Townscape Akoranga Ltd v Auckland Council
[2013] NZHC 824
•19 April 2013
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV 2012-404-3373 [2013] NZHC 824
UNDER Judicature Amendment Act 1972 and
AND UNDER Declaratory Judgments Act 1908
IN THE MATTER OF a decision made pursuant to the Weathertight Homes
Resolution Services Act 2006 and Gazette Notice
No. 4866
BETWEEN TOWNSCAPE AKORANGA LTD First Applicant
AND TOWNSCAPE SECURITIES AUCKLAND LTD AND ORS
Second Applicants
AND AUCKLAND COUNCIL First Respondent
AND THE CHIEF EXECUTIVE OF THE MINISTRY OF INNOVATION, BUSINESS AND EDUCATION
Second Respondent
CIV 2012-404-4258
AND UNDER Part 1 of Judicature Amendment Act 1972
IN THE MATTER OF Weathertight Homes Resolution Services Act 2006
BETWEEN AUCKLAND COUNCIL Applicant
AND THE CHIEF EXEUCTIVE OF THE MINISTRY OF INNOVATION, BUSINESS AND EDUCATION
First Respondent
AND TOWNSCAPE AKORANGA LTD Second Respondent
TOWNSCAPE AKORANGA LTD V AUCKLAND COUNCIL HC AK CIV 2012-404-3373 [19 April 2013]
CIV 2012-404-4260
AND UNDER Part 1 of the Judicature Amendment Act 1972
IN THE MATTER OF the Weathertight Homes Resolution Services Act
2006
BETWEEN AUCKLAND COUNCIL Applicant
AND THE CHIEF EXECUTIVE OF THE MINISTRY OF INNOVATION, BUSINESS AND EDUCATION
First Respondent
AND BODY CORPORATE 212138
Second Respondent
Hearing: 18 April 2013
Counsel: J A Farmer QC, A Thorn and M Bullivant for Townscape Akoranga
Ltd and Body Corporate 212138
G J Christie, D J Barr and J R J Knight for Auckland CouncilR B Chan and T I Hallett-Hook for The Ministry of Innovation, Business and Education
Judgment: 19 April 2013
RULING OF HEATH J
This judgment was delivered by me on 19 April 2013 at 10.00am pursuant to Rule
11.5 of the High Court Rules
Registrar/Deputy Registrar
Introduction
[1] Townscape Akoranga Ltd owns 41 apartments in a building situated at 42
Akoranga Drive, Northcote. Townscape Securities Auckland Ltd and others own 35 apartments at 1510 Great North Road, Waterview. The buildings in issue are student hostels.
[2] The Townscape interests have applied for judicial review and declaratory relief in respect of decisions said to have been made by the Chief Executive of the Ministry of Innovation, Business and Education (the Chief Executive) under the financial assistance package provisions of the Weathertight Homes Resolution Services Act 2006 (the Act).1 The Auckland Council (the Council) has been joined as a party with an interest in the outcome of the proceeding, on the basis of an allegation that it is “an additional contributing party” to a payment to be made by the Crown to the owners of the buildings.
[3] Related proceedings have been brought by the Council against the Chief Executive and the Body Corporate of the Great North Road apartments. For present purposes, it is unnecessary to refer to them.
[4] All three proceedings are set down for hearing on 22, 23 and 24 April 2013. On 18 April 2013, I heard from counsel at an urgently convened case management conference at which Mr Christie, for the Council, submitted that the hearing should be adjourned to allow evidence to be called on an issue raised in reply submissions filed by counsel for the Townscape companies, in their proceedings. That application was opposed by Mr Farmer QC, for the Townscape companies. Ms Chan, for the Chief Executive, supported an adjournment, if a need to provide further evidence was established.
[5] At the conclusion of the hearing, I reserved my decision and indicated that it would be delivered early today.
1 Weathertight Homes Resolution Services Act 2006, Part 1A.
The problem raised by the Council
[6] It is necessary to summarise the essence of the Townscape companies’ and the Council’s arguments to understand how the problem raised by the Council arose. In doing so, I am conscious that my present grasp of the facts and issues is limited. Nothing I say in this ruling is intended to indicate any preference on the substantive issues.
[7] The purpose of the financial assistance provisions of the Act “is to facilitate the repair of leaky buildings by providing for certain matters relating to the provision of a package of financial assistance measures to qualifying claimants”.2 The statute envisages contributions being made by the Crown and any “additional contributing party”, a term that is defined to include a territorial authority such as the Council.3 A “qualifying claimant” is one who has an eligible claim in respect of a “dwellinghouse” and meets the contribution criteria specified by the Chief Executive by notice in the Gazette.4
[8] In the Townscape proceedings, issues arise about who makes the decision to provide financial assistance, whether a student hostel is a qualifying “dwellinghouse” and whether the Council agreed to “make, under a contribution agreement, a financial contribution towards the agreed repair costs of the
dwellinghouse concerned”.5
[9] The Townscape companies contend that the statutory decision-making power rested with the Chief Executive.6 The essence of the Townscape claims is that the Chief Executive had a statutory obligation to determine whether a claimant for financial assistance was eligible to receive a payment. If that view were correct, Mr
Farmer QC, for the Townscape companies, contends that eligibility criteria were met
2 In reliance on Weathertight Homes Resolution Services Act 2006, s 125A.
3 Ibid, s 125B(1), definition of “additional contributing party” at para (a)(i). The “relevant territorial authority” is defined in s 125B(1) as the authority for the district in which a qualifying
dwellinghouse is situated.
4 Ibid, s 125B(1), definition of “qualifying claimant”. See also New Zealand Gazette No. 113,
28 July 2011 at 3198–3199.
5 The latter issue arises out of the definition of “additional contributing party”: see para (a)(i)(B)
of the definition set out at para [12] below.
6 Ibid, s 125C.
and the Council, “under a contribution agreement,” was required to make a contribution. The Gazette notice7 set out the qualifying criteria and information for potential claimants.
[10] The Townscape companies complain that having made an eligibility decision in their favour, following consultation with the Council, that decision was changed “because [the Council] advised there [was] no duty of care as it [was] a commercial development. The Townscape interests allege that decision was wrong, in light of the Supreme Court’s decisions in North Shore City Council v Body Corporate
188529 (Sunset Terraces)8 and Body Corporate 207624 v North Shore City Council.9
Based on those decisions, the Townscape companies contend that a duty of care is owed.
[11] In response to Townscape’s claim, the Council pleaded that it was for the Council to determine whether it would make a contribution to a financial package in any given case. As I understand it, the Council’s position is that any “contribution agreement” must be specific to the actual claimant, rather than generic in nature.
[12] The Council denies that the Chief Executive could compel it to make a payment. Reliance is placed on the definition of “additional contributing party” in s 125B(1) of the Act. In full, the definition of “additional contributing party” states:
125B Interpretation
(1) In this Part, unless the context otherwise requires,—
additional contributing party—
(a) means either or both of the following:
(i) the relevant territorial authority, if it agrees to—
(A) participate in the provision of the package of financial assistance measures to qualifying claimants; and
7 New Zealand Gazette No. 113, 28 July 2011 at 3198–3199.
8 North Shore City Council v Body Corporate 188529 (Sunset Terraces) [2011] 2 NZLR 289 (SC).
9 Body Corporate 207624 v North Shore City Council [2012] NZSC 83.
(B) make, under a contribution agreement, a financial contribution towards the agreed repair costs of the dwellinghouse concerned:
(ii) any other party (if any) who agrees to make a contribution (whether financial or otherwise) towards the agreed repair costs of the dwellinghouse concerned; but
(b) does not include a claimant or a lender
(emphasis added)
[13] In their Reply to the Council’s Statement of Defence, the Townscape companies denied the affirmative defence. No particulars of its denial with the Council’s pleading were articulated in that document. However, in reply submissions filed and served on 16 April 2013, the Townscape interests raised the terms of a “Relationship Agreement” between the Crown and the Council to assert that the Council had agreed to make contributions to all eligible claimants, including Townscape. I think I am right in saying that Townscape contends that the
“Relationship Agreement” is the relevant “contribution agreement”.10
[14] Mr Christie, for the Council, argues that the Council was taken by surprise by that submission and further evidence is required to assist in interpretation of the “relationship Agreement”. That is the reason why an adjournment is sought.
Analysis
[15] While it would have been preferable for the Reply to have specified the basis on which the affirmative defence was denied, it is necessary to deal with the application on the facts as they currently stand.
[16] On reflection, it seems to me that there are three options available to me:
(a) First, to adjourn the proceedings and allow further evidence to be adduced; or
10 Weathertight Homes Resolution Services Act 2006, s 125B(1), definition of “contribution agreement”.
(b) Second, to proceed without further evidence; or
(c) Third, to provide an opportunity for further argument on the adjournment issue once more precise information is before the Court as to the type of admissible evidence that might be relevant to any contractual interpretation question.
[17] At the conference, I raised doubts about whether this is a case in which extrinsic evidence should be admitted to assist in the interpretation of a written agreement. My two concerns are premised on alternative approaches to the relevance of the “relationship Agreement”.
[18] The first is based on the primary need for judicial review of a statutory decision to be based on an interpretation of the statute. On this premise, it seems odd that a plaintiff seeking judicial review should be met with a defence to its interpretation of the Act based on an agreement not generally known by or disclosed to the claimant at the time a claim is made. The absence of knowledge of a third party of the matrix of facts against which the agreement falls for interpretation suggests that this may not be a case to which the principles set out by the Supreme
Court in Vector Gas Ltd v Bay of Plenty Energy Ltd11 apply. In other words, to the
extent that it may be necessary to interpret the “Relationship Agreement”, extrinsic
evidence not known to the third party might not be admissible.
[19] An alternative concern is that, if the agreement were publicly available, it may require construction on the basis of the approach taken to public documents. In Opua Ferries Ltd v Fullers Bay of Islands Ltd,12 the Privy Council explained why such documents should be interpreted without consideration of extrinsic evidence. Lord Hope of Craighead, for the Board, said:
[19] There would be much to be said in favour of [the use of extrinsic evidence] if the relevant documents were contained in a contract between the parties which the Court was being asked to construe. If that were so the Court would wish to put itself into the same position as the contracting parties were when they entered into their contract. As Lord Hoffmann said in
11 Vector Gas Ltd v Bay of Plenty Energy Ltd [2010] 2 NZLR 444 (SC). See also, Trustees
Executors Ltd v QBE Insurance (International) Ltd [2011] NZCA 53.
12 Opua Ferries Ltd v Fullers Bay of Islands Ltd [2003] 3 NZLR 740 (PC).
Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 at p 912, when one is interpreting a document of that kind one is seeking to ascertain the meaning which it would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation which they were in at the time of the contract. The parties' knowledge of how the ferry service was in fact being operated from day to day at the time when such a contract was entered into would be part of the background.
[20] But it does not follow that the same approach is to be taken when one is construing a public document. The documents included in the register maintained by a regional council under s 52(1) of the Act have that character. This is, and is intended to be, a public register of passenger transport services. Members of the public who consult the register may come from far and near. They may have some background knowledge, but they may have none at all. In Slough Estates Ltd v Slough Borough Council [1971] AC 958 at p 962 Lord Reid said that extrinsic evidence may be used to identify a thing or place referred to in a public document. But he went on to say that this was a very different thing from using evidence of facts known to the maker of the document but which are not common knowledge to alter or qualify the apparent meaning of words or phrases used in it. As he put it, members of the public, entitled to rely on a public document, ought not to be subject to the risk of its apparent meaning being altered by the introduction of extrinsic evidence. Moreover, the only information which a regional council is obliged by s 53 to ensure is reasonably readily available to the public is that which gives details of the service which the council has registered. The statute makes the position clear. The register is expected to speak for itself.
(emphasis added)
[20] I am not prepared to adjourn the proceeding without receiving from counsel for the Council more specific information as to the extrinsic evidence it considers is admissible and material. If the Council were able to identify material admissible evidence that could affect the outcome of the Townscape proceeding, I would be minded to adjourn the proceeding, rather than allowing it to be part-heard. From the knowledge of the proceedings I have gained through case management procedures, I see pitfalls in taking a two tiered approach to determination of the issues.
[21] As three days have been allocated for the hearing, I am satisfied that, even if further argument on an adjournment took place before the substantive issues were addressed, that there would be enough time for the hearing to be completed.
[22] If the substantive hearing were to proceed, an assessment will need to be made at the conclusion of the first day about the time at which proposed views of the two properties should take place.
Result
[23] For those reasons, I decline to adjourn the proceedings. The hearing will commence at 10am Monday 22 April 2013.
[24] If the Council wishes to pursue an application for adjournment, I shall hear it when the proceedings are called. In support of any renewed application I would expect to receive from counsel specific submissions on the nature of the extrinsic evidence that it wishes to offer. If I were not persuaded that any such evidence could be led, the substantive hearing will proceed.
[25] I also wish to hear from counsel on whether the interpretation of the agreement was put in issue directly by its Statement of Defence, which was filed on
25 July 2012, well before the Council’s evidence was exchanged. If it were, any deliberate decision not to lead extrinsic interpretation evidence may count against an adjournment.
[26] I am conscious that the weekend will intervene. I do not propose to make timetabling directions for the exchange of written submissions on any renewed application for an adjournment. However, I do expect counsel for the Council to inform counsel for the Townscape companies of the points it intends to raise in sufficient detail for them to be answered orally on Monday morning. If that were not to occur it would militate against the grant of an adjournment in any event.
[27] Costs are reserved.
P R Heath J
Delivered at 10am on 19 April 2013
Solicitors:
Adina Thorn Lawyers, PO Box 1753, Shortland Street, Auckland
Simpson Grierson, Private Bag 92518, Auckland
Counsel:J A Farmer QC, PO Box 1800, Shortland Street, Auckland
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