Robertson v Auckland Council
[2014] NZHC 765
•14 April 2014
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2005-404-7348 [2014] NZHC 765
UNDER The Public Works Act 1981 BETWEEN
J A ROBERTSON & ORS Plaintiffs
AND
AUCKLAND COUNCIL Defendant
CIV 2006-404-1881 BETWEEN
P D M SPENCER-WOOD Plaintiff
AND
AUCKLAND COUNCIL Defendant
CIV 2006-404-7350 BETWEEN
D J McCORMICK Plaintiff
AND
AUCKLAND COUNCIL Defendant
CIV 2005-404-7095 BETWEEN
THE ROYAL NEW ZEALAND FOUNDATION FOR THE BLIND & ORS
Plaintiff
AND
AUCKLAND COUNCIL Defendant
CIV 2005-404-4351
BETWEEN I B FLAVELL & ANOR Plaintiffs
J A ROBERTSON & ORS v AUCKLAND COUNCIL [2014] NZHC 765
ANDAUCKLAND COUNCIL Defendant
CIV 2005-404-4250 BETWEEN
C W WILLIAMS & ANOR Plaintiffs
AND
AUCKLAND COUNCIL Defendant
CIV 2005-404-7351 BETWEEN
D M STEWART Plaintiff
AND
AUCKLAND COUNCIL Defendant
Hearing: 24-28 February, 3-7 March 2014 Counsel:
C Carruthers QC and W Aldred and P Cassin for plaintiff
M Casey QC, G Hall and K Scott for defendantJudgment:
14 April 2014
JUDGMENT OF FOGARTY J
This judgment was delivered by me on 14 April 2014 at 3.30 p.m., pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date: ………………………….
Solicitors/Counsel :
Colin Carruthers QC. Wellington
Wendy Aldred Wellington
Paul Cassin, AucklandM Casey QC, Auckland
Buddle Findlay, Auckland - G Hall and K Scott
.
TABLE OF CONTENTS
Introduction [1]
The threshold arguments [18] The special legislation point [19] If the PWA applies, s 40(2)(a) was validly determined by the WCC in 1996 [20] The equitable defence of laches [21] Residual exercise of discretion [22]
A literal or purposive of construction of s 40 of the Public Works Act 1981?[24] Ordering of issues [38] Issues
1. Did the AHB hold the land for a public work? [39]
2. Was the land required by AHB for a public work in 1982/1983? [70]
3.If the land was not required for a public work is it still held for a public work? [78]
4. Was the land compulsorily acquired? [86]
5. Were the properties, the subject of these proceedings, in fact
compulsorily acquired [103]
Each acquisition
The purchase from the Clares, claim by Royal New Zealand Foundation for the
Blind McIntosh and Ryan claim – CIV-2004-404-7095 (Clare land) [110] Flavell & Hensley (Speechlay Land) CIV-2005-404-431 [117] J A Robertson and ors CIV-2005-404-77348 [121] The McCormick sale CIV 2005-404-7350 [126] The Stewart land CIV-2005-404-7351 [130] The Williams’ land CIV-2005-404-4250 [133]
6. Was the land held for an “essential work” in the period 1982 to 1987?[149]
7. Did the Auckland Harbour Board and Waitemata City Council (Te
Atatu) Empowering Act 1983 displace the obligations on the AHB from
its enactment on 2 December 1983 to offer back the land? [151]
8. Was the Waitemata City Council ever under a statutory obligation to
offer the land back under s 40 and if so, can it rely on the exemptions contained in s 42A and B as reasons for not offering the land back. [186]
Contingent issues [200]
9. Are the plaintiffs’ “successors” entitled to sue as persons entitled to
offers back under s 40? [202]
CIV-2005-404-7095 Claim by RNZFB, Donald McIntosh and Linda Ryan [214] CIV-2005-404-7350 Claim by David McCormick [219] CIV-2006-404-1881 Claim by Patricia Spencer-Wood [229] CIV-2005-404-7351 Claim by Donald Michael Stewart [233]
The remaining claims [236]
Laches [238]
10. Can the Court review or declare the resolution passed by the WCC
pursuant to s 40(2)? [249]
Residual discretion to grant a declaration [264]
Result [268]
Introduction
[1] This case concerns the acquisition of seven different parcels of land in the Te Atatu Peninsula in the Upper Waitemata Harbour, west of the Auckland Harbour Bridge, by the Auckland Harbour Board (AHB) between 1951 and 1959.
[2] The plaintiffs are all descendants from the original vendors of the lands, except in one case, Royal New Zealand Federation for the Blind, which is a residual beneficiary of the estate of a vendor.
[3] The plaintiffs in these proceedings seek declarations designed to force the Auckland City Council (ACC) to offer back the land, being the current owner of the lands acquired by the AHB.
[4] For example, the plaintiffs Williams and Morley seek a declaration that the ACC offer for sale the remaining original land, acquired by the plaintiffs’ predecessors, to the plaintiffs at a price fixed as at 1 August 1983, or such other date as the Court may determine.
[5] The seven original parcels of land are part of the Te Atatu peninsula. The AHB wanted the land for an “Upper Harbour development”. By the 1970s AHB did not want the land for that purpose. Rather, the AHB thought it would be suitable for commercial uses compatible with nearby port development on Pollen Island.
[6] Since the 1950s the land has been partially subdivided and built upon. The balance is now owned by the ACC, developed for the public as open space, part of which is known as the Harbourview-Orangihina Park. The previous owners, after the AHB, were the Waitakere City Council (WCC) from 1989, Waitakere Properties Limited (WPL) from 1995, and the ACC from 2010.
[7] To obtain orders, the plaintiffs rely upon a statutory provision enacted in the Public Works Act 1981, which requires any government agency to offer land held for a public work, but not required for a public work, to be offered back to the original owners or their successors. This is s 40.
[8] The plaintiffs seek declarations as to the obligations of the AHB, WCC, and their successor, ACC to offer their families’ land back, this offer to be at the value of the land when it should have been offered back, as at 1 February 1982 by AHB, 1
November 1989 by WCC, and 15 June 2010 by ACC. Alternatively, all plaintiffs seek the same declaration but as at on or about October 1983. Two of the plaintiffs (Williams and Flavell) also alternatively seek a declaration as at 26 April 1995 by WCC on the occasion of transferring the land to Waitakere Properties Limited (WPL).
[9] Section 40 of the Public Works Act 1981 (PWA) provides:
40 Disposal to former owner of land not required for public work
(1) Where any land held under this or any other Act or in any other manner for any public work—
(a) Is no longer required for that public work; and
(b) Is not required for any other public work; and
(c) Is not required for any exchange under section 105 of this
Act—
the chief executive of the department within the meaning of section
2 of the Survey Act 1986 or local authority, as the case may be, shall endeavour to sell the land in accordance with subsection (2) of this section, if that subsection is applicable to that land.
(2) Except as provided in subsection (4) of this section, the chief executive of the department within the meaning of section 2 of the Survey Act 1986 or local authority, unless—
(a) He or it considers that it would be impracticable, unreasonable, or unfair to do so; or
(b) There has been a significant change in the character of the land for the purposes of, or in connection with, the public work for which it was acquired or is held—
shall offer to sell the land by private contract to the person from whom it was acquired or to the successor of that person—
(c) At the current market value of the land as determined by a valuation carried out by a registered valuer; or
(d) If the chief executive of the department within the meaning of section 2 of the Survey Act 1986 or local authority considers it reasonable to do so, at any lesser price.
(2A) If the chief executive of the department within the meaning of section 2 of the Survey Act 1986 or local authority and the offeree are unable to agree on a price following an offer made under subsection (2) of this section, the parties may agree that the price be determined by the Land Valuation Tribunal. (3)
Subsection (2) of this section shall not apply to land acquired after the 31st day of January 1982 and before the date of commencement of the Public Works Amendment Act (No 2) 1987 for a public work that was not an essential work.
(4)
Where the chief executive of the department within the meaning of section 2 of the Survey Act 1986 or local authority believes on reasonable grounds that, because of the size, shape, or situation of the land he or it could not expect to sell the land to any person who did not own land adjacent to the land to be sold, the land may be sold to an owner of adjacent land at a price negotiated between the parties.
(5)
For the purposes of this section, the term successor, in relation to any person, means the person who would have been entitled to the land under the will or intestacy of that person had he owned the land at the date of his death; and, in any case where part of a person's land was acquired or taken, includes the successor in title of that person.
[10]
Up to
1987, s 40(1)(b) used the standard “any essential work” rather than
“any other public work”. Subsection 3 originally read:
Subsection (2) of this section shall only apply in respect of land that was acquired or taken:
Before the commencement of this Part of this Act; or
For an essential work after the commencement of this Part of this Act.
[11] In each proceeding the plaintiffs say that the subject lands were acquired for a public work, namely harbour works, being the construction of a port or port-related facilities in the Upper Waitemata Harbour, but that that purpose was abandoned before 1 February 1982, the date on which the Public Works Act 1981 came into force.
[12] On that basis, the plaintiffs claim that the subject land should have been offered back for sale to the original owners or their successors, the offer back provision designed to protect public authorities from “land banking”.
[13] In the alternative, the plaintiffs say that the subject lands were no longer required for harbour works by October 1983, when special legislation was introduced to widen the AHB’s leasing and licensing powers in respect of the lands to enable it to proceed with the proposed long-term and large-scale commercial development of the subject lands. AHB confirmed in its Select Committee submission on the proposed legislation that subject lands were no longer needed for the harbour purposes for which they have been acquired and its previous and subsequent conduct was consistent with that position. This special legislation is the Auckland Harbour Board and Waitemata City Council (Te Atatu) Empowering Act
1983 (Empowering Act). It became law on 2 December 1983.
[14] By contrast, the ACC’s position is that this Empowering Act had the effect of displacing any existing obligation under the PWA to offer the land back. As it is a special provision, it overrides the more general provisions of the PWA.
[15] Following the nationwide restructuring of local government in the late 1980s, which led to the disestablishment of harbour boards and the creation of port enterprises on the one hand, and consolidation of local authorities on the other, the Minister of Transport, in 1990, exercising a special statutory power, decided that the land would not vest in the new port company, but rather in the newly constituted WCC.
[16] It is the plaintiffs’ case that the WCC had no clear idea how the land should be developed when they acquired it as from 1 November 1989 and for some years subsequently. They say at this time in 1989 and subsequently, the land should have been offered back to the descendants of the original owners, the plaintiffs in these proceedings.
[17] The plaintiffs seek declarations accordingly as to the obligations of the WCC
and its successor, the ACC as at 1 February 1982, October 1983 and 1 November
1989 and for some years subsequently.
The threshold arguments
[18] The defendant, the ACC, contends that the plaintiffs’ claim must fail for any of a number of reasons. The ACC begin by contending as a threshold argument that the plaintiffs have failed to prove:
(a) That in each case the land was acquired in the 1950s for a public work.
(b)That it was acquired by compulsion or under such threat as to bring s 40 into play.
(c) That if so acquired, it was held for that or some other public work as at 1 February 1982.
(d) That if it was so held that it was not required for that public work on 1
February 1982, as at October 1983, or within a reasonable time thereafter (and in relation to the Williams and Speechlay land, that it was not required for a public work as at 26 April 1995 or within a reasonable time thereafter), then s 40 does not apply retrospectively to land acquired for a public works purpose but no longer held for that purpose prior to the commencement of the Public Works Act 1981.
The defendant reiterates that it is for the plaintiff to prove to the contrary.
The special legislation point
[19] The defendant says that the Empowering Act is a legislative enactment specific to the land and authorised its ongoing use and investigation by the AHB and the WCC for developments which did not need to be confined to essential works (up to 1987), and thereafter to any public works. As a consequence of the Empowering Act, the PWA has no application to the land.
If the PWA applies, s 40(2)(a) was validly determined by the WCC in 1996
[20] The ACC says that the statutory exemptions, especially in s 40(2)(a) of the PWA apply. The Court can and should take into account the current state of affairs and the history during and since the 1980s. Particularly, that the WCC made a valid determination in 1996 under s 40(2)(a) which has not been challenged by judicial review. (It does not apply to the Williams and Speechlay lands.)
The equitable defence of laches
[21] Overlapping all of this, the ACC say that these plaintiffs have no attachment to their land. Their interest is only commercial. Indeed, they have sold their rights to a litigation funder for all practical purposes. On the other hand, the ACC has substantial, indeed, overwhelming public interest in the land being retained for reserves, recreational and community uses. Further, the ACC say the plaintiffs and their predecessors have sat on their rights for over twenty years and it is too late for them to apply for discretionary relief now.
Residual exercise of discretion
[22] The ACC argues that the bone fides of the AHB, the WCC, the Waitakere Council and now the ACC cannot be questioned as at all times the proposed use of this land was discussed openly and covered extensively in the local newspapers. It is now too late to sue and, furthermore, the equitable principle of limitation by analogy to the Limitations Act 2010 applies. That it is not possible now to return the McCormick, Stewart, Kindersley, Smith or Clare lands as they are held as reserve land or are an integral part of subdivision consents for housing development. (As for the latter, the plaintiffs are not seeking the return of any land that has been subdivided for housing.) The former Williams and Speechlay lands are now part of the Harbourview- Orangihina People’s Park, directly in response to strong public opinion and a desire to retain it. The Waitakere Council ratepayers were levied at a special rate for this purpose.
[23] The ACC argues that in relation to the Williams and Speechlay land in particular, the competing interests and prejudice must also take into account the very
tentative (if any) basis on which it is now asserted that the land was acquired under an element of compulsion some sixty plus years ago.
A literal or purposive of construction of s 40 of the Public Works Act 1981?
[24] In Port Gisborne Ltd v Smiler1 the Court of Appeal had an occasion to look at the history of the Public Works Act 1981. The issue in the case was whether or not s 40 required Port Gisborne Ltd to offer a large area of land of approximately 40,000 acres acquired by the Crown in 1879 from the Maori owners, being ancestral land of the hapu of Tuawhareparae.
[25] At that time it was unlawful for private buyers to purchase any interest in the block of land. Rather, the Crown had the ability to acquire land, indeed take it, for both public works and for settlement of immigrants. The Court of Appeal held that s 40 of the Public Works Act did not apply because the Crown did not originally acquire the block for a public work. Rather, the land had been acquired pursuant to s
34 of the Immigration and Public Works Act 1870. The Court of Appeal held:
[18] Unlike the more specific powers of acquisition contained in Part II of the Public Works Act 1876, s 34 was a broad provision enabling the government to negotiate the purchase of land for general purposes. The land has been described as forming part of the “land bank” of the Crown, available to be sold to settlers.
[26] There was at that time an offer back provision in the Public Works Act 1876. That finding of the purpose for acquisition was critical to the dismissal of the application of s 40 of the Public Works Act 1981. It influenced the interpretation of s 26 of the Port Companies Act 1988 where, in s 26, ss 40 – 42 of the Public Works Act should not apply to the transfer of land to a port company but once a port company acquired the land, ss 40 and 41 of the Act would apply as if the port company were a harbour board and the land had not been transferred. To examine the implications of that section, the Court of Appeal returned to examining the true
intent and meaning of s 40 of the Public Works Act 1981.
1 Port Gisborne Ltd v Smiler [1999] 2 NZLR 695 (CA).
[27] Keeping in mind the history already referred to in this judgment, the Court of
Appeal observed:2
Under s 9 of the 1878 amendment (to the Public Works Act 1876) any land “held, taken, purchased, or acquired”, whether under certain specified acts or otherwise howsoever, for government works and not required for such works, could be sold in accordance with s 29 of the 1876 Act. The reason for extending coverage to land “held, taken, purchased or acquired” would appear to ensure that all land which came into ownership of the Crown for government works purposes was covered.
…
The broad principle was that land obtained for those purposes, but which ceased to be relevant to those purposes, should be offered back so as to reconstitute the original private holding insofar as that could be achieved.
[28] The Court went on to say:3
[31] The 1876 Act was replaced by the Public Works Act 1928. Section
35, the offer-back provision, was in similar terms to its predecessor as amended in 1878. Section 35 was amended in 1935, by requiring the land to
be sold either privately to the owner of any adjacent lands, or by public
auction or tender. The consistent intention which comes through is that the offer-back concept is referable to land which has been brought into public ownership for public work purposes.
[32] For the first time, the 1981 Act required the offer back to be made to “the person from whom (the land) was acquired”. It also reduced the words qualifying the land in question to the single concept of “held”.
[29] The Court of Appeal continued to reason from the detail of the law that the offer back provision was only dealing with land held for public works. It should be kept in mind that the Court had found as a fact that this subject land had not been acquired for public works. Relevantly, the Court said:4
… The background to the offer back concept is that land is being acquired from a private person for a public work purpose, possibly under the threat or contemplation of compulsion. The rationale must be that it is only fair, if that purpose disappears, the Court should, so far as practicable, revert to the previous or equivalent private ownership.
[30] The principle reasoning therefore of the Court was that because this land had not been acquired for a public purpose, the respondents would have no entitlement
2 At [30].
3 At [31] and [32].
4 At [35].
under s 40(2).5 That ended the Court’s analysis of s 40 on what it called first approach. It then had three paragraphs on what it called the second approach which allowed for the fact that if a contrary view was taken that s 40 applies for land currently held for a public work when its ownership was not obtained by the holder without any contemplation of a public work purpose, the respondents (Maori descendants of the original owners) still cannot succeed. Subsection (2) requires the land to be offered back to the person from whom it was acquired or to that person’s successor. On a literal interpretation, this would require Port Gisborne to offer to sell the land to the Crown. The Court of Appeal then said:6
We agree that in appropriate circumstances there is justification for disregarding intervening public owners so as to give effect to the intent of the legislation and return the land to its original private owners.
The same sentiment is repeated in the first sentence of the next paragraph7:
Where land has continued to be held by successive public bodies for a public work throughout, the true intent and spirit of s 40 is that the land should be returned to the original owner.
[31] This last sentence can be seen as a repeated theme.
[32] It is no accident that New Zealand’s earliest legislation required the offering back of land which had been acquired for public works but no longer was held for the same. This is because settlement in New Zealand brought with it a constitutional principle that government should not acquire private property except by operation of law and with full compensation. It is a short step to the “only fair”8 consequence that if land is acquired for a public purpose and acquired so legitimately, it cannot then be used for another purpose, but should be offered back. This heritage can be traced to Chapter 29 of the Magna Carta, law in New Zealand by reason of Sch 1 of
the Imperial Laws Application Act 1988. Chapter 29 relevantly provides:
No free man shall be ... disseised of his freehold or liberties or free customs but ... by the law of the land.
5 At [38].
6 At [39].
7 At [40].
8 At [35].
[33] Blackstone in his commentaries in 1765 wrote of the need for legislative
authority, and for “full indemnification and equivalent” of the land taken.
[34] This policy of offer back had a hiatus in New Zealand between 1935 and
1982. As in 1935, s 35 of the Public Works Act 1928 was amended to confer on the agency holding surplus land a discretion to sell it either privately to the owner of any adjacent lands or by public auction or tender. Many local authorities did neither and held on to the land, a practice known as “land banking”.
[35] More relevantly to the issue of a literal or purpose of construction of s 40, the Court of Appeal decision of Smiler demonstrates that the Court of Appeal was ready to make s 40 work, for example, by ignoring intervening public owners and invoking the underlying spirit of s 40 that land no longer required for public work should be returned to the original owner.
[36] In summary, s 40 is directly linked to one of the most important principles of the unwritten New Zealand Constitution, the protection of private property rights. Chapter 29 of the Magna Carta is not just a statute, it collects essential common law principles. For this reason alone, s 40 of the PWA should not be read restrictively but be read purposefully. This is also in accordance with the injunctions of the two
statutes relevant at the time.9
[37] It is with this common law disposition and applying the statutory injunctions that I have scrutinised the issues of fact and law in this case. In summary, the Court proceeds on the basis that if land has been acquired private property for a public work, but is no longer needed for a public work then, it is “only fair” that it should be offered back. Section 40 of the PWA is an application of that principle.
Ordering of issues
[38] There are numerous issues of law and fact in this case. Counsel broadly agreed on the issues but not in the ordering of them. I have decided to deal with the
9 Interpretation Act 1999, s 5; Acts Interpretation Act 1924, s 5(j).
issues in chronological order. This is principally because the tale is best understood told chronologically, and the issues best grasped as they arise over time.
Issues
1. Did the AHB hold the land for a public work?
[39] The AHB was a body corporate. It was:10
… for the purposes and subject provisions of this (Harbours Acts 1923,
1950) and the special Act, capable of purchasing, holding, disposing of and alienating real and personal property and of doing and suffering all other acts and things as body corporate may by law do and suffer. (Emphasis added.)
[40] As a body corporate the AHB did not have the full competence of a person. As a statutory body corporate it had such powers as given to it by any statutory provision, together with any implied powers reasonably implicit from the express statutory powers. As a harbour board it was by statute a local authority.
[41] The setting of this issue pre-dates the liberalisation of the New Zealand economy in the 1980s, the reform of local government in the late 1980s, and the general powers of competence given to local authorities in 2002. It is important to set aside the current mindset influenced by ports being operated as port enterprises and local authorities having powers of general competence, subject only to consultation obligations.
[42] In October 1949, the AHB published in the New Zealand Gazette a “notice of a scheme of development of the upper harbour of Port Auckland”. The Gazette referred to as its authority under s 29(2) of the Finance Act (No. 3) 1944. Section
29(2) of that Act provides:
(2) In the case of a comprehensive public work or scheme of development or reconstruction, the Minister or a local authority shall by notice gazetted and publicly notified state the nature of the works included in the comprehensive public work or scheme and the approximate boundaries of the area affected thereby. The notice shall remain in force for such period as may be specified therein, and for the purpose of any compensation claim arising during that period in respect of any work included in the comprehensive public work or scheme, the specified date for the purposes of
10 Harbours Act 1950, s 17(1).
the last preceding subsection shall be the date of the first publication of the notice. While any notice remains in force as aforesaid, the Minister or the local authority may from time to time by a further notice gazetted and publicly notified, extend the operation of the notice for such further period as he or it thinks fit. For the purposes of this section a government work or a local work may form part of a more comprehensive public work or of a scheme of development and reconstruction which includes both Government works and local works, and any notice under the subsection may include works commenced before the date of the notice, and whether or not after the passing of this Act. (Emphasis added.)
[43] The first schedule to the gazette notice describes the scheme of development and construction in this way:
1. The reclamation of tidal lands.
2.Construction of breastworks, wharves, docks, and other harbour works.
3.The subdivision or resubdivision of lands, laying out and construction of roads, streets and other means of access.
4. Dredging of channels and basins.
5. Provision of areas for industrial works.
6. Provision of areas and facilities for ship repairing.
7. Provision of areas for oil tanks and storage.
8.All harbour and other works necessary for the carrying into effect of the general object.
[44] These works were confined by being within the land described in the second, third, fourth and fifth schedules. Those schedules included the land which is the subject of these proceedings.
[45] About a fortnight later, the AHB wrote to the owners of a number of parcels of land off Te Atatu Road and Harbourview Road in these terms:
Upper Harbour Development
By Gazette Notice dated 10th November 1949, the Auckland Harbour Board has given notice of the work intended to be carried out in connection with the development of the Upper Harbour.
By the same Notice the Board has defined the area which will be affected by such works. As the registered owner of the land described at foot hereof you are notified that such land is included in the area mentioned.
The Board wishes you to understand:
(a) The Gazette Notice mentioned does not purport to take any land;
(b) That if the Board at any time, within the period of 15 years from 25th October 1949, wishes to acquire for harbour works any of the land included in the area then the compensation to be paid by the Board shall not be enhanced by reason of such works.
Yours faithfully,
Chief Executive Officer & Secretary
[46] There was a minor dispute between counsel as to the immediate effect of invocation of the s 29 Notice. I am satisfied that the second sentence of subs (2) (underlined) was law at the time the Gazette notice was made and the letter sent. That sentence was repealed by the Finance Act 1951.
[47] The retrieved AHB files show the addressees to the letter. The owners of the parcels of land which are the subject of these proceedings are all recorded as having received the letters, except Mr J Williams, whose letter was returned unknown.
[48] These owners were neighbours in a rural area. Even without the benefit of evidence of their children and grandchildren, the Court would consider that on the balance of probabilities that the owners would have discussed with each other the extraordinary notice that they had been given: that the AHB intended to carry out works in the upper harbour which is defined to include their land.
[49] Mr Casey argued that weight should be given to sub-cl (b) of the letter as indicating that it was just a possibility that the Board might wish to acquire their land. I think the letter needs to be read as a whole. The first two paragraphs are positive that these works are “intended” and the areas described “will be affected”. I find as credible and reliable the unanimous evidence of the descendants of the then landowners that this communication was regarded by the owners as notice of an intention on the part of the AHB to acquire their lands for harbour works. None of them described any belief within a family that it was just a possibility that the land
might be taken. Later in this judgment I will be referring in detail to the evidence of these witnesses.
[50] The notice included the description of the seabed as well as land. The total area of land and seabed was extensive. As well as the land, the subject of these proceedings, it included land further north also on the Te Atatu peninsula and south to Pollen and Traherne Islands and parts of the Rosebank Peninsula and Point Chevalier. A significant area of the seabed land was immediately adjacent to the land, the subject of these proceedings. This can be seen from a map described as Te Atatu Port Industrial Estate: Possible Development: Concept; dating from 1976.
[51] The land included in the Gazette notice consisted of terrace land, then sloping escarpment land and finally very low lying land, down to the seawater.
[52] Keeping in mind the adjacent seabed being intended to be reclaimed, and the intention to dredge access to the port works, one can readily imagine that the dredging would be used both for the reclamation and for building up of the low lying land and the escarpment so as to create a stable and horizontal platform for the off- lifting and depositing of cargo. This assumption was confirmed to the Court by Mr Brown, an expert planning witness called by the ACC.
[53] Mr Casey argued that this Gazette notice was stated to be for a “scheme of development and construction”, not for a “public work”. Mr Casey argued that items
5, 6 and 7 were not for “public works” as the term is used in the PWA. These were provision of areas for industrial works, facilities for ship repairing and for oil tanks and storage. He submitted that it was a mistake of law to perceive that a harbour board could only acquire land if it was for a public work purpose, that the Auckland Harbour Board Loan and Empowering Act 1946 and the Auckland Harbour Board Loan and Empowering Act 1951 specifically empowered the AHB to purchase land for a purpose that was, or might be other than public works.
[54] The 1946 Act had as its title:
An Act to authorise the Auckland Harbour Board to borrow the sum of
£1,500,000 for the purpose of constructing harbour works.
[55] The Schedule covered a number of items which clearly did not apply to this site, but did include the bulk import wharf and reclamation. In 1951 Parliament amended the Schedule to the 1946 Act, adding a Schedule 3:11
UPPER Harbour development – preliminary survey and purchase of properties.
[56] Section 5 of the 1946 Act provided:
5.All moneys borrowed under and by authority of this Act shall be applied and expended in the construction of the harbour works and for the other purposes specified in the Schedule hereto.
[57] The plaintiffs argued that the phrase “harbour works and for other purposes” fell within the concept of a scheme of development or reconstruction which includes both government works and local works, as that phrase appears in s 29(2) of the
1944 Act. Mr Casey argued that if the intent of that section was that only public works could be the subject of a notice under it, there would be no need to refer to anything more than “a comprehensive public work”.
[58] The defendant’s argument does not accommodate that the Finance Act (No 3)
1944, upon enactment, became part of the Public Works Act 1928.12 If the ACC’s argument is upheld, it has the result that land can be compulsorily acquired for works which are not public works. Such an interpretation is contrary to the constitutional history of both New Zealand and Great Britain, dating from the Magna Carta, which is that compulsory powers of acquisition are given to government bodies only for public purposes. In 1946 – 1950s, it would be unthinkable that Parliament would empower a harbour board to compulsorily acquire land under the PWA for non- public works. Prior to the manifold reforms associated with liberalising the economy from the 1980s, there was a clear divide between private property and public property. Private property could not be compulsorily acquired by government for other private purposes, e.g. to be on-sold to a private person. Since the introduction of state owned enterprises (SOEs) in the late 1980s and local trading
enterprises (LATEs) in the 1990s, that divide has been weakened.
11 Auckland Harbour Board Loan and Empowerment Act 1951, s 6.
12 Finance Act (No 3) 1944, s 28.
[59] In 1944, the definition of public work in the PWA 1928, begins in s 2(a) with this broad clause:
Every work which Her Majesty, or the Governor General, or the government, or any Ministry of the Crown, or any local authority is authorised to undertake under this or any other Act or Provincial Ordinance, or for the construction or undertaking of which money is appropriated by Parliament.
[60] Then the definitions go on in s 2(b) to include “any harbour work”. The underpinning bedrock concept is that Parliament will only vote public finance to local authorities for the public works, as discussed above.
[61] The defendant’s argument overlooks that there is a common failing of Parliaments and other English speakers to use more words than necessary. The fact that the section uses the concept of a “comprehensive public work” as well as “a scheme of development or reconstruction”, both capable of being a mix of central and local government works, does not mean the two concepts cannot overlap and must be thoroughly distinguished one from the other.
[62] Mr Casey argued that at this distance of time, coupled with the lack of detailed information as to the detail of the scheme of development, it is not realistic for this Court to go back and make a judgment as to whether it was wholly for public works. Much of the material relied on by the parties in this case came from archives held by the Maritime Museum, the AHB now being defunct.
[63] The presumption must be the other way. It would be a remarkable, and likely a unique event, prior to the 1989 – 2002 reforms, for Parliament to have voted money or authorised the AHB to borrow money and to acquire land compulsorily for a purpose which was not a public work. To be sure, there is and was then no clear boundary between public and private works. Harbour boards had the power to lease land and regularly did lease land to port users. The important point to keep in mind, however, is that the question is not whether or not the scheme of development naturally fits into a layman’s concept of a public work, but rather, whether or not it is deemed to be a public work by reason of the very broad definition of public work
contained in subs (a) as quoted above, reinforced by the rather general reference to
“any” harbour work.
[64] Implicit in Mr Casey’s argument is the proposition that the AHB must have been labouring under a mistake of law when it gazetted the works under s 29 of the Finance Act (No 3) 1944, anticipating taking the land for these works.
[65] If one keeps in mind the constitutional setting of the grant by statute of a power of compulsory acquisition, and the function of the Finance Act (No 3) 1944 to apply to both (central) government work and local works, the interpretation advanced by the ACC is not a purposive interpretation. It has no merit. Rather, one of the purposes of s 29 was to make it clear that the obligation, not a discretionary power, to give prior notice by gazette, and it was an obligation, and the benefit of having the compensation payable fixed as at the date of the notice, extended to both government and local works. There is absolutely nothing in s 29(2) which would justify the Court drawing the extraordinary constitutional conclusion, that by this section Parliament intended to give local authorities, including harbour boards, the power to acquire land compulsorily at values fixed from the notice, for works which were not public works, rather some inchoate property falling between public property and private property, or to sell on to private users of ports, such as oil companies, and thereby revert to being private property.
[66] At that time, s 5(j) of the Acts Interpretation Act 1924 provided:
(j) Every Act, and every provision or enactment thereof, shall be deemed remedial, whether its immediate purport is to direct the doing of anything Parliament deems to be for the public good, or to prevent or punish the doing of anything it deems contrary to the public good, and shall accordingly receive such fair, large, and liberal construction and interpretation as will best ensure the attainment of the object of the Act and of such provision or enactment according to its true intent, meaning, and spirit:
[67] For these reasons I conclude that the whole of the Upper Harbour development was a public work for the purposes of the Public Works Act 1928 and its successor of 1981. The AHB was intending to purchase this land for a public work. It did purchase the land. Therefore, when the titles were acquired in the
1950s they were land held for the public work of Upper Harbour development. This
latter proposition follows swiftly because there was no statutory power given to a Harbour Board to acquire land for a particular public work, and then hold it for another public work. I say that on the basis that no statutory provision to that effect was drawn to the attention of the Court, and as will later appear in the judgment, were there such a power, it would be likely that there would be a special process if the purpose for which the land were held changed. It needs to be kept in mind, as the statutes have already indicated, that these statutes are providing for the funding of these works, as well as the power to acquire the land.
[68] For the purposes of this litigation, all the relevant land was acquired in the early 1950s except for the land owned by Mr John Williams. That parcel of land was acquired in 1959. Relevantly, there is no evidence against the proposition that the AHB was acquiring the land for the purposes other than those stated in the Gazette notice issued in 1949.
[69] That brings me to the conclusion that the AHB held this land for a public work of Upper Harbour development for port purposes.
2. Was the land required by AHB for a public work in 1982/1983?
[70] There was no significant dispute between the parties that by at least the mid-
1970s the AHB had effectively abandoned the concept of the development of the
Upper Harbour on the subject land.
[71] Rather, if there was going to be an Upper Harbour development it would centre on the nearby Pollen Island.
[72] It was also common ground that the AHB nonetheless was interested in controlling the uses to which the subject land at Te Atatu would be put. The AHB Board foresaw advantages in having industrial and commercial uses which would be suitably adjacent to nearby harbour activity. Although the documents that the Court has seen did not spell it out, it also seems more probable than not, that the AHB had a continuing interest in controlling the land use activities (as activities were referred to in the days pre-Resource Management Act 1991), to ensure that they were
complementary to harbour activities and thus did not raise issues of nuisance, (reverse sensitivity being jargon which only came in with the RMA).
[73] By 1976 this remaining AHB land at Te Atatu was included in an area generally described by the AHB as the “Port Industrial Estate”. The AHB 1976 report records that: “Generally, the higher level land is zoned Industrial B1 which provides for general manufacturing uses” subject to specific conditions to protect the amenities of adjacent residential areas. The lower level lands zoned Port Industrial Estate providing for industries which require a waterfront or water-related site (including bulk oil storage and handling). The AHB 1979 report recorded that the policy was to develop the land as an industrial estate.
[74] Over this time the local rates burden on the land was a concern of the AHB. In June 1976 in that context an internal AHB report recorded:
While the possibility of obtaining some reduction in rating has been raised with the Council legal and administrative difficulties could prevent any reduction being granted thus leaving the Board no alternative but to develop as soon as possible that land not required to be reserved for future port development.
[75] A report by the AHB in February 1979 records that the WCC was expressing concern about the absence since 1949 of any firm proposals for the use of the land and was requiring the AHB to demonstrate the need for an Upper Harbour port, and that the land was required as an adjunct to it. The location of any Upper Harbour port had been identified as Pollen Island, not Te Atatu. The report concluded that it was the Board’s policy to retain the Te Atatu estate for a wide range of uses, including both industry and uses requiring direct water access. However, it did not say that the uses would be carried out by the AHB or under its control. Consistent with this, the AHB proposed to subdivide and lease the land in stages. Part of this proposal was put into effect, in that several sites along Te Atatu Road were subdivided with some being leased.
[76] It is quite clear that by 1979 if not earlier, and certainly by 1982, the land, the subject of these proceedings, was not required for public works of the AHB. Its new name, Port Industrial Estate, bespeaks the concept that it was an industrial estate that
might be built adjacent to Upper Harbour port developments which, if they were to be built as a public work, would be on, and in the immediate vicinity of Pollen Island.
[77] Nor was there any suggestion by either side that the land was required for another essential work prior to 1987, or another public work thereafter. It needs to be kept in mind that at this time there was no equivalent duty to offer the land back, in the then Public Works Act 1928.
3.If the land was not required for a public work is it still held for a public work?
[78] In Waitakere City Council v Bennett the judgment the Court held:13
Whether the subject land is “held … for any public work” at the relevant date is essentially a question of fact and may be a matter of some complexity. (Emphasis added.)
[79] The Court also referred to the requirement to consider:14
… all evidence bearing on the purpose for which the land was acquired; how this was documented and any relevant proclamations, memorials, resolutions, land titles and other written material; and the evidence of what has since occurred.
[80] There is nothing in the Bennett judgment which says that a finding of fact that the land was not required for a public work meant that it was not held for a public work. The reasoning is to the contrary. It is plain from the latter passage above that the Court of Appeal clearly envisaged resolution of whether or not land continued to be held for public work to be a question of mixed fact and law.
[81] Mr Casey argued, no doubt drawing from the same passage, that the fact there is nothing in the nature of proclamations, memorials etc recorded on the subject titles, supported the proposition that the land was not held for a public work.
[82] The simple answer to that proposition is that the statute does not require proclamations to be entered on titles. Section 32 of the Public Works Act 1928
13 Waitakere City Council v Bennett [2008] NZCA 428 at [42].
14 At [43].
expressly empowered any local authority to enter into agreements to purchase land, without complying with the provisions in s 22 of the Act providing for a formal taking, which process provides for objections and ends with the land being taken by proclamation, under s 23. When land was acquired by agreement under s 32, it was nonetheless “deemed” land taken under the Public Works Act 1928:
32 Contracts to take or purchase land for public works –
…
(5) Where an agreement for the purchase of an estate or interest has been entered into, such estate and interest shall be conveyed or surrendered to His Majesty, or (except in the case of roads) to the body corporate represented by such local authority, or (if not incorporated) to some person on behalf of such local authority, as the case may be.
(6) An estate or interest purchased and conveyed or surrendered hereunder shall be deemed land taken under the authority of this Act, applicable in any such case except as specially provided.
[83] Local government, including harbour boards, had at the time no general power of competence and could only acquire and dispose of land when authorised by statute to do so, then in the absence of a specific statutory power, they could not acquire land for public work A, and then require it for public work B, without specific statutory authority. As we have seen on the facts of this case, money could be advanced to acquire land for a particular purpose. The AHB or any local authority then had the obligation to use the funds for that purpose.
[84] The concept of land being “held” is a common law property law concept. There are no absolute property rights at common law. All property rights are by way of character of tenure, coming of course from the French “to hold”. With this concept in mind, it makes perfect sense for Parliament to envisage that land may be held as an authorised acquisition and authorised use for a particular purpose, but no longer in fact required for that purpose. In the long run this would normally generate another local act, or exercise of a statutory power, authorising the change of purpose to ensure that funds were not voted by Parliament for one purpose, but used for another.
[85] Under s 20 of the Public Works Amendment Act 1952 there was a process to be followed where a local authority sought to change the purpose. The local authority was required to publicise the proposal and call upon all persons affected to give them an opportunity to make submissions in opposition.15
4. Was the land compulsorily acquired?
[86] There is no reference in s 40 of the Public Works Act 1981 to acquisition by compulsion being a prerequisite to the application of that section. Therefore, if it is a requirement, it is so by judicial interpretation.
[87] Mr Casey argued that it was a well settled requirement. He cited first the decision of the Privy Council in McLennan v Attorney-General,16 relying particularly on [2] and [34]. By contrast, Mr Carruthers argued it is not a requirement that there is no binding authority to that effect. He argued that the language of the Privy Council in Mr Lennan, refers to compulsory acquisition naturally as it was an undisputed fact in that case, that the land had been compulsorily acquired.
[88] Paragraphs [1], [2] and [34] are as follows:
1.T W McLennan and E D McLennan were respectively the owners and registered proprietors of certain lands which were from time to time compulsorily acquired by the Crown under the Public Works Act 1928 or subsequent legislation. The lands were eventually occupied by the New Zealand Defence Department and were known as Papakura Military Camp. The first appellant (plaintiff) is the successor to T W McLennan within the meaning of the Public Works act 1981 and s 40(5).
2.Sections 40 and 42 of the 1981 Act as amended provide for steps which can or must be taken when land compulsorily acquired is not required for public works. In such a case by sub-section 40(1) the Commissioner of Works (subsequently the designated chief executive of the relevant department) “shall endeavour to sell the land in accordance with subsection (2) of this section, if that subsection is applicable to that land”. Section 40 continues:
…
15 Public Works Act 1928, s 2: Local authority means and includes any City Council, Borough Council, County Council, Town Board, District Council, Regional Council, United Council, river Board, Harbour Board, Electric-Power Board, Education Board, and other Board, Commissioners, trustees, or other persons or body however designated, having authority, under any Act or Provincial Ordinance, to undertake the construction of any public work.
16 McLennan v Attorney-General [2003] UKPC 25.
34.Their Lordships consider that the basic structure of section 40 and section 42 of the Act is clear. (a) Where land is no longer required for the purpose of which it was compulsorily acquired the chief executive must endeavour to sell the land in accordance with subsection 40(2). (b) Subject to certain exceptions set out in the section he must offer to sell the land by private contract to the person to whom it was acquired or his successor. (c) Unless the chief executive considers that it is reasonable to offer a lesser price he “shall” offer it at the current market value of the land as determined by a registered valuer. (d) Unless the offeree accepts the offer within
40 working days or such further period as the chief executive considers reasonable he may cause the land to be offered for sale to
adjacent owners or by public auction, tender or private treaty.
[89] The Privy Council did not have to decide whether compulsory acquisition was a pre-condition to the section triggering. The two issues before it are discussed in [32] and [33] of the judgment. The first issue was whether or not certain offers, having been made by the Crown, but having lapsed, discharge the Crown’s obligations under s 40. The issue is whether or not the Crown had given warning that the statutory time limit for accepting the offers would be insisted upon, and whether or not the appellants had relied upon a representation that the time would be extended. The second issue turned on whether or not the Crown had the power to make another offer, or had otherwise not discharged its obligation under s 40.
[90] Mr Casey submitted that the Court of Appeal in Bennett has positively found the requirement of compulsion before s 40 can apply and that this Court is bound by that decision to that effect. The ACC relies particularly on [33] of the judgment. I would prefer to read that section in the context of [32]-[38] and [95] inclusive:
[32] When enacted, s 40 no longer included the phrase adopted in s 35 of the 1928 Act “any land held, taken, purchased or acquired at any time ...”. Rather, it used the simple phrase “any land held ... for any public work”.
[33] Despite that difference, it has been held by this Court that s 40 is directed to the acquisition of land for public works and continues to apply to land acquired or taken from a private person for public work purposes under compulsion or at least against a background of compulsion: Port Gisborne Ltd v Smiler [1999] 2 NZLR 695 at [35] (CA). This is evident from the terms of s 40(3) which uses the expression “land that was acquired or taken”. The rationale was said to be that it is only fair, if the public work purpose disappears, that the land should, so far as practicable, revert to the previous or equivalent private ownership.
[34] This Court also said in the Port Gisborne case at [35] that:
The Act clearly has no application to land which has been acquired, and is currently being used, for purposes other than public work.
[35] It is common ground that the 1981 Act applies to land acquired or taken before the commencement of the 1981 Act: s 40(3). It is also accepted that the Harbour Board was a local authority under both the 1928 and 1981
Acts.
[36] Mr Casey correctly submitted that the offer-back rights asserted in this case would not be triggered under s 40 as first enacted unless the respondent could demonstrate that at 1 February 1982:
(a) The land was held under the 1981 Act or any other Act or in any other manner for any public work; and
(b) (i) Was no longer required for that public work; and
(ii) Was not required for any essential work; and
(iii) Was not required for any exchange under s 105 of the Act.
[37] If all these matters could be demonstrated, then prima facie the offer-back obligation is triggered subject to:
u
accepted in the statement of claim that by 1 February 1982, the land was no longer required for the public work (port facilities) for which the land had
(a) Any determination under s 40(2), if applicable, that it would be impracticable, unreasonable, or unfair to offer the land to the person from whom it was acquired or that person's successor; and (b)
A belief on reasonable grounds on the part of the relevant authority under s 40(4) that, because of the size, shape or situation of the land, the authority could not expect to sell the land to any person except an adjacent owner.
[38]
Foc
sing on the two prerequisites described in [36] above it is
been acquired or for any other public work or for exchange. It is also
accepted that the land had not been required for the purpose for which it was acquired for some time prior to that date. However the question is whether, in the circumstances pleaded, the land can still be regarded as “held ... for any public work” at that date in terms of s 40(1).
…
[95] In summary, Mr Casey submitted:
(a) Section 40 Public Works Act 1981 applies to land acquired or taken prior to the commencement of the 1981 Act.
(b) For the purposes of this case as pleaded, the respondents must initially satisfy two pre-requisites under s 40 Public Works Act
1981 as originally enacted:
(i) That, at 1 February 1982, the land was held for any public work; and
(ii) At that date, the land was no longer required for that public work, or for any essential work, or for exchange under s 105 of the Act.
(c) The fact that the land is no longer required for a public work does not preclude the possibility that the land may be held for a public work in terms of s 40.
(d) Whether land is held for any public work as at 1 February 1982 is a question of fact requiring consideration of all the evidence bearing on that issue against the relevant statutory background.
(e) Since the statement of claim asserts that the land was held for a public work as at 1 February 1982, that fact must be accepted for strike-out purposes.
[91] The Court of Appeal in Bennett was considering an appeal from the judgment of Williams J reviewing a decision of Associate Judge Faire who refused to strike out the proceeding. The argument before the Court of Appeal was that s 40 did not have retrospective effect, and so did not apply to the land. That was the point decided by the Court of Appeal. In [33] the Court did not repeat that requirement in [36], nor more pertinently in [95].
[92] I think there is a simple explanation for the frequent and almost invariable references to compulsory acquisition when applying s 40, which is that land however acquired, even by sale and purchase agreement, after a notice of taking has always an element of compulsion. This was explained by Tipping J in Bowler Investments v
Attorney-General.17 There were two issues in that case; the first being whether or
not the property had to be offered back to a corporation, and the second was an examination of the grounds upon which the Commissioner can determine that a prima facie entitlement to have the land offered back was not to be acted upon in a particular case. The Judge was examining particularly the standard of unreasonable or unfair to offer back, as appearing in s 40(2)(a). So this is not a case in which a question of compulsion was contended to be an essential element before the duty to offer back applied. This was a case where the property was acquired by a memorandum of agreement in which the property owner agreed to sell the land, or to
its taking by proclamation. As it happened the latter means was used. The argument
17 Bowler Investments v Attorney-General HC Christchurch CP320/86, 18 November 1987.
before the Court was that the Commissioner had good reason not to offer it back because it was not taken by compulsion. The Commissioner of Works Property Manager relied on the fact that Bowler Investments had given reasons other than the designation behind the company’s desire to sell.
[93] Tipping J accepted the submission of Mr Milligan that while there are different methods whereby land can be taken or acquired by the Crown or otherwise for a public work, all three: taking by agreement, compulsory taking and taking by conventional purchase “lead to the land being held by the Crown for a public work”.18 Tipping J relevantly said:19
All these three lead to the land being held by the Crown for a public work. Indeed, in the 1981 Act a reference to Part II dealing with acquisition of land for public work, demonstrates that the emphasis is now on acquisition by agreement, if such can possibly be achieved.
[94] In the course of that hearing the Court took judicial notice of that practice to acquire by agreement. Tipping J went on:20
While I accept Mr Parker’s submission that the Commissioner or his delegate is entitled to look at all the circumstances, both of acquisition and otherwise, in determining whether it is unreasonable to offer the land back, I am concerned that the guidelines do appear to place the element of compulsion in the original acquisition in an erroneous light.
It might well be possible to find a case where, there being no element of compulsion, it could be regarded as unreasonable to offer back, but it does not seem to me to be right to adopt the stance that the absence of any element of compulsion leads ipso facto to the proposition that it is unreasonable to offer the land back to the original owner.
[95] In Bowler, at the time of the agreement, no formal designation of the land for the Northern Motorway had taken place. There was a subsequent Gazette Notice. However, the Judge found as a fact that the Crown must have been satisfied in 1967 that it was proper to expend public moneys on the acquisition of the land.21 Then the
Judge said:22
18 At 11.
19 At 11.
20 At 11.
21 At 14.
22 At 15.
The case falls, in my view, into that category … where an owner sells to the Crown because the prospect of a public work has denied him a market. He is, in a sense, compelled to sell to the Crown.
While I do not overlook the fact there is no formal designation, it seems to me that in substance if the market is anticipating the designation the property is thus unsaleable, no material distinction should be drawn on the basis that a formal designation has not yet been imposed. (Emphasis added.)
[96] On the facts of Bowler, the owner of the property had been unable to sell the property after designation and declared that he believed this was because it was likely to be affected by the proposed Northern Motorway. Indeed, one prospective purchaser who had signed an unconditional contract backed out when she ascertained the effect of the proposed motorway. This was the context within which the Judge made the finding that in substance if the market is anticipating the designation, the property is thus unsaleable.
[97] This is a normal circumstance not peculiar to Bowler. Normally the market for land in New Zealand is competitive. There will be multiple sellers and multiple buyers for the same category of property. Both buyers and sellers are choosing the time in which they want to buy or sell. Sellers are competing with other properties on the market. Buyers are competing with each other for the properties they want. Sellers are able to choose between competing offers. Sales between such sellers and buyers establish market value.
[98] Where formal notice has been given that a property is to be taken for a public work, the competitive market disappears. There is, for all practical purposes, only one buyer – the government or local authority. The otherwise complete freedom of the vendor to choose the time to sell property has, at the very least, been constrained, if not gone. The ability to force buyers to compete has gone. The derivation of the consideration, which has to be current market value, becomes academic and is usually determined by valuation from comparable sales.
[99] The reason why there are no other prospective purchasers is that the only long-time use of the land is for the public work. The present use and any interim uses are only short term. In that context, while the agreement for sale and purchase of land intended to be taken for a public work can be said to be a voluntary contract,
and in that sense not compulsory, it is in a broader sense compulsory because the vendor has only one person to sell to and a limited timeframe within to sell.
[100] With respect, Tipping J’s judgment is facing the realities of the position which is commonplace in acquisitions of land for public purposes. Once the market knows that the Crown intends to acquire land compulsorily if necessary, it is not possible for the owner of the land to sell in the normal way. Normally there is no commercial incentive for a person to buy land which is likely to be taken in the near future by the Crown compulsorily if an agreement cannot be reached. The effect of a notice to take or clear intention that that is likely, is to force the owner to negotiate an agreement with the Crown. That is what normally happens.
[101] Tipping J also went on to say in the course of his examination of the
Commissioner’s guidelines:23
It is noteworthy that the expression “there has been no element of compulsion” when put conversely suggests a sale to the Crown which has been a purely voluntary one. Even if such were the case I cannot see that as being a complete bar nor in the present circumstances do I regard the sale to the Crown as being completely voluntary.
[102] For these reasons I reject the submission of the ACC that the law requires proof by the plaintiffs that their land was acquired compulsorily by the AHB as a precondition and essential element in establishing a cause of action for a declaration that s 40 has been breached and that there should have been an offer back. Once the AHB gave notice, the subsequent sales – all to the AHB – were not market sales, and would have had an element of compulsory acquisition.
5.Were the properties, the subject of these proceedings, in fact compulsorily acquired?
[103] Notwithstanding my finding that this is not an essential element, I go on to make findings of fact as to whether the lands were compulsorily acquired, and to what degree. I do this for two reasons. First, in case I am wrong on the law, and in my competitive market analysis, and the Court of Appeal in its decisions in Smiler
and Bennett has held that it is a necessary element. The second reason is that all
23 At 16.
counsel agreed that the degree of compulsory acquisition or lack thereof is a relevant consideration when applying the criteria in s 40(2)(a).
[104] The ACC submits that each one of these purchases should be considered separately. I will do that but it is important that the individual transactions be examined in their common context. The context has largely been set out in the analysis so far. But to sum up, all but one of a group of landowners of rural land on the Te Atatu Peninsula in 1949 received written advice from the AHB, giving notice of work intended to be carried out on their land, with the development of the Upper Harbour. They were then advised that the Gazette Notice mentioned does not purport to take any land, so they were told that the land has not yet been taken. They were then advised that the AHB can at any time within the period of 15 years acquire the land, in which case compensation to be paid by the AHB will not be enhanced by reason of the proposed harbour works. If they had taken advice from their solicitor at the time they would also have been told that by reason of the wording of s 29(2) of the Finance Act (No. 3) 1944, being the section relied on in the Gazette Notice, the value to be paid by the Board would be the value as at the date of notice, 16
November 1949, even if the land was acquired many years later within the 15 year period.
[105] On 17 April 1950, the AHB resolved that the property owners be advised that if the AHB decided to acquire any of their property, the AHB would pay the real value thereof, and such value would not be related to 1949 values, and would also pay for any present or future improvements on the properties. It is presumed that advice was given.
[106] On 19 January 1951, the AHB wrote to a number of the subject owners, Messrs Smith, McCormick (JJ and A), Stewart, Clare (CV and N) and Mr Kingsley, advising them that the AHB was to proceed with the acquisition.
[107] Subsequently the AHB entered into agreements for purchase from all the property owners. Secondly all the transfers were done by ordinary conveyancing and no notice was entered on the title of the land being taken under the Public Works Act 1928. Thirdly, there is no evidence at all that the AHB ever had to compete on
the market to purchase the properties, such as buying at auction or dealing with a real estate agent retained by the owners to sell on the open market.
[108] In that sense the acquisitions fall into the normal pattern of which this Court, and Tipping J in Bowler, takes judicial notice that acquisitions of land required for public works are usually by agreement for sale and purchase. The formal route of taking is rarely embarked upon.
[109] Notwithstanding this context, the ACC pursued the argument that these agreements were voluntary and unaffected by the prospect of the land being taken by law, whether or not the landowners agreed.
Each acquisition
The purchase from the Clares, claim by Royal New Zealand Foundation for the
Blind McIntosh and Ryan claim – CIV-2004-404-7095 (Clare land)
[110] The owners of the land at the time were Charles and Nellie Clare. On 13 July
1950, their solicitor wrote to the AHB in these terms:
CV and N Clare Upper Harbour Development
We act for the abovenamed who own the land in cert of title 360/150 which may possibly be affected by your Upper Harbour development scheme.
We enclose a copy of their subdivisional scheme and also a letter addressed to your Mr Taylor offering the land in terms thereof.
Our clients are indifferent as to whether or not the land is acquired by your Board; however, they are concerned in obtaining an early decision for (failing purchase by the Board) they wish to take advantage of the present buoyant market for vacant sections.
[111] The ACC presented this letter as showing no evidence of compulsion. I disagree. They are tendering a subdivision scheme of their land. They are not proceeding with that subdivision plan. They are not going to the market to look for buyers interested in subdivisible land in the face of advice by the AHB that the Board will decide sometime in the next 15 years whether or not to take their land. They are seeking an early decision, that is now. If the Board decides not to take their land they can go ahead with a subdivision or market the land as subdivisible . If the Board does decide to take their land they can get a price now. There is nothing in the
letter which suggests they have the present freedom to go to the open market or to proceed with subdivision indifferent to the position that the AHB may take.
[112] Mr Carruthers submitted that offering to sell the land at the earliest possible date was simply an astute commercial decision and that the scheme of subdivision may well have been simply a good negotiating tactic to demonstrate the present value of the land by reference to its highest and best use. I agree.
[113] Mr MacIntosh gave evidence as a great grandson of Charles and Nellie Clare. Mr MacIntosh was born in 1951, but could recall visits from his great grandfather in the late 1950s and onwards and family discussions about the sale of the land. He gave evidence of a sense of a “sense of resentment in the family about losing their Te Atatu land even though I was only a child at that time, I remember very clearly that when talking about the sale of the land my great grandfather said he had no choice, and that the land had been taken by the Harbour Board under the PWA”. Mr MacIntosh presented as a straightforward gentleman who had for many years run two family businesses, which owned a reasonable amount of commercial property. He is an experienced man of commerce. He said that had the land been offered back at any stage, his family would certainly have had discussions with the residuary beneficiary of his great grandfather’s estate, the Royal New Zealand Foundation of the Blind, with a view to coming to some arrangement which would have included the foundation “purchasing our interests in the land”. In 1983, he and his family were reasonably wealthy.
[114] As the reader will find, Mr MacIntosh’s recollections coincide with the recollections of many other descendants of the original owners, who considered they had no choice but to deal with the AHB. There was also evidence, to be noted shortly, that the owners had met to discuss the issue and had an informal meeting.
[115] I have dealt with the Clare land first because Mr Clare, a very experienced businessman and a wealthy man in his own right, was the first to approach the AHB and may have taken his initiative before these more general discussions between all the owners. One fact which is more probable than not is that upon receipt of these notices in 1949, before 1950, the landowners would have talked about it among
themselves as they were in a common predicament, and lived in a rural area which of its nature requires neighbourliness.
[116] I find that at the very least there was at least the degree of compulsion as explained by Tipping J in Bowler, and second that but for the notice, had Mr Clare intended to sell his land, he would as an experienced and wealthy businessman gone to the open market not just dealt with one potential buyer.
Flavell and Hensley (Speechlay Land) CIV 2005-404-431
[117] On 23 August 1950, Mr Speechlay wrote to the AHB stating that he was desirous of selling his property and asking if the AHB required the property. The finance committee of the AHB resolved on 26 September 1950 that the AHB’s solicitors be instructed to enter into negotiations. The Council argued that this was before the AHB had decided that it would acquire any of their land. The formal motion that the AHB take the necessary action was not passed until 19 December
1950. However, the resolution does not suggest, as was the submission to this Court, that this was a new decision to acquire the land. The resolution reads:
Te Atatu area that, as this area is required for the Board’s purposes, the Board proceed with the acquisition of the Te Atatu lands which are (illegible) to the stay order and for that purpose the Chairman be authorised to open negotiation with the owners forthwith and valuation and (illegible) valuation options and take such other action as may be necessary subject to the actual purchase of any lands being submitted to the Board for approval.
[118] The motion was amended to insert the word “immediately” and was carried. As a result of that resolution, another letter was sent to all the other owners except Mr Speechlay and possibly the Clares in these terms:
Upper Harbour Development
The Board by Resolution dated 19th December, 1950, decided to proceed with the acquisition of your land, which in common with other lands at Te Atatu, is the subject of the Stay Order.
The Board is anxious to avoid the expense which would be incurred by both parties if the land were taken under the PWA.
Mr Stace Bennett, therefore, has been instructed to call upon you with a view to an amicable agreement being arrived at as to price.
It is acknowledged that any purchaser not be subject to the jurisdiction of the
Land Valuation Court.
Yours faithfully
[119] A descendant of Mr Speechlay, one of his daughters, Mrs Flavell, gave evidence. She was born in 1931 so about this time was about 20 years old. She gave evidence of remembering her father talking about the AHB freezing the value of the land and he talked about how what he could do with his land was limited. She recalls her father being notified the land was required for upper harbour development and that she said he was quite distraught about having to sell the farm, that it knocked the stuffing out of him. Her evidence was that the very impression she had is that he felt he had no choice about selling it to the AHB, that it would be taken by the AHB if he did not agree to sell it. She gave other evidence of what his plans would have been if he had not sold the land to the AHB. The family appeared to have been reasonably wealthy.
[120] In 1983, Mrs Flavell and her husband owned a 14 acre farm block with a brand new house on it, freehold, and a two-bedroom apartment in Ellerslie and had cash in the bank. These assets were acquired following sale of an inheritance to her sister and herself of a block of four shops in Herne Bay Road, Ponsonby, as well as her mother’s house in Mt Albert. Mrs Flavell presented in evidence as an elderly lady in her eighties and a reliable witness. Nothing in her evidence surprised me. It confirms the probabilities of the situation, given the context. Again, I find in respect of this acquisition that there was an element of compulsion, as explained in Bowler.
J A Robertson and Ors CIV-2005-404-77348
[121] There was an agreement for sale of the Smith land on 29 August 1951. Following the resolution of the AHB to proceed with the acquisition of the land and the letter, the AHB’s purchasing agent, Mr Stace Bennett, appears to have made contact with Mr Smith, and Mr Bennett’s reported to the AHB on 25 May:
This is an attractive property an owner asking £15,000 negotiations continuing.
[122] The sale agreement was reached on 29 August 1951.
[123] The granddaughters of the late Mr Smith gave evidence in these proceedings. They told the Court that their grandfather ran the property as a dairy farm and also owned a poultry farm on a three acre block down the road. Quite often during the weekends the girls used to go out to the farm because they kept horses at the poultry farm. They told the Court remembering their parents and grandparents talking about the AHB’s intention to take the dairy farm for a port at Te Atatu and that they were all very unhappy about it. It was a frequent topic of conversation. They also recalled that their grandfather had been discussing with neighbouring landowners, and gained the impression that none of them wanted to sell either. The daughters were in their teens at the time. All three were straightforward witnesses, and again their evidence came as no surprise to the Court.
[124] I find on the probabilities that again, following Bowler, that there was an element of compulsion in the sale and more significantly, there was no choice but to deal with the AHB, now that the AHB had made it quite clear that they were proceeding to take the land compulsorily if an amicable agreement was not reached.
[125] The three daughters gave general evidence that the family had significant assets in 1983, plus of course there was the residuary beneficiary, the Royal New Zealand Foundation for the Blind.
The McCormick sale CIV 2005-404-7350
[126] This land was sold on 12 December 1951. In October, Mr Bennett had reported to the AHB that he had had numerous interviews, he understood the family had two valuations but could not agree among themselves as to price. Mr David McCormick, the great grandson of the owner, gave evidence. He did not favour the Court with his age, but advised that at the time the AHB wished to acquire the land he was a young teenager. His knowledge was derived mainly from conversations with his mother. He knew that the members of the Ryder family were very opposed to having to sell the land to the AHB.
[127] At the time of the sale, his grandfather had died and the matter was in the hands of the family via his Uncle Joe who was a trustee of his father’s estate. He understood the general feeling in the family was that land values in Te Atatu had
been going up for a long period and showed no signs of slowing. This plaintiff had always felt aggrieved about the land being taken for harbour purposes, and when the land passed from the AHB to the WCC in 1989/90, he took legal advice and alerted the Council to the family’s claims under the PWA. I will deal with this part of his evidence later in the judgment.
[209] The first underlined passage is a quote from s 40(5). The second underlined passage is a liberal interpretation of that text. Such an interpretation is necessary to give the statutory provision effect. This is because it is inherently unlikely that the vendor owner will have bequeathed land he or she no longer owns. It is necessary then to assess a class of persons intended by Parliament to benefit from the offer
back. The Court of Appeal has collected as a class the “immediate beneficiaries”. I
39 Port Gisborne Ltd v Smiler, above n 1, at [45].
read that as the persons benefiting under the will of the former owner or on his or her intestacy. But excluding beneficiaries of those beneficiaries.
[210] I have analysed much of the Court of Appeal’s judgment in Smiler earlier in this judgment. I have had occasion to observe there that the Court understood s 40 as giving effect to a principle of “right and fair” that the land should be offered back if it is no longer required for public works.
In Mark v Attorney-General,40 Mallon J held:
The person to whom an offer back is to be made under s 40(2) is “a person from whom it was acquired or … the successor of that person”. The term successor is defined in s 40(5). The relevant part of that definition is that a successor “means a person who would have been entitled to the land under the will or intestacy of that person had he owned the land at the date of his death”. Thus, the term “successor” is confined to the original owner’s immediate beneficiaries (the definition is discussed in Port Gisborne Ltd v Smiler [1999] 2 NZLR [45]).
[211] I note the cautionary last sentence of the Court of Appeal in Smiler41:
In making these observations, we are not to be taken as expressing any views in relation to the particular facts of this case.
[212] The only reliable way to find the meaning of a statute is to apply it to a set of facts. So far, therefore, I make these preliminary considerations:
(a) I do note again that the text of s 40(5) cannot be applied literally when the whole title has been acquired. Rather, the Court of Appeal has substituted a test of “immediate beneficiaries”;
(b)The plaintiffs’ suggestion that the offer back can be the entitlement of the personal representatives of an eligible successor maybe an attractive application of s 40(5) but is not mandated by the dictum in
Smiler.
40 Mark v Attorney-General HC Wellington CIV-2002-485-799, 27 October 2009 at [165].
41 At [35].
[213] Against these preliminary considerations, I turn to the particular facts and issues arising in each of the causes of action in this case.
CIV-2005-404-7095 Claim by RNZFB, Donald McIntosh and Linda Ryan
[214] The will of Charles Clare contained the following provisions:
(a) A life interest to his daughter-in-law, who died in 1976 (before any offer back obligation is pleaded);
(b) A life interest to his granddaughter, who died in 1994;
(c) A life interest to his great-grandchildren, Mr McIntosh and Ms Ryan who are plaintiffs in this proceeding; and then upon their death and residue to the Royal NZ Foundation for the Blind.
[215] Mr Clare made his will in December 1967; after the property had been acquired. The ACC’s submission is:
Mr McIntosh and Ms Ryan claim to be successors in terms of s 40. However, their only interest under the will of Mr Clare is as contingent life tenants. If the land had remained in the estate they would have been entitled to income from it, but not to the land itself. As such, they were not entitled to have the land offered to them. Only the Blind Foundation, is the remainder after the life interest, can be properly described as “entitled to the land” in the event that s 40 applies at all.
[216] Mr McIntosh and Ms Ryan are “immediate beneficiaries” as I have understood the phrase in Smiler.42 It is completely hypothetical to assume that if the land had not been acquired by the AHB, it would not have been left to the owners’ grandchildren. They were clearly contemplated by him as immediate beneficiaries and he might have left the land to them.
[217] I do not think any great difficulty arises in accepting the plaintiff ’s argument that all three of them are successors in terms of s 40(5), being persons who would have been entitled to estates of interest in any real property under the will or
intestacy of the person from whom the land was taken, had he owned the land at the
42 Port Gisborne Ltd v Smiler, above n 1, at [35].
date of his death. By the terms of the will of which we have only an extract, the life interest is expressed as an entitlement to the net income arising from the whole of the residuary estate.
[218] For these reasons all three have standing to sue.
CIV-2005-404-7350 Claim by David McCormick
[219] The original owner of the McCormick land died on 14 May 1948. Under his will dated 1941, all his estate was to be sold and distributed to the beneficiaries. He appointed his brother, Joseph McCormick as his executor and trustee. The proceeds of the sale of the land were to be divided into four equal parts and distributed to his three surviving children, and the family of his deceased son John. Mr David McCormick’s claim is that he is the only surviving member of that family, and therefore the only surviving beneficiary.
[220] The ACC submits that the acquisition by the AHB of the McCormick land in
1954, did not therefore deprive the beneficiaries of any interest to which they would otherwise have been entitled, that the purpose of s 40 is to return land to owners who would otherwise continue owning the land had they not been required to sell it to the local authority at a specific point in time.
[221] As discussed above, the ACC reliance on the text of s 40(5) has been displaced by the Court of Appeal’s liberal interpretations to read it as including all immediate beneficiaries. Mr David McCormick falls within that test.
[222] In the course of argument I put it to Mr Casey that a will creates a trust upon the death of the testator, and that there will be nothing to stop the McCormick family applying to the High Court in its inherent jurisdiction and pursuant to its statutory jurisdiction under the Trustee Act, for a scheme of arrangement whereby the land would be acquired on an offer-back, and then resold and distributed or held as the case may be. Mr Casey reiterated that the interpretation of s 40(5) is that persons entitled to offer back must receive that entitlement under the will or intestacy, and there is no room to extend the meaning to allow for the way an estate can be
managed, including varied, with the consent of the beneficiaries and the Court’s
consent provided for children and unborn.
[223] I find this argument unappealing on the merits. Although it is not clear, we can presume that the original owner of the land in 1941 had no intention of disposing of his capital to the disadvantage of his three surviving children and the family of his deceased son John. Before he died in May 1948, owning this land, he would have had the expectation that the benefits of it and the value of the proceeds of sale would be divided amongst his children. In that sense they remained successors of his estate, certainly are immediate beneficiaries of his estate.
[224] David McCormick, by virtue of cls 5 and 8 of the will had (with his sister Bernadette) a contingent entitlement to part of the capital of the estate provided he attained the age of 21 years. Subsequent to the sale of the land to the AHB, David McCormick’s contingent interest (apart from the trust for his maintenance as a child), matured to an entitlement to part of the estate’s capital when he attained the age of 21 years. Accordingly, it was submitted that the correct view is that David was a contingent beneficial owner of the land at the date it was sold; that the nominal ownership of Joseph McCormick as trustee needs to be ignored if any sense is to be made of the words “person from whom it was acquired”, applying Smiler.
[225] The reality is that the persons from whom the land was acquired were the beneficial owners of it. For example, if all the beneficiaries were adults they could have united and required the trustee not to sell the land.
[226] David McCormick, it was pointed out, is not claiming all the land for himself but for the purposes of a deed of family arrangement made in April 2009. In a substantial sense, the Court is invited by the plaintiffs to conclude that the beneficiaries of the will were the owners in a substantive sense, of the land at the date it was sold to the AHB, and thus were the persons from whom it was acquired in terms of the language of s 40 of the Act.
[227] I agree with the analysis of the plaintiffs. I think it accords with the purpose of the Act. It is consistent with Smiler. In this case the Act should be given a
purposive construction, especially because of the importance of limiting the power of government to acquire private land for one public purpose and then using it for another purpose for which Parliament has given no authority.
[228] For these reasons David McCormick has standing to bring these proceedings.
CIV-2006-404-1881 Claim by Patricia Spencer-Wood
[229] This is the claim in respect of the land known as the Kindersley property. Mr Kindersley died on 9 July 1984, after the first date (1983) when the plaintiffs say the land should have been offered back. By his will, made in 1979, Mr Kindersley provided that his entire estate be left to his wife; Mrs Spencer-Wood was only to benefit if her mother predeceased her father. Assuming that s 40 applied, the ACC submitted that the Court must determine who was entitled to have the land offered to them at the date that the obligation arose, there being two dates pleaded, August
1983 and April 1985. In August 1983 the original owner was still alive and any claim in relation to that date was personal to Mr Kindersley and could only be pursued by his estate. By April 1985, Mr Kindersley had died, so his successor was Mrs Kindersley. The plaintiff therefore is not a successor and her claim accordingly must fail.
[230] Mrs Spencer-Wood was a contingent beneficiary under the will. In that sense she was in contemplation of the owner who sold to the AHB. She was an “immediate beneficiary” applying Smiler, albeit contingent. As originally noted, the last sentence of [35] in Smiler may be a qualification. The issue of the duty to offer back has arisen after the death of her mother. I consider that Mrs Spencer-Wood satisfies the Smiler test, as an immediate beneficiary.
[231] I note the different route taken by counsel for the plaintiffs, which was that up to the time of Mrs Kindersley’s death she was entitled to receive an offer back, and on her death her right to an offer in the absence of anything to the contrary in the statute, passes to her personal representative. He was an English solicitor who is
now deceased. But the Court will not permit a proceeding to fail for want of parties. In Taylor v McDougal, Henry J said: 43
Two clear principles seem to have emerged and they are firstly that the Court should never dismiss an action for want of parties…
[232] The plaintiff’s counsel also relied on High Court Rule 4.56 which enables a joinder of a plaintiff or defendant if the person ought to have been joined. So that all that is required in this case if joinder is required at all, is the joinder of the personal representative who stands in place of the person to whom the offer ought to have been made. The beneficial right to receive the offer has passed to Mrs Spencer- Wood. The argument of the plaintiff ’s counsel then becomes pragmatic and says given Mrs Kindersley’s beneficial interest, it does not matter whether the right to sue is of her personal representative or passes to Mrs Spencer-Wood as the relevant beneficiary.
CIV-2005-404-7351 Claim by Donald Michael Stewart
[233] Donald Erskine Stewart died on 30 August 1985. He was alive as at both the dates pleaded by the plaintiff in the Stewart proceeding when the land should have been offered back. The ACC argued as before that any right to have the land offered back was personal to Mr Stewart, and does not survive his death. There is no need to explore who his successors are.
[234] The plaintiff, Donald Michael Stewart is a beneficiary of Donald Erskine Stewart under his will. The ACC disputes he is a “successor” under s 40(5) because his father was alive on the dates pleaded.
[235] The purpose of the Act should not be defeated by a lapse of time in which the person who should have received an offer back dies. On this view, Councils could all simply refuse to make offers back, wait until the current owner or their first successor as the case may be if the owner has died, and then be relieved of any responsibility under the law to make the offer back. It is hard to imagine a more hostile interpretation of a statute. The plaintiff is an immediate beneficiary on the
Smiler test.
43 Taylor v McDougall [1963] 1 NZLR 694 (SC) at 695.
[236] I conclude Mr Donald Michael Stewart has standing to sue.
The remaining claims
CIV-2005-404-4280 Claim by Charles Williams and Jean Morley (the Williams land) CIV-2005-404-4351 Claim by Inez Flavell and Leslie Hensleigh
CIV-2005-404-7348 Claim by Janice Robinson, Jillian Clark and Rosalie Nayland
[237] The defendants accept that the plaintiffs in these proceedings would be successors in that term in s 40 if that section is applicable. So there is no dispute as to the standing of these plaintiffs.
Laches
[238] The High Court has an inherent jurisdiction to declare the law. That jurisdiction is confined to be used to resolve genuine disputes and to be exercised with a residual discretion. There is no comprehensive list of all the factors that can be taken into account. All government bodies, central and local, have a duty to exercise their powers in good faith and for their proper purpose. For that reason, it is usually sufficient, and in the case of the Crown always, for the Court to declare the legal obligations pertaining to a matter before local government.
[239] Government, either central or local, can be presumed by the Court, to act upon that declaration of law, or take the matter on appeal if it wishes to challenge it. In the long run to act on whatever is the final declaration as to the obligations of government in a particular contentious matter.
[240] It is agreed by counsel that a declaration in this context operates, in fact, like an injunction. An injunction is a remedy of equity. All equitable remedies are discretionary. One of the discretionary factors to be taken into account is whether or not there has been unacceptable delay on the part of the plaintiff in applying to the Court for a remedy. This unacceptable delay is given the old French Norman word of Laches. As the Privy Council once summed it up, laches is “inaction with one’s
eyes open”.44
44 Lindsay Petroleum Co v Hurd (1873-74) LR5 PC 221 (PC) at 237.
[241] The defendant ACC in these proceedings has asserted laches against the plaintiffs. For the Court to become interested in that defence, it is necessary for it to find that the plaintiffs or their predecessors, knew that they had an argument that s 40 was not being given effect to, but took no steps to bring it to the attention of the relevant officials, or to commence proceedings in the High Court.
[242] In considering a discretionary matter such as laches, the Court is following the legal method of equity. Equity requires he who comes to equity, to do equity. Accordingly, if the party pressing laches is also guilty of delay, or of some error which has contributed to the plaintiffs’ delay, the assertion of laches will fail.
[243] Were the defendant in this case the AHB, or were the ACC responsible for delays on the part of the AHB, then that would be a very material consideration, if it were found that the AHB as successor to the WCC, as successor to the AHB, accumulated all the failures of those three bodies in taking action.
[244] I have found that s 40 did not apply to the land from the time of the coming into effect of the 1983 Empowerment Act. The ensuing analysis assumes that finding is wrong and that the land continued to be held by the WCC and by the ACC for a public work, namely Upper Harbour development, but was not required for that public work from about 1976, and that it should have been offered back to successors of the original owners from whom the land was taken from 1 February
1982 when the PWA 1981 came into effect.
[245] There were two written protests, the first by the McCormick family in 1996 which was rebutted by the Auckland Council arguing that the complainant was not a successor because under the terms of his grandfather’s will, the land holdings of the original owner were to be sold.
[246] In the course of this judgment I have found that that reasoning was an error of law, but it hardly lies for the Auckland Council to complain that the McCormick family should not have accepted their protest to jurisdiction, but to continue to pursue the claim.
[247] The second complaint was the letter written in 1989 by Mrs Williams. There is no record available as to how that letter was processed within the AHB. It needs to be recalled that 1989 was the year in which the lands in question were transferred by the Minister from the Port Establishment Unit to the WCC. It may well be the topic was simply of no interest to the AHB at the time, the AHB considering its effect almost spent and the matter to be taken up by either the Port Company or a local authority, depending on to whom the land was transferred.
[248] Otherwise there is no indication that the plaintiffs or their predecessors grasped that there may have been breach of the PWA by the AHB, WCC or ultimately the ACC. The conduct was therefore not laches as it was not, “delay with eyes open”. Accordingly, the laches argument is dismissed.
10. Can the Court review or declare the resolution passed by the WCC
pursuant to s 40(2)?
[249] Section 40(2) of the PWA provides:
(2) Except as provided in subsection (4) of this section, the chief executive of the department within the meaning of section 2 of the Survey Act 1986 or local authority, unless—
(a) He or it considers that it would be impracticable, unreasonable, or unfair to do so; or
(b) There has been a significant change in the character of the land for the purposes of, or in connection with, the public work for which it was acquired or is held—
shall offer to sell the land by private contract to the person from whom it was acquired or to the successor of that person—
(c) At the current market value of the land as determined by a valuation carried out by a registered valuer; or (d)
If the chief executive of the department within the meaning of section 2 of the Survey Act 1986 or local authority considers it reasonable to do so, at any lesser price.
[250]
In this cont
ext, the task is given to the local authority itself, not the chief
executive of the local authority.
[251] In April 1996, the corporate solicitor and secretary of the WCC prepared a memorandum, being a summary of the position on the occasion of a meeting to decide whether to transfer the undeveloped balance of the lands to WPL. The land would be applied for the purpose of laying out, forming and vesting roads and the subdivision of the remaining lands into residential housing and building allotments and associated public reserve and recreation areas.
[252] The corporate solicitor and secretary’s memorandum was an analysis of how the land was acquired “by agreement” by the former AHB, and vested in the WCC since the local reorganisation in 1989 “free of any specific direction as to its future utilisation”. It recorded that most of the land was subject to the Empowering Act
1983. It argues that the WCC has succeeded to the benefit of the provisions of that Act as the successor authority. It records that transfer to WPL for the benefit of the WCC as a public work “ensures that the offer back provisions of the Act do not apply”. It then goes on:
While Council’s legal advice indicates that the PWA does not apply to the
land concerned, Council also has no obligation to offer back if:
(a) Council considers it would be impracticable, unreasonable, or unfair to do so; or
(b) there has been significant change in the character of the land for the purpose of the public work for which it was acquired.
It is now over 40 years since the land was originally acquired and the use and development entitlement now attributed to that land under the Resource Management Act have entirely changed from those times. Portions of the land have been developed in the intervening period for road and commercial or industrial purposes in conjunction with the Te Atatu peninsula commercial centre, the factory complex along Harbour View Road and the service station on Te Atatu Road and in association with the former Adventure West Fun Park. The original land holding has itself been subsequently overlaid by further subdivisional activity and associated retitling. There has been previous legislative acceptance that the land should be developed under the control of the (then) Waitemata City Council. There has been no indication in the intervening period of continuing interest in the land by any former owner or any successor of such owner as defined by s 40(5) of the Public Works Act 1981, despite the extensive public consultation in relation to the intended development concept by this Council since 1989.
Nothwithstanding the intention to comprehensively develop the land for public works purposes in an integrated fashion, it is appropriate
that WPL be provided with the greatest degree of certainty possible that such a claim cannot subsequently be advanced.
No submission or comments have presently been received as a result of the public advertising now completed and any received subsequent to the issue of this agenda will be tabled. Accordingly, Council is requested to resolve as set out in the recommendation.
[253] Recommendation 5, being part of the resolution, is as follows:
That it be noted, in the event that s 40 PWA 1981 be deemed at any time to have any application to the lands concerned, that Council considers on the information available to it that it would be impractical, unreasonable, or unfair to offer to sell the land to any person from whom it was acquired or any successor of that person, and further, that there has been a significant change in the character of the land for the purposes of the public work for which it was acquired.
[254] The ACC argues that this was a precautionary resolution but was nonetheless valid. It was a resolution that could only be made by the local authority, but it cannot be made by the Court; that it has not been judicially reviewed.
[255] Exercises of statutory or other government power can be judicially reviewed by the Courts of inherent jurisdiction and occasionally are. However, it is always otherwise open to a Court to declare whether or not the conduct of a government body is lawful or not. This can occur sometimes for example, by way of appeal, or indeed in a civil action. Such examinations of the lawfulness of government actions, outside of judicial review proceedings proper, are known as “collateral review”.
[256] The High Court will not stand by and tolerate illegal conduct in government. If the High Court is engaged in proceedings which make the legality of conduct relevant, then it will, to the extent required to resolve the civil dispute before it, examine the government conduct and judge whether it is legal or not. This is not a task whereby the Court exercises jurisdiction given to the government authority. It is, however, a review of that government authority’s exercise. For sure, where the judgment raises questions of degree which are a form of exercise of discretion, the Court will never tell government how that discretion can be exercised. It will confine its judgment as to whether or not such exercise as has happened, has happened with due process and otherwise lawfully.
[257] The defendant Council’s submissions mainly addressed the inability of the Court to exercise the jurisdiction given to the local authority. That seems unanswerable. I adopt the reasoning of Miller J in Edmonds v Attorney-General45 and in the Supreme Court in Hood v Attorney-General.46
[258] Considering all these authorities, Mallon J in Mark v Attorney-General47
said:48
... If it is still now open to the [local authority] to invoke s 40(2)(a) and if it is a role that is only to be formed by the Chief Executive, it is a role that is only to be formed by the local authority subject to any application for judicial review.
(b) If section 40(2)(a) is assessed at the time the offer back ought to have been made, then factors that have arisen since then are potentially relevant to whether declaratory relief should be granted
...
[259] The Court of Appeal in Mark v Attorney-General49 said:50
Even if a declaration were granted, there would still be an outstanding issue as to whether transferring back the acquired land would be unfair or unreasonable. It is not necessary for us to resolve whether that decision is open for the Court or the Chief Executive of LIMZ (here the local authority).
[260] It is in this context that the Court examines the criticisms of that resolution advanced by the plaintiffs in this case.
[261] The agenda item, as preparatory to the exercise of discretion is, with respect, perfunctory. The exercise of discretion needs to be set in context. The remedy afforded by s 40 of the PWA is an important remedy. As I have explained, it was not just to assuage hurt feelings. Considerable damage can be done to society if private property, can be compulsorily acquired for public works and then used for some
other purpose, being a purpose which would not justify a compulsory acquisition.
45 Edmonds v Attorney-General [2006] NZCA 146.
46 Hood v Attorney-General [2007] NZRMA 28 at [128].
47 Mark v Attorney-General, above n 39.
48 At [254(a)].
49 Mark v Attorney-General [2011] NZCA 176; [2011] 2 NZLR 538.
50 At [94].
[262] If the Court had got to the point where all the plaintiffs’ grounds had been established, and the question is only as to discretion to grant relief, very good grounds need to be made out to deny relief. The criteria in s 40(2) are apposite but, like all criteria which are in the category of standards or principles rather than rules, they can only be applied by having regard to the purpose which the statute is intended to achieve. The memorandum and the resolution merely recite a summary narrative of events, and the statutory criteria.
[263] Had this Court decided that there was a duty now to offer back, I would not have accepted that the decision made in 1996 was adequate. It would need to have been re-examined by the ACC.
Residual discretion to grant a declaration
[264] As a common law remedy, the remedy of declaration is discretionary. The factors relevant to the exercise of such a discretion are made relevant by the material facts of the case so they differ from case to case.
[265] I have found that, in this case, the 1983 Empowering Act ended the duty to offer back, and that Act meant that the WCC acquired the property without holding it for a public work, so that s 40 of the PWA 1981 simply did not apply. No question then arises of grant of declaration, let alone the need for an examination of the residual discretion not to grant the remedy.
[266] I have considered whether or not I should embark on that hypothetically, but am reluctant to do so and have decided not to do so because residual considerations made relevant in the exercise of residual discretion are always directly connected with the error of law that is being identified.
[267] Had I found that the 1983 Empowering Act did not have the effect of ending the obligation on the AHB to hold the land for a public purpose and similarly to the ACC as a successor, then I would have had to have embarked on a consideration of whether or not the very presence of the 1983 Act had blind-sided the ACC to the s 40
PWA requirements or left the Council genuinely unsure as to whether s 40 applied. They would only be two of many considerations. Because of the findings that I have
made, to embark on a detailed examination of the exercise of residual discretion would, from my point of view, be an exercise that is moot and thus run the risk of not reflecting what I would have decided were it necessary to decide it.
Result
[268] The plaintiffs’ actions fail for a single reason, which is that the Auckland Harbour Board and Waitemata City Council (Te Atatu) Empowering Act 1983 ended the AHB’s obligation to offer back the lands to the successors of the vendors, from whom the titles were acquired. It rendered irrelevant the prior breach by the Board. There is judgment for the defendant.
[269] Costs are reserved. The defendant has succeeded, by reason of only one of its many defences. That may be a fact relevant to costs.
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