Rongotai Investments Limited v Wellington City Council

[2020] NZHC 543

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV 2019-485-430

[2020] NZHC 543

UNDER

the Ratings Valuation Act 1998

IN THE MATTER OF

an appeal against a decision of the Land Valuation Tribunal at Wellington

BETWEEN

RONGOTAI INVESTMENTS LIMITED

Appellant

AND

WELLINGTON CITY COUNCIL

First Respondent

NZ CASH FLOW CONTROL LIMITED
Second Respondent

2468 LIMITED

Third Respondent

VALUER-GENERAL

First Intervener

CIV 2019-485-662

IN THE MATTER OF

the application for judicial review of a Land Valuation Tribunal hearing in respect of objections under the Ratings Valuations Act 1998 and the Land Valuation Proceedings Act 1948

UNDER

the Judicial Review Procedure Act 2016

BETWEEN

RONGOTAI INVESTMENTS LIMITED and RONGOTAI ESTATES LIMITED

Applicants

AND

LAND VALUATION TRIBUNAL

First Respondent

2468 LIMITED

Second Respondent

RONGOTAI INVESTMENTS LIMITED v WELLINGTON CITY COUNCIL [2020] NZHC 543 [18 March 2020]

BUNNINGS LIMITED

Third Respondent

LYALL BAY PROPERTIES LIMITED
Fourth Respondent

WELLINGTON INTERNATIONAL AIRPORT LIMITED

Fifth Respondent

WELLINGTON CITY COUNCIL
Sixth Respondent

ATTORNEY-GENERAL
Seventh Respondent

NZ CASH FLOW CONTROL LIMITED
Eighth Respondent

CIV 2019-485-724

UNDER

the Rating Valuation Act 1998

IN THE MATTER OF

an appeal against a decision of the Land Valuation Tribunal at Wellington

UNDER

the Judicial Review Procedure Act 2016

BETWEEN

RONGOTAI INVESTMENTS LIMITED and RONGOTAI ESTATES LIMITED

Appellants

AND

WELLINGTON CITY COUNCIL

First Respondent

2468 LIMITED
Second Respondent

NZ CASH FLOW CONTROL LIMITED
Third Respondent

BUNNINGS LIMITED
Fourth Respondent

LYALL BAY PROPERTIES LIMITED
Fifth Respondent

WELLINGTON INTERNATIONAL

AIRPORT LIMITED

Sixth Respondent

CIV 2020-485-44

UNDER

the Rating Valuations Act 1998

IN THE MATTER OF

an appeal against a decision of the Land Valuation Tribunal at Wellington

BETWEEN

WELLINGTON INTERNATIONAL AIRPORT LIMITED

Appellant

AND

WELLINGTON CITY COUNCIL

First Respondent

RONGOTAI INVESTMENTS LIMITED
Second Respondent

RONGOTAI ESTATES LIMITED
Third Respondent

NZ CASH CONTROL LIMITED
Fourth Respondent

ROGER BLAYLOCK and YVONNE KEREKES AS TRUSTEES OF THE R BLAYLOCK AND Y KEREKES FAMILY TRUST
Fifth Respondents

BUNNINGS LIMITED
Sixth Respondent

2468 LIMITED

Seventh Respondent

CIV 2020-485-45

UNDER

the Rating Valuation Act 1998

IN THE MATTER OF

an appeal against a decision of the Land Valuation Tribunal at Wellington

BETWEEN

RONGOTAI INVESTMENTS LIMITED and RONGOTAI ESTATES LIMITED

Appellants

AND

WELLINGTON CITY COUNCIL

First Respondent

BUNNINGS (NZ) LIMITED
Second Respondent

NZ CASH FLOW CONTROL LIMITED
Third Respondent

BLAYLOCK & KEREKES FAMILY TRUST

Fourth Respondent

2468 LIMITED
Fifth Respondent

WELLINGTON INTERNATIONAL AIRPORT LIMITED

Sixth Respondent

Hearing:

13 March 2020

Counsel:

G H Allan and T Mijatov for Rongotai Investments Limited S V McKechnie and E H Wiessing for Bunnings Limited

K P Sullivan for 2468 Limited, Wellington International Airport Limited and NZ Cash Flow Control Limited

M J Barnes for Wellington City Council (abiding) Other parties – abiding and excused

Judgment:

18 March 2020

JUDGMENT OF MALLON J

The issue

[1]    The issue before me is whether a judicial review application should be heard alongside a number of related appeals from decisions of the Land Valuation Tribunal (the Tribunal). It is sought by the parties to the judicial review and the appeals who are taking an active part in those proceedings (the lessees). It is opposed by the party

(Rongotai) who has brought the judicial review and who is the appellant in the appeals.1

The background

[2]    Local authority rating values are set every three years. The process begins with Quotable Value carrying out what counsel described as a mass appraisal of property values. The Council reviews the mass appraisal and sets its proposed rates based on it. The ratings are publicly notified and there is an opportunity to object. Objections are considered by Quotable Value, which involves a more specific analysis of the value of the property to which the objection has been made. Depending on the outcome of this analysis, the Council does or does not reset the rates and this is publicly notified. Objections can then be made by application to the Tribunal. The Tribunal is comprised of a District Court Judge and two valuers. The hearing considers expert evidence as to value. A site inspection also takes place. The Tribunal forms its view on the value of the property at issue and if it is sufficiently different from the Council’s rating value, this becomes the new value.

[3]    The proceedings in this Court involve objections to the rating value assessments that have been made in relation to certain land in the Rongotai area of Wellington which is adjacent to Wellington Airport. Rongotai is the owner of a freehold interest in this area and has leases with the lessees. Rongotai and the lessees have been participating in proceedings before the Tribunal, challenging rating value assessments that have been made in relation to this land. Once the rating value is set, this has a flow-on effect on the rent paid by lessees under their leases. Rongotai favours a high rating value and the lessees favour a lower value.

[4]    The hearing of objections before the Tribunal has been considerably delayed. The Tribunal has been addressing objections in relation to the same properties in a series of hearings in relation to different valuation periods. The relevant valuation periods are 2007, 2012, 2015 and 2018.2

1      Wellington International Airport Ltd is also an appellant in one of the appeals. Some of the parties have brought cross appeals.

2      There were initially more years in issue but these are the remaining contested years.

[5]    These hearings have led to a series of appeals filed in this Court as well as a judicial review claim. The current proceedings, in the order in which they were filed, are:

(a)2007 Rongotai appeal;3

(b)2012 Rongotai appeal;4

(c)2015 Wellington International Airport Ltd appeal5 and 2015 Rongotai appeal;6

(d)2019 Rongotai judicial review.7

[6]Cross appeals against some of the appeals have also been lodged.

[7]    The hearing of the objections for the 2018 rating year commenced on 11 and 12 March 2020 and is scheduled to resume on 17 to 20 March 2020. It is anticipated that an appeal may be lodged from that decision as well.

[8]    In addition to these appeals and the judicial review, there have also been applications to the Court heard on an urgent basis:

(a)An application by Rongotai for interim relief against the Tribunal’s decision not to grant a stay of the 2012 hearing.8 This was declined and the proceeding has since been discontinued.9

(b)An application for an expedited hearing on a separate question in the 2007 appeal.10 The separate question concerned an issue about whether a lease and its terms could be taken into account in assessing ‘land

3      CIV-2019-485-430.

4      CIV-2019-485-724.

5      CIV-2020-485-44.

6      CIV-2020-485-45.

7      CIV-2019-485-662.

8      CIV-2019-485-495.

9      Rongotai Investments Limited v Land Valuation Tribunal at Wellington [2019] NZHC 2103.

10     CIV-2019-485-430.

value’ in s 21 of the Ratings Valuation Act 1998. The application was made because the same issue was expected to arise in the 2012, 2015 and 2018 hearings. The application was declined. An application to add parties to the appeal succeeded.11

(c)An application for interim relief in the judicial review.12 This sought an order preventing the Tribunal from proceeding with or determining the upcoming objection hearings (2012, 2015 and 2018). The Judge declined the order, concluding that the allegations were better assessed once the hearings had been determined.13

[9]    Rongotai’s view is that the Tribunal has made errors and set the property values too low in each of the years. Its appeals raise various issues that go to the merits of the decisions made. For example:

(a)The grounds for the 2007 appeal include the claims that the Tribunal misinterpreted the definition of ‘land value’, erred in taking into account a lease, incorrectly assessed comparable sales and gave inadequate reasons.

(b)The grounds for the 2012 appeal include alleged errors concerning evidence about the state of the Wellington property market and comparable sales and that the Tribunal erred in its reliance on the Pengelly Transaction.

(c)The grounds for Rongotai’s 2015 appeal include alleged errors in the roll values taken for properties, failing to determine the values on the evidence and instead applying earlier findings, including wrongly taking into account the Pengelly Transaction as a comparable property, miscalculating the range of values adopted by expert valuers in the 2007 and 2012 decisions, and applying excessive adjustments to some of the comparable sales.

11     Rongotai Investments Limited v Wellington City Council [2019] NZHC 2742.

12     CIV-2019-485-662.

13     Rongotai Investments Limited v Land Valuation Tribunal [2019] NZHC 3040.

[10]   The judicial review alleges bias and predetermination by the Tribunal in its hearing of Rongotai’s rating objections for the 2012 rating year. The allegations concern how the Tribunal approached the evidence about the Pengelly Transaction.

[11]   The Pengelly Transaction was one of around 16 comparable sales considered by the expert valuer for Quotable Value in assessing the value of the Rongotai property for the rating value assessment. It involved the sale of two properties in the same street as the subject property. Mr Aharoni, the sole director and shareholder of Rongotai, was the highest tenderer for that property. He did not secure finance and the property was sold to the next highest tenderer. Before the Tribunal, Rongotai sought to adduce evidence to discredit the bona fides of that sale.

[12]   The judicial review claim alleges that Mr Aharoni’s evidence was unfairly dealt with in a manner that demonstrated bias and predetermination. For example, the claim alleges counsel for one of the lessees (Bunnings) was permitted to unfairly and improperly impugn Mr Aharoni’s evidence, and the Judge improperly joined in with this, took over the cross-examination of Mr Aharoni by counsel for another party and repeatedly raised issues with Mr Aharoni’s evidence with other witnesses. It also alleges the Judge unfairly impugned the independence and credibility of expert witnesses, aligned himself with Bunnings’ counsel and imputed ulterior motives to Rongotai’s counsel. The claim alleges that a fully informed and fair minded observer would reasonably form the view that the Judge was not bringing an impartial mind to the determination based on his conduct, his interactions with counsel and his questioning of witnesses.

[13]The pleaded relief sought in the judicial review claim is orders:

(a)prohibiting the Tribunal from issuing a final judgment on the 2012 objection;

(b)directing the rehearing of the 2012 objection by a differently constituted Tribunal;

(c)quashing the interim decision given in the 2012 objection proceeding; and

(d)prohibiting the Tribunal, as presently constituted, from hearing and determining the 2015 and 2018 objection hearings.

[14]   The relief claimed in (a) and (d) is now redundant. The Tribunal has been comprised of the same three members throughout. An application for recusal was declined by the Tribunal for the 2015 hearing, the 2012 and 2015 decisions have been given and the 2018 decision will have been given by the time the judicial review is heard. Rongotai intends to amend the relief to seek orders for a rehearing of the 2012, 2015 and 2018 objection hearings. In addition, it will likely seek declarations as to the impropriety of the Tribunal’s conduct.

[15]   Should the 2021 rating assessments proceed to an objection hearing the Tribunal will be differently constituted. The process will begin in October 2021 and any objection hearings will not be earlier than December of that year.

Respective positions of the parties

[16]   By previous judicial directions all the appeals and the judicial review are being case managed together. As noted earlier, the issue is whether the judicial review should be heard with the appeals or determined separately.

[17]   Rongotai’s view is that it has a judicial review that is ready to be set down for hearing (albeit that it intends to amend the claim). Judicial review is intended to be a prompt process. The claim was filed in October 2019. Rongotai says the question is why the hearing of its claim ought to be deferred until all the appeals are ready for hearing, when it is ready for hearing now. Rongotai submits there is no sufficient reason for this.

[18]   Rongotai submits that it is inappropriate for the judicial review claim to be heard with the appeals in any event. It accepts that appeals and judicial reviews are often heard together but submits the appropriateness of this depends on the grounds for the review. It submits the 2012 record is impugned by the unfair conduct of the

Judge and it cannot be right to have the appeal determined on an impugned record. To determine the appeals, the Court will first have to assess the fitness of the record on which the appeals will proceed. If the Court considers the unfair conduct has impugned the record, then Rongotai will have been put to the expense of preparing for the appeals unnecessarily.

[19]   The lessees (Bunnings, WIAL, NZFC and 2468) consider the judicial review should be heard immediately after the substantive appeals. The appeals must be heard by a judge sitting with two lay members. The lessees submit the Judge who sits with the lay members on the appeals would then preside on the judicial review alone. They submit Rongotai overstates the readiness of the judicial review claim for hearing. In addition to amending the relief, it seems that Rongotai may want to include allegations concerning the 2015 and 2018 hearings. It also seems that additional parties will need to be added.

[20]   The lessees submit it would be a significant undertaking, affecting a number of parties, if the 2012, 2015 and 2018 objections were reheard by the Tribunal. If the appeals are not determined first, there is a risk that alleged errors made by the Tribunal the first time around will remain uncorrected and the appeals will still need to be determined. It would be preferable to have errors corrected first. The lessees submit an appeal can cure the process defects relied on in a judicial review and this is why it is so common to hear appeals and judicial review claims at the same time. If Rongotai’s appeals are successful, relief on its judicial review may be declined because it has obtained an effective remedy.

[21]   The lessees submit the appeal court will be aware of the judicial review claims and can take them into account in assessing the appeal grounds. The relevant evidence before the Court is principally made up of lengthy written statements from experts. A key issue in setting value is the assessment that is made of comparable sales, of which the Pengally Transaction was just one. It is common place for an appeal court to have to take into account any credibility issues. There is no reason why the Court would be unable to do this to the extent they arise on the appeals here. The Court will have the benefit of the audio recordings of the hearings in assessing the extent to which the Judge’s conduct affected the evidence upon which the Tribunal reached its decisions.

[22]   The lessees submit there are other practical efficiencies in hearing the appeals and judicial review together. The Court hearing the appeals and the Judge hearing the judicial review will have to traverse the same substantial material. Having the same judge hearing the appeals and the judicial review will avoid duplication. Overall counsel preparation time would be less. Court hearing time will be reduced: a total of nine days (five days for the appeals and four days for the judicial review) would reduce down to a total of six days (four days for the appeals and up to two days for the judicial review). There would also be reduced time and cost in preparing the bundles for the hearings.

My assessment

[23]   I consider the judicial review and appeals should be heard one after the other with the same judge presiding on the review as sitting with the lay members on the appeal. This is for the following reasons.

[24]   First, there are considerable efficiencies for the parties and the Court because of the substantial overlap in the evidence to be considered in the 2012, 2015 and 2018 appeals and the judicial review. Duplication in reviewing and assessing the evidence will be avoided, and bundle preparation costs and hearing time will be reduced. It may also be more efficient for case management if the appeal and judicial review proceed to a hearing together.

[25]   Secondly, the Court will be better placed to assess the strength of the judicial review claims with a fuller appreciation of how a reasonable observer would regard the Judge’s conduct through having also heard the appeal submissions.

[26]   Similarly, the Court will be better placed to determine whether there are appeal grounds that may be determined even if the record has been affected by the Judge’s conduct. For example, a legal issue that may be common to the appeals is whether the provisions of a lease can be taken into account when interpreting ‘land value’ under the Act. This issue would seem to be capable of determination unaffected by whether the Judge’s conduct gave rise to an apprehension of bias or predetermination. There may be other issues in this category. It is better that any such issues are resolved before the Tribunal is required to embark on a rehearing of the objections, potentially making

the same decisions on issues that will then be subject to appeal. The Court will be able to determine whether relief should be ordered on the judicial review, taking into account the outcome on the appeal and the form of that relief, and similarly which appeal grounds can and should be determined in light of the judicial review claim.

[27]   The same point was made by this Court when declining the interim relief application. The Judge referred to cases involving allegations of predetermination and bias and said:14

[26]      The above authorities illustrate not only the desirability of assessing allegations of pre-determination in the full circumstances of the case, but also that any orders by way of relief need to be assessed in the full circumstances. Quite robust earlier findings, or comments during hearings have been haled not to warrant intervention when the full context is understood. The discretion in relation to relief in judicial review is important. For example, even if claims were upheld, it may be that the Court could quash the comments in the oral interim decision … or make relevant declarations, but conclude the substantive determination should not be disturbed.

[27]      The factual contest concerning the Pengally transaction appears to have occupied much hearing time before the Tribunal. … the ultimate issue was whether it should be included in the basket of transactions taken into account to assess the value of the land. The question to be determined by the Tribunal, and then by this Court on any appeal, is what the appropriate value of the land is. There is no doubt that the Pengally transaction occurred, with the factual issues relating to whether it was at market price. So the ultimate issues of relevance are confined ones.

[28]     I therefore do not accept that Rongotai will be prejudiced by hearing the judicial review and the appeals together. It is common practice for an appeal and a judicial review proceeding to be heard together. This occurs in cases where it is alleged that the record is impugned by the conduct of the decision-maker or is otherwise alleged to be inadequate, as well as other cases. A recent example is Greenpeace’s challenge to the decision of the Charities Board declining Greenpeace’s application for registration as a charity.15 Another example is the Foundation for Anti- Aging Research’s challenge to the Charities Registration Board’s decision declining the Foundation’s application for registration as a charity.16

14     Rongotai Investments Limited v Land Valuation Tribunal, above n 13.

15     Greenpeace of New Zealand Incorporated v The Charities Registration Board [2019] NZHC 929.

16     Re The Foundation for Anti-Aging Research [2016] NZHC 2328; (2016) 23 PRNZ 726.

[29]     Lastly, ordinarily a judicial review claim should be heard promptly. That is also true of an appeal. It might have been appropriate to hear the judicial review first if it was ready for hearing and it was on a confined issue. However, the series of objection hearings held in short order (because of earlier delays) has meant that a range of related issues have arisen across the series of decisions. Earlier applications made by Rongotai to progress the judicial review and appeals in a different way have been unsuccessful. The position is now that the claim and the appeals can be case managed efficiently together for a reasonably prompt hearing and in a way that is more likely to achieve an earlier resolution of all matters at issue in the series of objection hearings. If the Court is satisfied that it can determine the appeals, it may confirm the values determined by the Tribunal or modify the values and thereby avoid the need for the objections to be reheard.

[30]     Accordingly, the appeals and the judicial review are to be heard together. As a matter of practicality, it may be sensible for the appeals to be heard first by the Judge and lay members, immediately followed by the judicial review heard by the Judge alone with the benefit of the context provided by the appeal. Hearing them the other way around might also work. Either way, the decisions on the appeal and the judicial review could be released together.

Timetable directions

[31]     The appeals and the judicial review will now be case managed together by a judge (to be assigned). Ideally that will be the Judge assigned to preside at the hearing but in the meantime I will be the assigned Judge. Timetable directions need to be put in place to enable the prompt hearing of the appeals and the judicial review as well as any appeals that are lodged when the hearing of the 2018 objections have been determined. The parties are to liaise with the Registry to obtain a six day fixture for the hearing of the appeals and the judicial review. The parties taking active steps are to liaise and file a joint memorandum with timetable directions that will enable the hearing to take place at that time. The joint memorandum is to be referred to me in the meantime.

Mallon J