Rotorua District Council v Ngati Whakaue Education Endowment Trust Board
[2017] NZHC 1137
•29 May 2017
IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY
CIV-2016-463-000057 [2017] NZHC 1137
UNDER The Land Valuation Proceedings Act 1948 IN THE MATTER OF
an appeal from the Land Valuation
TribunalBETWEEN
ROTORUA DISTRICT COUNCIL Applicant
AND
NGĀTI WHAKAUE EDUCATION ENDOWMENT TRUST BOARD Respondent
AND
VALUER-GENERAL Intervenor
Hearing: 10 April 2017
(Heard at Auckland via AVL)
Appearances:
L McEntegart and G J Dennett for Appellant
P V Cornegé for Respondent
J Prebble and R Polaschek for Valuer-GeneralJudgment:
29 May 2017
JUDGMENT OF PALMER J
This judgment is delivered by me on 29 May 2017 at 4.00 pm pursuant to r 11.5 of the High Court Rules.
..................................................... Registrar / Deputy Registrar
Counsel/Solicitors:
L McEntegart, Barrister, Auckland
G J Dennett, Solicitor, Rotorua
P V Cornegé, Barrister, Hamilton
Rotorua District Council, Rotorua
ROTORUA DISTRICT COUNCIL v NGĀTI WHAKAUE EDUCATION ENDOWMENT TRUST BOARD
[2017] NZHC 1137 [29 May 2017]
Summary
[1] The better Court of Appeal authority is that s 18A of the Land Valuation Proceedings Act 1948 (the Act), rather than the general principles for second appeals, govern applications for leave to appeal under the Act. However, the same considerations are likely to be relevant to each approach. Questions of law and general principle are involved in this case, the issues are important to the parties and to the Valuer-General and the amount of money at stake is not insignificant. It is also relevant that the issues are of general or public importance and capable of bona fide and serious argument. I grant leave to appeal, to the Court of Appeal, the judgment in Ngāti Whakaue Education Endowment Trust Board v Rotorua District Lakes
Council.1
Judgment
[2] On 2 February 2017 I issued judgment in this proceeding. My summary was:
[1] The Ngāti Whakaue Education Endowment Trust Board owns extensive property in downtown Rotorua. It is governed by the Reserves and Other Lands Disposal Act 1995 which derives from a commitment of the Crown to Ngāti Whakaue under the Treaty of Waitangi. Under that Act the Trust Board owns the land for educational purposes and is statutorily prohibited from selling it. Before 2014 the Rotorua District Council erroneously thought the land was Māori freehold land. It applied a 10 percent discount to the valuation of the land to take account of the constraints on sale of Māori land. In its 2014 rating assessment the Council applied s 21 of the Rating Valuation Act 1998 which provides that where land is subject to lease, “circumstances particular to the property concerned that do not reflect the prevailing market conditions are to be disregarded”. It applied no discount to its valuation of a test property. The Trust Board objected to the Land Valuation Tribunal which declined the objection.
[2] On appeal, I consider s 21 of the Act is a red herring because the reason why it might be subject to discount does not derive from the existence or terms or other circumstances of the lease, but from its inalienability. I hold the valuation should be based on the price that would be set at a notional sale between a willing but not anxious buyer and seller of the Trust Board’s estate which is burdened by the permanent prohibition on alienability. Accordingly the valuation must take into account the effect of the statutory prohibition on alienability. I uphold the appeal.
1 Ngāti Whakaue Education Endowment Trust Board v Rotorua District Lakes Council [2017] NZHC 60, [2017] NZAR 376.
Appeals under the Act
[3] Section 18A(1) of the Act provides that, with the leave of the High Court or Court of Appeal, any party who is dissatisfied with any award or order of the Court may appeal to the Court of Appeal. Section 18A(2) provides:
(2) In determining whether to grant leave to appeal under this section, the court to which the application for leave is made shall have regard to the following matters:
(a) whether any question of law or general principle is involved: (b) the importance of the issues to the parties:
(c) the amount of money in issue:
(d) such other matters as in the particular circumstances the court thinks fit.
[4] Section 18A(3) provides that in granting leave the Court may, in its discretion, impose such conditions as it thinks fit, whether as to costs or otherwise. Under s 18A(4) the decision of the Court of Appeal on any such appeal is final.
[5] Mr Cornegé, for the Council, identified that there is “competing” Court of
Appeal authority on what principles apply to these appeals:
(a) In 2008, in Chief Executive of Land Information New Zealand v Luke
& Ors, Chambers J for the Court examined the legislative history of the Act.2 Mr Cornegé submitted the Court concluded the criteria in s 18A apply to these appeals and the general principles applicable to second appeals do not, though he considered, in practice, the same outcome would be likely produced.3
(b)However, in 2014 in Kent v Upper Hutt City Council, the Court of Appeal agreed the general principles applicable to second appeals are relevant: “The appeal must raise some question of law or fact capable
of bona fide and serious argument in a case involving some interest,
2 Chief Executive of Land Information New Zealand v Luke & Ors [2008] NZCA 43 (per
Chambers, O’Regan and Arnold JJ) [Luke].
3 At [10] – [16].
public or private, of sufficient importance to outweigh the cost and delay of the further appeal”.4
[6] Mr Cornegé submitted that, because the Court turned its mind to the question in Luke, Luke was better authority on this point than Kent where the applicant was self-represented. Mr Prebble, for the Valuer-General, did not consider any conflict was significant but, when pushed, submitted Luke was the better authority. Mr McEntegart noted that Kent is the more recent authority and that the same wording of the test is used in s 97 of the Commerce Act 1986. Under that Act, and drawing on Luke, the usual principles relating to second appeals have been said by
the High Court to apply.5
[7] It is invidious, though I admit enjoyable, for a High Court judge to choose between competing Court of Appeal authorities. But there may not be much of a conflict.
[8] In Luke, the Court devoted seven paragraphs to the question of what principles applied and examined the legislative history in so doing. The Court considered the general principles of second appeals under s 67 of the Judicature Act did not apply to appeals under the Act and the criteria to be applied are those
specified in s 18A(2).6 It considered the four criteria under s 18A(2) should be
evaluated as a whole and not every question of law important to a party which involves a lot of money should be given leave.7 It quoted the statement by the Court of Appeal in Waller v Hider, on second appeals generally, that not every alleged error of law is of such importance to justify further pursuit of litigation already twice considered and ruled upon by a Court.8 The Court referred to the need for its scarce time and resources not to be incurred without realistic hope of benefit.9 While it
concluded that the general principles of appeal under s 67 of the Judicature Act 1908
4 Kent v Upper Hutt City Council [2014] NZCA 622 at [9] (per Randerson J, Harrison and Cooper
JJ).
5 Godfrey Hirst NZ Ltd v Commerce Commission [2016] NZHC 1601 at [12]-[14].
6 Luke at [11], [12], [16].
7 At [17].
did not apply to land valuation appeals, it considered the same outcome is likely to be produced in most cases.10
[9] Luke does not appear to have been cited to the Court in Kent. But the Court in Kent quotes s 18A(2) in full and then agrees with the proposition only that “the general principles applicable to second appeals are also relevant”.11
[10] It is possible there may be some difference between the two approaches. But the judgment in Luke makes it tolerably clear that leave to appeal is unlikely to be granted under s 18A on a question not capable of serious argument. And a question of law or general principle is likely to be at issue for leave to appeal to be granted under the principles stated in Kent. Both sets of considerations are likely to be relevant under each approach. If necessary, I would agree that Luke is the better authority. But in practice here, as in Luke, the two approaches lead to the same result.
Submissions
The Council’s application
[11] The Rotorua District Council (the Council) applied for leave to appeal the judgment in its entirety. It submitted the judgment of 2 February 2017:
(a) wrongly adopted a narrow interpretation of the term “circumstances particular to the property” in s 21 of the Rating Valuations Act 1998 (RVA); and
(b)failed to have regard to the fact that the prohibition on alienation was personal to the Board, in the sense that it agreed to the prohibition and is not inherent to the land.
[12] The Council submitted I should grant leave because questions of law or general principle are involved, the issue is of importance to the parties and the wider
Rotorua public and the amount of money in issue (applying to the rating of 94 properties in downtown Rotorua) is substantial. It also submitted the proposed grounds of appeal are capable of bona fide and serious argument.
The Board’s opposition
[13] Mr McEntegart, in admirably brief submissions for the Ngāti Whakaue Education Endowment Trust Board (the Trust Board), opposed the application on the single ground that it does not raise a question capable of bona fide and serious argument. He submits the purpose of s 21 is clear, the case law is definitive and the Valuer-General’s concern is not reflected in the text of the judgment.
The Valuer-General’s position
[14] The Valuer-General was not involved with the proceeding before the
2 February 2017 judgment was issued. The Valuer-General applied for leave to intervene, under s 37(1)(c) of the RVA, once the application for leave to appeal was filed. I granted leave on 10 April 2017.
[15] The Valuer-General seeks to clarify the approach to valuing properties with restrictions on their sale. In particular, the Valuer-General identifies two issues which have not been fully explored in cases to date:
(a) How should restrictions personal to the owner of land, including statutory restrictions, be considered in rating valuations?
(b)Should statutory restrictions personal to an owner require a reduction in value when there are no other restrictions on land use?
Decision
[16] I am in no doubt that questions of law and general principle are involved in this case, the issues are important to the parties and to the Valuer-General and the amount of money at stake is not insignificant. I consider the issues are of general or public importance. And I accept the issues are capable of bona fide and serious argument.
[17] Having come to the conclusions I did in the judgment of 2 February 2017, I cannot say I accept the substantive submissions of the applicant and Valuer-General. But I cannot rule out the possibility the Court of Appeal might. I consider the Council should have the opportunity to further test its arguments with three more judges and for a more authoritative precedent to be obtained on these issues.
[18] Accordingly, I grant leave to appeal the judgment of 2 February 2017 in its entirety. Because of that conclusion, I do not traverse the substantive arguments in detail in this judgment. That will be for the Court of Appeal.
[19] Having sought leave to intervene on the basis that he bears his own costs, the Valuer-General does not seek costs. The Council does and has succeeded in its application. I award costs in favour of the Council and against the Board. If there is disagreement over costs the parties have leave to file brief submissions within
15 working days.
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Palmer J
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