Queenstown Central Ltd v March Construction Ltd - [2016] NZHC 1884

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2015-409-105 [2016] NZHC 1884

BETWEEN
QUEENSTOWN CENTRAL LTD

Plaintiff

AND

MARCH CONSTRUCTION LTD Defendant

Hearing:
30 November, 1, 2 and 3 December 2015 (closing submissions

received 16 December 2015)

Appearances:

MR Crotty and AJ Nelder for the Plaintiff
AN Riches for the Defendant

Judgment:

15 August 2016

JUDGMENT OF NICHOLAS DAVIDSON J

QUEENSTOWN CENTRAL LTD v MARCH CONSTRUCTION LTD [2016] NZHC 1884 [15 August 2016]

INDEX

Para Heading

[1]

Introduction

[1] Hendo’s Hole

[4] The parties

[7] Background

[18]

Short chronology

[38]

Pleading

[47]

Is the Fill annexed to and/or part of the Land?

[48] March’s position

[49] QCL’s position

[50] The test in New Zealand

[76] The test to be applied and its application in this case

[77] The evidence of the physical form

[92] Resource Management Act considerations

[110] 2012 variation

[115] Is the Fill annexed to and/or part of the Land?

[126]

Is March liable in trespass?

[128] Did March purchase the Fill, or did it hold a security interest only?

[130] Fill Ownership Agreement

[136] Personal Property and Securities Register (PPSR)

[138] Other assertions of ownership by March

[153] Did March lose ownership of the Fill on transfer of title?

[158]
Do rights and obligations under the Fill Ownership Agreement survive

sale of the Land?

[171] Other dealings with the Fill and the Land

[193] The effect of the sale of Fill to Gateway, QLDC, and Transit

[196] The 2012 Resource Consent

[197]
Did QCL somehow get the benefit of the ‘value’ of the Fill when the

Land was sold?

[201]
Was the sale to Collins Rd Developments Ltd a sham? If not, what

effect does that have on March’s obligations, if any?

[225] Is March liable in trespass even if the sale to Collins Rd is upheld?

[229] Did March abandon the Fill so as to have no interest in it?

[234]
Were there dealings or representations between March and QCL

which estop March denying ownership of the Fill?

[236] An ‘engineered’ solution whereby the Fill remains on the Land?

[240] Consent to remove the Fill

[244] Ownership of the Fill, and trespass

[248] Mesne profits – the conceptual basis

[258] No loss alleged by QCL

[259] The period to which mesne profits should apply

[262] The polarised position of the parties

[263] Some core considerations

[270] Mr Smithies’ valuation approach

[286] Mr Smith’s valuation approach

[297]

Discussion

[315]

Closing comment

[317]

Disposition

Introduction

Hendo’s Hole

[1] In 2006 a large volume of ground material (Fill) was excavated to leave a prominent landmark known as “Hendo’s Hole”, adjacent to the State Highway and Queenstown Airport at Frankton, the burgeoning development area near Queenstown.

[2] The Fill was carefully placed on the adjacent land (the Land). It was covered in topsoil and sown in grass. A resource consent was granted by the Queenstown Lakes District Council (the Council) for the Fill to be “stored” in this way for…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2016] NZHC 1884
Decision Date: 15 August 2016

CaseChat Overview and Summary

Queenstown Central Ltd (QCL) sued March Construction Ltd (March) for trespass and mesne profits in respect of a large volume of excavated ground material (Fill) placed on the adjacent land (the Land) in 2006. QCL sought a declaration that March was liable to remove the Fill from the Land. The essential issue for the judgment was who now owns the Fill and bears the responsibility for removing it so that commercial development can proceed. The issue turned first on the status of the Fill at law, as to whether it had retained a separate identity as a chattel or had become part of the Land by the legal constructs of affixation or annexation. The court found that the Fill had not lost its separate identity as a chattel. The court held that March must remove the Fill and pay rent (mesne profits) for storage of the Fill from the time it became the landowner.

Orders