it was correct in preferring Mr Lockwood’s opinion to that of Mr Dean. Mr Dean’s assessments were severely constrained by the instructions he received.
[45] As we earlier indicated, evidence of the planning process was central to the valuation. Mr Lockwood correctly assessed the land as a rural block at the valuation date, but with the potentiality or likelihood of re-zoning to what was conveniently described as “deferred industrial”. Mr Lockwood’s assessment in that regard was consistent with, and therefore supported by, the unchallenged evidence of Mr Briggs. One of the valuation scenarios imposed on Mr Dean did enable him to value the land as rural land with a proposed new zoning, but the proposed zoning in this scenario was industrial or heavy industrial without any constraints on immediate development. Given the weight of the planning evidence it is not surprising that the Tribunal did not accept Mr Dean’s valuations.
[46] When the comparable sales used by Mr Lockwood to support his deferred industrial approach are examined,15 it is clear that, excluding number 3 as an outlier, the transactions considered are indicative of a value for the subject land of around
$20/m2 with a sale of adjoining land being the best comparable. These support the
overall valuation. Mr Dean’s approach was hampered by his instructions, but his report in evidence noted four sales of rural blocks with potential for re-zoning to industrial, ranging from $15/m2 to almost $40/m2. Mr Dean’s valuation, assuming re-zoning potential, exceeded this range without any clear correlation with those sales. The Tribunal preferred Mr Lockwood’s assessment, commenting that even this was generous. We concur.
[47] Mr Pryor advanced various criticisms of the approach of both valuers. We are unpersuaded by Mr Pryor’s submissions in that regard. A number of them are simply contrary to what the valuer said. Others involved assertions which required an evidential foundation but for which there was none. In other respects Mr Pryor’s arguments involved misconceptions as to the proper approach to valuation in this context.
[48] For reasons we come to, we are also satisfied that there was no foundation for Mr Pryor’s contention that Mr Lockwood’s evidence, and indeed Mr Dean’s evidence, should be rejected because of conflicts of interest or for other reasons of alleged misconduct. For all of these reasons we are therefore satisfied that the Tribunal was correct to conclude that Mr Pryor had not established an entitlement to any compensation for the land in addition to what he had already been paid. This was established by Mr Lockwood’s valuation, and one which the Tribunal described as generous, of $1,780,000 plus GST, for the land including any improvements.
[49] We have not separately addressed the valuation evidence relating to the value of the improvements, and in particular differences between Mr Lockwood’s original assessment of $45,000 for all improvements, and Mr Dean’s figure of between
$200,000 and $300,000. In the course of his evidence before the Tribunal Mr
Lockwood in fact amended his assessment for the dwelling to a figure of $120,000
15 In particular sales 1-5 in Appendix 1 attached to his Tribunal evidence, at page 774 of the bundle.
or more, on the basis of an assessment of rental income. The Tribunal did not accept that evidence. We are satisfied that the Tribunal’s conclusion on the valuation of improvements, including the hydroponic system, were correct and for the reasons recorded by the Tribunal.
Valuers’ alleged conflicts of interest
[50] It is clear that Mr Pryor developed a rather jaundiced view of valuer opinions during the period from initial contact with The Property Group as agent for NZTA through to evidence provided to the Tribunal by two registered valuers, one of whom was instructed by his own barrister. The Property Group chronology put in evidence16 makes it clear that Mr Pryor saw his property as worth well over $10 million when first contacted and subsequently more than $20 million. It is apparent that he received a number of valuer opinions that were rejected (and surprisingly he was reimbursed for fees incurred despite not disclosing the advice to NZTA). This
disenchantment with valuer opinion persisted well past compulsory acquisition. When Mr Pryor was advised that his case before the Tribunal required expert opinion, Mr Dean was belatedly instructed.
[51] Although Mr Dean’s values were significantly higher than Mr Lockwood’s assessment, due largely to instructed assumptions that did not align with planning and development reality, Mr Pryor was obviously deeply unhappy with Mr Dean’s evidence. In putting his own case Mr Pryor was critical of both valuer opinions to the extent of claiming there was unethical conduct and conflicts of interest that adversely affected his ability to receive full compensation.
[52] These are serious charges. A reputation for integrity and impartiality is essential in carrying out professional duties and any suggestion of improper conduct requires close examination.
[53] In the notice of appeal filed 5 February 2015 Mr Pryor claimed that both
valuers “have impeached themselves by not complying with their Code of Ethics and
Conduct”. He went on to say, in relation to the valuations provided: “these are not
16 At pages 450-452 of the common bundle of documents, plus the missing page 5 handed up during the appeal hearing.
independent assessments and they do not reflect the true value of the property”. In relation to that last assertion, analysis of the comparative evidence clearly demonstrates that it is Mr Pryor’s preconceived views that do not reflect the true value of the property and the Tribunal correctly relied on Mr Lockwood’s evidence as being the more robust of the valuer opinions available. There is no basis for the claim that Mr Lockwood was in any way inappropriately influenced by The Property Group, NZTA or anyone else. The accusation that he was not “at arm’s length” from The Property Group and failed in a duty of care is somewhat ironic considering Mr Pryor consulted a number of valuers before the instruction to Mr Dean. All had obviously rejected his predetermined view of value to the extent that they were unlikely to be helpful to his case. Unsurprisingly, there are no valuer opinions in the evidence before us that remotely support Mr Pryor’s views.
[54] Mr Dean did provide values at short notice and well after the specified dates, but this advice was tightly prescribed by the instructions received. At the Tribunal hearing Mr Dean accepted the inherent limitations his instructions imposed. As well as rejecting his expert’s valuation as too low, despite being based on more favourable assumptions than were warranted by the actual zoning position, Mr Pryor also alleged that Mr Dean engaged in unethical conduct.
[55] The essence of his allegations against the valuers is that clauses 1.4 and 1.7 of the NZIV Code of Ethics were breached by Mr Lockwood; and clauses 2.2 and
2.3 by Mr Dean. Clause 1.4 is as follows:
No member shall prepare or certify any statement which is known to be or ought to be known to be false, incorrect, misleading, deceptive or open to misconstruction by reason of a misstatement, omission or suppression of a material fact, any deceptive act, or otherwise.
The inference from Mr Pryor’s submissions is that Mr Lockwood provided misleading evidence. For the reasons set out earlier, there is no foundation for this allegation.
[56] Clause 1.7 is as follows:
A member must maintain the strictest independence and impartiality in the performance of the member’s professional duties. To this end no member
shall (a) adopt the role of advocate to the exclusion of that independence and impartiality (b) allow the performance of that member’s professional duties to be improperly influenced by the preferences of clients or others as to the result of their professional work (c) rely improperly upon information supplied by clients or others in the performance of their professional duties or (d) act in any other way inconsistent with the duties of independence and impartiality.
Mr Pryor claims that Mr Lockwood was improperly influenced by the Crown, The Property Group, and NZTA, such that he failed to act with independence and impartiality. Again, there is no evidence that Mr Lockwood was inappropriately influenced in any way.
[57] Turning to his allegations against Mr Dean, Mr Pryor cited clauses 2.2 and
2.3 of the Code of Ethics:
2.2A member must not accept or carry out any instruction where there is, or may reasonably be construed to be, a conflict of interest and must withdraw from any instruction if such a conflict of interest arises or becomes known after the instruction has been accepted, unless such conflict of interest is fully disclosed in writing to all relevant parties and all such parties agree that the instruction may be accepted or continued by the member.
2.3A member must inform the member’s client or clients of the nature of any business connections, interests or other affiliations the member may have in connection with the service to the client or clients.
Although he has not alleged a breach of clause 1.7, essentially the same claims are made as for Mr Lockwood – that Mr Dean has not acted with independence and impartiality, being beholden to the Crown and its agents through prior Collier connections, and therefore having a conflict of interest that was not disclosed.
[58] It is clear from Mr Dean’s evidence, and his response to questions at the hearing, that, although his firm may have been involved in property management contracts with OTS and NZTA, he acted in a totally impartial manner in his own right as an expert valuer, albeit reporting in accordance with the instructions he received.
[59] At paragraph 30 of his points on appeal Mr Pryor put what amounts to a hypothetical question as follows:
So how is anyone going to get a full and fair settlement when NZTA and their agents can buy valuations?
This amounts to a fairly explicit allegation of serious misconduct. Such an allegation should never be made without a solid factual foundation. Such an allegation made by a lawyer without a solid factual foundation would be likely to result in disciplinary action against the lawyer. This allegation, and numbers of others, should never have been made. Mr Pryor’s disappointment in losing his land and not getting the sort of money that he was hoping for, and his age and health problems, are acknowledged, but they do not remotely excuse these sorts of unfounded allegations.
Negotiation by the Crown with Mr Pryor
[60] On the appeal Mr Pryor relied on the same evidence, being his own evidence, and the same arguments that he advanced in the Tribunal in support of his contention that the respondent and other Crown agencies had not only failed to negotiate with him in a fair manner, and otherwise as required by the Act, but had positively acted improperly in various ways in dealing with him. The heart of the Tribunal’s conclusion on this argument, after reference to Mr Pryor’s contentions, was as follows:
[66] An analysis of the correspondence between the parties has led this tribunal to the directly opposite conclusion. Contrary to Mr Pryor’s contention, on the documentary evidence available to us, and in particular having regard to the course of correspondence and emails between the Respondent’s agents and advisors, and Mr Pryor’s many lawyers and other professional advisors, the conclusion is inescapable that the Respondent has throughout sought to negotiate a comprehensive settlement with Mr Pryor in respect of the taking of a portion of his land.
[61] The Tribunal then referred to Mr Pryor’s refusal to deal with Mr O’Brien, following an initial meeting in June 2004 and his insistence that all further dealings had to be through his legal representatives of whom, as the Tribunal noted, there were a number.
[62] We are satisfied that the Tribunal was correct in its conclusion, in effect, that Mr Pryor was the person responsible for unnecessarily complicating the process and that there were no failings on the part of the respondent or of any other
representatives of the Crown. On this issue, on other specific contentions of Mr Pryor such as conflict of interest or manipulation by NZTA, and on the ultimate issue of the value of the Pryor land, it is appropriate to record the Tribunal’s conclusion in its discussion of Mr Pryor’s argument that there was a failure properly to negotiate with him:
[68] The difficulty throughout seems to have been that Mr Pryor held an unrealistic expectation that his land was initially worth $11 million, later raised to $20 million, and more. That, coupled with his refusal to meet with Mr O’Brien and other agents appointed by the Respondent for the purpose of negotiating a settlement, made it impossible for a settlement to be negotiated on terms fitting within the statutory parameters of the Public Works Act
1981. Mr O’Brien and his colleagues had no choice in the matter, being bound to act within the applicable statutory parameters. These proceedings inevitably followed.
[69] Mr Pryor’s criticisms of Mr O’Brien are, on the evidence available to us, completely unfair and unjustifiable, and we do not accept that the Respondent has ever sought any process or outcome other than a prompt, fair and reasonable negotiated settlement with Mr Pryor. Mr Pryor’s apparent inability to accept the overwhelming valuation evidence that his land was worth far less than the $20 million he claims has led inexorably to the taking of a portion of his land by proclamation, and to these proceedings.
[63] There is also no evidence to suggest that the respondent deliberately misled or deceived Mr Pryor by not disclosing proposed zoning changes. The Crown did not have any particular duty to disclose to Mr Pryor details of zoning changes. There is also no evidence of any prejudice to Mr Pryor caused by the alleged lack of disclosure. In any case, the Crown was providing Mr Pryor with payments for valuation and legal expenses. It was for Mr Pryor’s own advisers to keep him informed.
Alleged NZTA influence on the planning process
[64] We are satisfied that there was no improper influence of the planning process by NZTA, or by the Waikato District Council, contrary to Mr Pryor’s submissions. We agree with the Tribunal’s reasons for rejecting this contention. In essence, there is no evidence to provide any foundation for Mr Pryor’s argument and it is contrary to the essentially unchallenged evidence of Mr Briggs, as follows:
There was no suggestion or evidence that the NZTA submissions were motivated by a desire to reduce land values; rather they were for proper
planning reasons. I saw no evidence of any attempt to wrongly influence or control the outcome.
Other general submissions of Mr Pryor
[65] There were further submissions by Mr Pryor involving a broad challenge to the outcome. He argued, for example, that he had been coerced into signing the advance compensation agreement, that vital funds to which he was entitled were withheld, and there were other instances of coercive action or bad faith. We are satisfied that there is no evidence to support these other allegations and that the evidence indicates the contrary of what Mr Pryor was asserting.
Disturbance claims
[66] We agree with the Tribunal’s conclusion, and for the reasons recorded by the Tribunal, that all compensation for disturbance to which Mr Pryor was entitled had been paid and that the further claims advanced in the Tribunal, and advanced again on this appeal, are not sustainable.
[67] The principal claim is $126,273.87 for relocation expenses and amenity work in relation to the house. The Tribunal rejected this claim on the basis of a number of findings summarised in this judgment above at [34]. We agree with the Tribunal’s findings. Mr Pryor’s arguments depend on contentions which are not borne out by the clear contemporaneous evidence. We also agree with the Tribunal’s conclusions on the other claims for disturbance payments and for further payments for legal and valuation expenses. It in fact appears that Mr Pryor was treated generously in relation to costs for valuation fees because he was paid for valuation reports he obtained but which were not disclosed to the respondent or NZTA.
[68] There was an issue as to whether some of the legal and valuation costs claimed by Mr Pryor should be assessed under s 66 or s 90. The conclusion just recorded applies to claims under s 66 for disturbance payments. Claims under s 90 relate to costs in the proceeding which we deal with next.
Costs
[69] At the conclusion of the respondent’s submissions there was a request that costs be reserved. In an endeavour to avoid the possibility of a protracted argument over costs we record some conclusions on questions of costs.
[70] If the respondent seeks costs it is entitled to an order that Mr Pryor pay the respondent’s reasonable costs. In accordance with the High Court Rules, the general rule is that costs follow the event, and the respondent has succeeded in all respects. If the respondent does seek costs, and unless the respondent considers that it may be entitled to increased costs, or even indemnity costs, the respondent is entitled to costs assessed on a 2B basis (that is to say, in accordance with the schedules in the High Court Rules).
[71] Accordingly, if the respondent seeks costs and accepts that costs should be fixed on a 2B basis, there will be an order to that effect. Any issue as to the precise quantum of costs on a 2B basis is to be determined by the Registrar. The respondent is also entitled to reasonable disbursements, also to be fixed by the Registrar in the event of any dispute. On this basis the respondent should file a memorandum, and serve a copy on Mr Pryor, recording the respondent’s acceptance of costs on a 2B basis and recording its calculation of costs and reasonable disbursements. That memorandum should be filed and served by 29 January 2016. Any response from Mr Pryor should be recorded in a memorandum to be filed and served by 19
February 2016. The matter should then be referred to the Registrar for a final order on costs.
[72] If the respondent seeks costs other than on a 2B basis a memorandum in that regard should be filed and served by 29 January 2016 with that memorandum to. Any response from Mr Pryor should be filed and served by 19 February 2016 with the memorandum referred to us. We will then determine the issues on the papers.
Result
[73] The appeal is dismissed.
[74] There are orders and directions as to costs as recorded at [69]-[72] above.
Woodhouse J John Larmer
3
4
1