Rongotai Investments Limited v Wellington City Council
[2019] NZHC 2742
•25 October 2019
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2019-485-430
[2019] NZHC 2742
BETWEEN RONGOTAI INVESTMENTS LIMITED
Appellant
AND
WELLINGTON CITY COUNCIL
First Respondent
AND
NZ CASH FLOW CONTROL LIMITED
Second Respondent
AND
2468 LIMITED BUNNINGS LIMITED
WELLINGTON INTERNATIONAL AIRPORT LIMITED
Third RespondentsAND
VALUER-GENERAL
Intervener
Hearing: 27 September 2019 Appearances:
J K Scragg and E M Greig for the Appellant M J Barnes for the First Respondent
K P Sullivan for the Second Respondent and 2468 Limited L M McEntegart and S K Lennon for Bunnings Limited
B M Russell and B G Frowein for Wellington International Airport Limited
Appearance for Intervener is excusedJudgment:
25 October 2019
JUDGMENT OF CULL J
[for expedited hearing and for addition of parties to the proceeding]
[1] Rongotai Investments Ltd (Rongotai Investments) has filed an appeal from the decision of the Land Valuation Tribunal (the Tribunal) dated 19 July 2019 (the
RONGOTAI INVESTMENTS LIMITED v WELLINGTON CITY COUNCIL [2019] NZHC 2742 [25 October 2019]
Decision).1 This is an interlocutory hearing to deal with three applications. First, Rongotai Investments’ application for an expedited hearing of a legal question in its appeal as a separate standalone hearing. Second, the application by some parties to intervene. Wellington International Airport Ltd (Wellington Airport) seeks leave to cross-appeal as a person affected by the Tribunal’s order under s 26 of the Land Valuation Proceedings Act 1948. Wellington Airport was not a party to the Decision. In addition, Bunnings Ltd (Bunnings), a non-party to the first instance hearing, seeks joinder to these proceedings. Both applications are opposed by Rongotai Investments.
[2] Rongotai Investments owns the freehold interest in the two rating units in issue in the Decision. New Zealand Cash Flow Control Ltd (Cash Flow) and 2468 Ltd lease the rating units from Rongotai Investments under 21 year perpetually renewable ground leases, called Glasgow Leases. Cash Flow, 2468 Ltd, and Rongotai Investments all objected to the Wellington City Council’s 2007 general rating revaluation of the two units (the 2007 Objections). The 2007 Objections were the subject of the Tribunal’s Decision.
[3] Importantly, the 2007 Objections are part of a wider series of objections to the general rating revaluations of a number of rating units in the Rongotai area. Those Objections relate to the 2012, 2015, and 2018 general rating revaluations (the 2012 Objections, 2015 Objections, and 2018 Objections). Each set of Objections has been set down to be heard by the Tribunal. The Tribunal heard the 2007 Objections from 25 to 29 March 2019 and released its Decision in July; the 2012 Objections were heard by the Tribunal in September and its decision is forthcoming; and the 2015 and 2018 Objections are yet to be heard.
[4] It appears to have been accepted that many of the same rating units are in issue in each of the respective Objections and that there are common parties to those Objections, with crossover as to the factual and legal issues.
1 New Zealand Cash Flow Control Ltd & Others v Wellington City Council [2019] NZLVT 078.
Background facts
[5] As the Tribunal recorded in its Decision of 19 July 2019, there is a significant history to these proceedings. The 2007 Objections relate to two properties within a development adjacent to Wellington Airport known as Rongotai, and involve objections to rating revaluations as at 1 September 2007 by Quotable Value for the Wellington City Council. As the Tribunal records, the 2007 Objections form one revaluation in a series of revaluations that have either been resolved, such as the 2004 valuations, or are still to be resolved (the 2012, 2015 and 2018 Objections). In its Decision, the Tribunal decided the capital and land value of the relevant properties, and in doing so held that constraints that have a general impact on such values, such as those created by leases, can be taken into account in appropriate cases.2
[6] Following the Tribunal’s release of the Decision, Rongotai Investments filed an application with the Tribunal seeking a stay, adjournment, or enlargement of the 2012 Objections hearing, on the basis that an appeal was to be filed in relation to the Decision. In declining the application for stay, the Tribunal canvassed the reasons for its approach in its decision of 20 August 2019 (the Stay Decision),3 which I set out below.
[7] In 2013, Rongotai Investments filed objections to the 2012 rating review. Despite seeking urgent resolution of the issues, the objection languished until the Tribunal learned of its existence in 2018. In 2018, Judge Dwyer convened a case management conference which identified that further valuation objections for 2018 were likely and since that time, those objections were filed. Judge Dwyer observed, as recorded by the Tribunal, that the 2004 Objections were over 13 or more years old, the 2007 Objections were over 10 years old and the 2012 Objections over five years old.4
[8] Under the heading “Urgency and justice”, the Tribunal recorded its view as to why there was a real urgency to have this matter heard:
2 At [88]. The Tribunal held that s 21(1)(b) of the Rating Valuations Act 1998 does not preclude such constraints from being taken into account.
3 Rongotai Investments Ltd & Ors v Wellington City Council [2019] NZLVT 083.
4 At [7].
[8] There is no doubt in our minds at all that there was a real urgency to have this matter heard. This Tribunal has as its object the just, speedy and inexpensive determination of objections and seeks results that best promote the ends of justice. In this case, we are all satisfied that continued justice delayed was justice denied. All parties appear to have accepted that until this application was filed at the end of July 2019.
[9] The Tribunal noted there were some significant differences between the 2007 and 2012 valuations, with the main difference being the global financial crisis and the fact that land valuations have reduced from the 2007 valuations.5
[10] The Tribunal then set a timetable in March 2019, to ensure that issues that had previously arisen in the late hearing of the 2007 Objections did not arise for the outstanding Objections yet to be heard. On that basis, the Tribunal decided that the 2012, 2015 and 2018 Objections needed to be dealt with promptly and in accordance with the timetable of the Court, which it records that the parties “agreed to”.6 There was a strict timetable and extensions were granted for illness only.7
[11] The Tribunal recorded that it was clear from a Minute of the Tribunal that it intended that the hearing for the 2015 Objections was to take place in November or December 2019.8 The Tribunal recorded “[we] are concerned that delay may prejudice the owners and the lessees. We have already lost one witness, Mr Wall, and the Tribunal members’ terms come to an end in May 2020.”9
[12] The Tribunal expressed its concern that if the 2012, 2015 and 2018 Objections were not heard by the Tribunal before May 2020, they are likely to have to be heard de novo, creating even more difficulty in assessing markets going back to 2007 and 2012.10 The Tribunal pointed to the problems arising from valuation differences in markets between 2007 and 2012, and recorded that all the witnesses before the Tribunal agreed that the global financial crisis had a major impact in 2008 and arguably up to the time of valuation in 2012.11
5 Rongotai Investments Ltd & Ors v Wellington City Council, above n 3, at [9].
6 At [11].
7 Rongotai Investments Ltd & Ors v Wellington City Council, Minute of Land Valuation Tribunal, March 2019.
8 At [12].
9 At [13(c)].
10 At [13(d)].
11 At [13(e)].
[13] After considering the evidence from the two principal valuation experts who gave evidence at the 2007 Objections hearing and were cross-examined on s 21 of the Rating Valuations Act 1988, the Tribunal did not accept the submissions of Rongotai Investments that further evidence was required in light of the Tribunal’s Decision.12 In declining Rongotai Investments’ application for stay, adjournment, or enlargement, the Tribunal considered that the interests of justice in the circumstances of this case are best resolved by proceeding with the hearing, which has been “well signalled” to the parties for over a year.13
The separate question and expedited hearing
[14] In these proceedings, Rongotai Investments seeks an allocation of a priority fixture to hear a separate question of law under rules 7.6 and 10.15 of the High Court Rules 2016. The question of law has been formulated by Rongotai Investments as follows:
What is the correct approach under the Ratings Valuations Act 1998 (Act) to assessing the land value of a rating unit subject to a lease, in particular:
(1)What is the correct interpretation of “land value” in s 2 of the Act?
(2)In what circumstances (if any) can the lease, any of its provisions, or any circumstances arising out of the lease be taken into account, in light of the correct interpretation of “land value” and s 21 of the Court?
(3)How are any such matters to be taken into account?
[15] Rongotai Investments seeks a priority fixture on this legal question principally on the grounds that the legal question arising from the Decision will also arise in the 2012, 2015 and 2018 Objections. In Rongotai Investments’ submission, the determination of the legal question will inform the Tribunal’s decision as to the 2012 Objections, which was heard in August and for which a decision is awaited. It is submitted it will also set the scope of evidence for the Tribunal’s hearings of the 2015 and 2018 Objections and therefore the legal question ought to be determined before those Objections so that the Tribunal and the parties have certainty on these matters.
12 At [15].
13 At [21].
[16] Because the Tribunal has scheduled a five-day hearing for the 2015 Objections, starting on 25 November 2019, and indicated the 2018 Objections will be heard in early 2020, Mr Scragg for Rongotai Investments seeks a priority fixture before those scheduled dates and before the delivery of the Tribunal’s 2012 Objections decision. Rongotai Investments’ application is strongly opposed by Cash Flow, 2468 Ltd, and the non-parties to the 2007 Objections hearing, Wellington Airport and Bunnings respectively.
[17] I put to one side the issue of joinder and cross-appeal from the two non-parties for the present in order to deal with the issue of whether there should be an expedited hearing of the separate question of law. The grounds on which Cash Flow and 2468 Ltd (the parties) oppose the making of the orders can be summarised as follows:
(a)Requiring the parties to separate out a legal question to argue an urgent appeal in the context of the scheduled Tribunal hearings is the antithesis of a just, speedy and inexpensive determination of the appeal.
(b)The parties have cross-appealed the Decision regarding the land value, which is at the heart of Rongotai Investments appeal, but on different grounds. The parties agreed to the determination of the 2007 Objections in the Tribunal on the basis that the 2012, 2015, and 2018 Objections would follow.
(c)The 2012 Objections provided all parties, including the non-parties, with a greater opportunity to file expert evidence as to the impact of leasehold tenure on the rating valuation, the s 21 issues, and the value of the lessor’s interests at issue.
(d)There is no basis for urgency, as all parties acknowledge the process put in place by the Tribunal to determine these related Objections over the same or similar properties sequentially and in a timely manner following many years of delay.
[18]These grounds of opposition largely mirror those of the non-parties.
[19] Rule 10.15 of the High Court Rules 2016 enables the Court to make orders for the decision of any question separately from any other question in a trial or further trial in a proceeding. Its purpose is to “expedite proceedings by limiting or defining the scope of the trial in advance or obviating the need for a trial altogether.”14 Rule 10.15 is not restricted to hearings involving the exercise of the Court’s original jurisdiction, but may also apply to appeals. As Mallon J in Attorney-General v Idea Services Ltd said:15
There may be situations where “the just, speedy, and inexpensive determination” of an appeal is secured by the determination of a preliminary question.
[20] I consider that Rongotai Investments’ application does not raise a discrete jurisdictional point, unlike the issue in Idea Services. The approach by the Tribunal in its Decision was to determine the freehold value as at 1 September 2007 and apply a constraint for the leasehold nature of tenure.16 Although s 21 of the Rating Valuations Act may be a discrete legal point on appeal, it is part of an expert valuation process determining the rating valuation of land, not a standalone exercise. I do not consider it is amenable to determination as a preliminary or separate question, without the factual and market context of the valuation approach. This necessarily involves a review of the evidence.
[21] Even if I am wrong about that issue, there are three reasons which I consider count against a separate hearing:
(a)It will cause delay, not expedite the hearings.
(b)The parties had agreed to the four hearings being heard sequentially, with appeal issues being addressed later.
(c)The consequences of not proceeding with the scheduled hearings will cause further complication.
14 Innes v Ewing (1986) 4 PRNZ 10 (HC) at 18.
15 Attorney-General v Idea Services Ltd HC Wellington CIV-2011-485-1562, 16 December 2011 at [37].
16 New Zealand Cash Flow Ltd v Wellington City Council, above n 1, at [88].
[22] Dealing first with delay, I cannot overlook that the rating objections were some 13 or more years old for the 2004 Objections, over 10 years old for the 2007 Objections, and some five years old for the 2012 Objections as at the first prehearing conference in 2018. The Tribunal’s reasons for scheduling the four hearings by the same panel before the panel’s terms come to an end in May 2020 was designed to alleviate the difficulty in retrospective valuation assessments and assist the parties in having the matters determined. The impact of delay, such as the impact of the global financial crisis on valuation undertaken between 2008 and 2012, is an illustration of the need to have these matters resolved.
[23] Secondly, the Tribunal, with the general agreement of all parties to the proceedings in relation to the 2007, 2012, 2015, and 2018 revaluations, scheduled consecutive hearings, aimed to be completed within 12 months, to enable decisions to be issued promptly. The appeal issues, which were clearly raised with the Tribunal as part of its scheduling process, were factored into the scheduling. The Tribunal noted they could be addressed after the hearings had been heard and determined. The Tribunal has specifically said:17
Appeals were anticipated and the Tribunal intended (with the parties understanding) to complete all objections so appeals could be heard together. If all matters were remitted back to the LVT [Tribunal] after appeal, these could be heard at the same time a[s] the LVT assisting with a just, speedy and inexpensive solution. This is especially so given the extreme delay and the costs of repeated hearings;
It is clear from the Tribunal’s directions that all parties wanted resolution of these outstanding valuation Objections. I consider the Tribunal established an agreed process to obviate further delays. The Tribunal’s management of those hearings and the reasons for them should not be thwarted.
[24] Thirdly, I am satisfied there will be considerable complications, causing significant prejudice, if the scheduled hearings are not completed before the Tribunal’s members’ terms come to an end in May 2020. It is preferable, as the Tribunal stated in its Stay Decision, that the same panel hear all four sets of Objections. If, on appeal, the matters are remitted back, the issues can be easily remedied by the Tribunal,
17 Rongotai Investments Ltd & Ors v Wellington City Council, above n 3, at [13].
particularly as all four decisions will have been heard by the same panel, with the same expert witnesses.
[25] For the above reasons, I decline the application for a separate question and an expedited hearing.
Joinder of non-parties
[26] Wellington Airport seeks leave to cross-appeal the Tribunal’s Decision, and Bunnings seeks to be joined as a party to this appeal proceeding. Rongotai Investments opposes both applications.
[27] I record that the Valuer-General sought and was granted leave to join the proceedings.18 The Valuer-General indicated that the point of interest in these proceedings is the issue of s 21 of the Rating Valuations Act 1998 and the principles of statutory interpretation arising in the proceedings.
Wellington Airport’s application
[28] Wellington Airport seeks leave to cross-appeal the Decision under s 26 of the Land Valuation Proceedings Act 1948. Section 26 provides:
26 Appeals to court against orders of Land Valuation Tribunals
(1)Within the prescribed time after the making of any final order of a Land Valuation Tribunal or within such further time as may be allowed by the court, Her Majesty (acting by any Minister or by a Crown representative appointed under section 36) or any person affected by the order may, in accordance with the rules of the court, appeal to the court from the order or from any part thereof. Every such appeal shall be by way of rehearing.
[29] Wellington Airport applies as a “person affected” by the Decision because, having acquired an interest in four Rongotai properties after 2007, it was engaged in the Tribunal 2012 Objections proceedings and will be involved in the subsequent 2015 and 2018 Objections hearings. It says its interest is similar to the interests of the cross-
18 Rating Valuations Act 1998, s 37(1)(c); and Rongotai Investments Ltd v Wellington City Council
HC Wellington CIV-2019-485-430, 27 August 2019.
appellant parties, Cash Flow and 2468 Ltd, as they are all lessees under the registered ground leases, with Rongotai Investments being the lessor.
[30] Wellington Airport contends that the rent payable under the ground leases is directly linked to the rating valuation set for the properties, and the issues arising from the appeal will bind the Tribunal and may well directly influence the outcome of the subsequent proceedings. For that reason, Wellington Airport submits that it is a “person affected” by the Tribunal’s Decision, and because of its participation in the other three hearings, it should have leave to cross-appeal in these proceedings.
[31] I record that Wellington Airport’s leave to appeal was filed out of time. Wellington Airport was not served with the notice of appeal dated 2 August 2019 by Rongotai Investments, but was served with the cross-appeals from Cash Flow and 2468 Ltd dated 20 and 21 August 2019. As a result, Wellington Airport appeared at the first case management conference on 26 August 2019 to foreshadow its application to join the appeal proceedings. In the circumstances, I am satisfied that Wellington Airport took immediate steps as soon as it became aware of this appeal, and no prejudice has been caused by the delay in filing its application. I grant leave to Wellington Airport to apply for leave out of time.
Bunnings’ application
[32] Bunnings seeks to be joined as a party under the High Court Rules on the basis that its “presence before the court may be necessary to adjudicate on and settle all questions involved in the proceeding.”19 It submits that it has an interest arising out of the appeal decision concerning “the owner’s state or interest” in the land and the manner in which that interest is to be valued under s 21 of the Rating Valuations Act 1998.
[33] As with Wellington Airport, Bunnings was not a party or involved in the 2007 Objections hearing, but has been involved in the 2012 Objections hearings and will be involved in the 2015 hearing. Bunnings submits that their interest in the appeal arises because the question in issue in the appeal also arises in the 2012, 2015, and 2018
19 High Court Rules 2016, r 4.56(1)(b)(ii).
revaluations. As with Wellington Airport, Bunnings subsequently acquired its interest in properties in Rongotai after 2007.
[34] Following this hearing, Rongotai Investments filed a memorandum drawing my attention to the fact that Bunnings was not listed as a party to the 2018 Objections hearing because it had not filed objections to the 2018 general rating revaluation. However, Bunnings has applied for an order to be joined as a party to the 2018 Objections hearing and its application is yet to be determined by the Tribunal. I note that in its grounds for joinder, Bunnings has submitted to the Tribunal that it has an interest as the lessee of three properties, the subject of the 2018 proceedings, and wishes to preserve its position in future years by being heard as a party.
[35] In summary, Bunnings submits that it has legal rights which will be directly affected by the outcome of the question in the appeal and has a specific argument, which is not being advanced by another party. It wishes to protect its rights.
Rongotai Investments’ opposition
[36] Although acknowledging that the Court has a discretion as to joinder of parties, Mr Scragg for Rongotai Investments submits that there is no right for Bunnings to participate. If, however, either Wellington Airport or Bunnings is allowed to intervene, he submits that they should not be heard as a full party, as sought by Wellington Airport, but as an intervener, and limited to dealing with the legal issues that arose in the 2007 Objections hearing. His concern was that they should not be permitted to raise new issues which, in this case, would include an issue about the interpretation of improvements. Nor should they, he says, be entitled to dictate the procedure by which the appeal proceeds. Mr Scragg relies on Seales v Attorney-General, where Collins J allowed intervention by other parties as interveners, but on a confined basis.20
[37] Rongotai Investments acknowledges the authority of Capital and Merchant Finance Ltd (in rec and in liq) v Perpetual Trust Ltd, where the High Court held that the applicant for joinder must demonstrate that its legal rights in relation to the subject
20 Seales v Attorney-General [2015] NZHC 828 at [66]–[73].
matter of the proceeding are directly affected.21 It argues that the Decision under appeal relates only to the 2007 Objections in respect of two rating units in issue as at September 2007, and that Bunnings and Wellington Airport had no direct interest in those properties at the relevant time. Because they have no direct rights in the subject matter of the appeal, Rongotai Investments opposes their joinder.
[38] Mr Scragg contends that in addition to having no direct interest in the two properties in 2007, and consistent with the authorities, a person is not allowed to intervene in a proceeding simply because they are party to another proceeding in which the same legal issues arise.22 In Taylor v Key, two applicants sought to be joined to an electoral petition on the basis that the issues in that petition arose in another petition to which they were a party, as well as a third proceeding to which one of the applicants was a party. In declining the application, the Court placed weight on the fact that the applicants would not be prevented from arguing in different proceedings for a different outcome.23
Discussion
[39] In Seales v Attorney-General, this Court established principles with which to consider applications by interested parties to intervene, particularly where the proceeding involved issues of general and wide public importance.24 As Collins J noted, leave to intervene may be granted when the Court is satisfied that it would be assisted by the intervener, or where the proceedings are likely to result in the development of the law.25
[40] However, I consider the facts and issues in this case differ markedly to Seales. The parties have commercial and financial interests in the outcome of the Tribunal’s decision. Further, here there is a statutory right conferred on any person affected by a Tribunal’s order to appeal to this Court under s 26 of the Land Valuation Proceedings Act.
21 Capital and Merchant Finance Ltd (in rec & in liq) v Perpetual Trust Ltd [2014] NZHC 3205, [2015] NZAR 228, at [41].
22 Taylor v Key [2014] NZHC 3306, [2015] NZAR 730.
23 At [13].
24 Seales v Attorney-General, above n 20, at [41]–[48].
25 At [46]–[48].
[41] Both of the non-parties to the 2007 Objections proceedings have been participants in the 2012 Objections hearings and intend to be participants in the next two hearings. Although Wellington Airport’s interests are aligned with the interests of Cash Flow and 2468 Ltd, it wishes to protect its interests, particularly in light of the Tribunal’s valuation exercise it undertook in reaching the five per cent adjustment, the subject of the 2007 Objections appeals.
[42] I am satisfied that Wellington Airport’s interests satisfy the provision under s 26 of the Land Valuation Proceedings Act that it is a person affected by the Tribunal’s order and so has a right of appeal, as it is seeking leave to exercise. In addition, it has a legal, commercial and financial interest in the outcome of the Tribunal’s valuation exercise for the 2012, 2015 and 2018 Objections hearings. If the Tribunal takes the same view as it did for the 2007 Objections, Wellington Airport’s interests are directly affected. I therefore grant Wellington Airport’s application for leave to cross-appeal.
[43] Turning, then, to Bunnings’ application for joinder to the appeal proceedings, I see little difference between Bunnings and Wellington Airport. Bunnings submits that its legal rights will be directly affected by the outcome of the legal question raised in the appeal, and further, it wishes to advance an argument not presently advanced by any other party.
[44] I consider Bunnings’ position satisfies the test in Capital and Merchant Finance Ltd v Perpetual Trust Ltd, particularly as Bunnings cannot rely on one of the parties to protect its rights and obligations.26 In addition, although this was not argued before me, in the same way that Wellington Airport is a party affected under s 26 of the Land Valuation Proceedings Act, I consider Bunnings satisfies the requirements of s 26 and has the right to appeal to the Court from the Decision. Bunnings’ application for joinder is therefore granted.
[45] The overriding consideration in granting both Wellington Airport’s leave to cross-appeal and Bunnings’ application for joinder is the fact that all parties before the Court on these interlocutory applications are involved in the other three hearings
26 Capital and Merchant Finance Ltd, above n 21, at [41].
before the Tribunal.27 As I noted in declining Rongotai Investments’ application for a separate hearing on the legal issue, the future hearings will be held in a relatively short space of time, involving the same parties, the same experts, the same Tribunal’s panel, with a right at the conclusion of all hearings for the parties to appeal the Tribunal’s decisions. This will include the Tribunal’s approach to s 21 and its valuation exercise. It is therefore logical that both Wellington Airport and Bunnings are involved in this appeal proceeding.
Result
[46] The application for the determination of a separate question and expedited hearing is declined.
[47] Wellington Airport is granted leave to cross-appeal out of time a decision of the Land Valuation Tribunal at Wellington dated 19 July 2019.
[48]Bunnings is joined as a party to these appeal proceedings CIV-2019-485-430.
[49] No orders are made to limit the participation of Bunnings and Wellington Airport in these appeal proceedings. Such orders, if appropriate, should be made by the Judge hearing the appeal.
Costs
[50] Counsel are to confer on the issue of costs. If it is helpful to the parties, 2B costs seem to be appropriate. In the event that counsel cannot agree, counsel are to file memoranda within 10 working days of this decision.
Cull J
Solicitors:
Duncan Cotterill, Wellington for Appellant
Lane Neave, Christchurch for Third Respondents
27 I record at [34] that Bunnings is not a party in the 2018 Objections hearing, but has applied to be joined to the proceedings. Although this has yet to be determined, it does not affect my analysis.
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