Vercoe v Kordia Limited HC Rotorua CIV-2008-463-000301

[2011] NZHC 618

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

CIV-2008-463-000301

BETWEEN  TAMAOHO WAAKA VERCOE, RICARDUS DEAN PARK, CHARLIE OHAKI ELLIOTT, GRAHAM KAHU TE RIRE, TE RAUOTEHUIA LEONA CHAPMAN AND TIAKI BLAKE HUNIA AS TRUSTEES OF NGA MAUNGA KAITAIKI TRUST

Plaintiffs

ANDKORDIA LIMITED Defendant

Hearing:         29 and 30 November 2010

Counsel:         P J Marshall for the Plaintiffs

A C Callinan and J R C Lees for the Defendant

Judgment:      3 March 2011

INTERIM JUDGMENT OF DUFFY J

This judgment was delivered by Justice Duffy on 3 March 2011 at 4 pm, pursuant to

r 11.5 of the High Court Rules

Registrar/Deputy Registrar
Date:

Solicitors:    Robinson Law P O Box 348 (DX JA31534) Whakatane 3158 for the Plaintiffs Simpson  Grierson  Private  Bag  92518  9DX  CX10092)  Wellesley  Street Auckland 1141 for the Defendant

TRUSTEES OF NGA MAUNGA KAITAIKI TRUST v KORDIA LTD HC ROT CIV-2008-463-000301 3 March

2011

[1]      The Nga Maunga Kaitaiki Trust owns the summit of Mount Putauaki (the Maunga).   Kordia Limited (Kordia) owns communication transmission equipment sited on the summit of the Maunga.  Attached to this is similar equipment owned by third parties who have entered into co-siting agreements with Kordia.   The transmission equipment enables the inhabitants of the Eastern Bay of Plenty region to receive a variety of telecommunications.

[2]      The trustees of the Nga Maunga Kaitaiki Trust (the trustees) no longer want the transmission equipment (the installations) to be sited on the Maunga.  Their long term vision is for the Maunga to be restored to its natural and sacred state without the presence of installations or other structures on its summit.  The desired removal of Kordia’s installations would also entail the removal of the co-siters’ installations.

[3]      The trustees consider that Kordia’s legal rights to have the installations sited on the Maunga are at an end.  Kordia disputes this.  Whilst it accepts that the rights it had under a licence agreement have expired; it maintains that it still has the benefit of statutory rights which permit its installations, and those of the co-siters, to remain on the Maunga.  Nonetheless, Kordia would enter into a new licence agreement with the trustees if the licence fee and other terms were acceptable to it.

[4]      The  issues  for  determination  are  significant  for  both  parties,  as  the declaratory judgment will determine whether or not the installations of Kordia and the co-siters remain on the summit.  The key issue is whether Kordia has retained its statutory right to have its installations located on the Maunga.   If those rights still exist, there is a secondary issue regarding their scope and whether they extend to items that were later added to the installations.  I shall deal with each issue in turn.

Background facts

[5]      The facts are not in dispute. The surrounding circumstances have arisen from the mid-1980s central government restructuring.  Before the creation of state owned enterprises,      which      occurred     as      part      of     that      restructuring,     the Broadcasting Corporation of New Zealand (BCNZ) was responsible for radio and

television communications in New Zealand.   The BCNZ operated under a licence provided by the New Zealand Post Office.

[6]      In 1972 the Maunga was owned by Tarawera Forests Ltd (Tarawera).  In that year a licence agreement (the 1972 licence) was entered into whereby Tarawera gave the BCNZ the right to erect and operate a television broadcast transmitting and receiving station.   The licence was for a term of 21 years and expired in 1993. During the course of this licence, the BCNZ erected a building and subsequently other structures and equipment on the Maunga.

[7]      As part of the restructuring of central government and consequential creation of state owned enterprises, the BCNZ was replaced by two state owned enterprises: Television New Zealand and Radio New Zealand.  The transmission assets formerly owned by the BCNZ, including the installations on the Maunga, were vested in Television New Zealand.  At first, Television New Zealand operated the installations through a subsidiary company called Broadcast Communications Limited (BCL).

[8]      By 1995,  the  1972  licence  had  expired.    Despite  there  being  a  right  of renewal in the 1972 licence, the parties (which by then were BCL and Tarawera) entered a new licence agreement (the 1995 licence).  This is the licence on which the Court is now to adjudicate.  Although the licence in fact commenced in 1995, under its terms it was deemed to have commenced in 1993 and it ran for a period of 12 years from that date.  It could be determined sooner by surrender of the licence or termination by the licensor, pursuant to clause 6(e).   The licence has now run its course, having expired in 2005.

[9]      Between  2003  and  2006  there  was  further  reorganisation  of  Television New Zealand and its subsidiaries, which resulted in BCL being renamed “Kordia”. The installations on the Maunga remained vested in Kordia, the defendant in this proceeding.

[10]     In 2004, the Maunga was separately surveyed and a new certificate of title defining its boundaries was issued.   Also in 2004, the Mount Putauaki Trust was created by charitable trust deed.  On 8 November 2004, the Maunga was vested in

the trustees of the Mount Putauaki Trust.  In 2005, the trust changed its name to the Nga Maunga Kaitaiki Trust; and was  granted exempt status as a charity by the Inland Revenue Department.

[11]     Due to these changes, the trustees, as owners of the Maunga, now have the same legal status (in terms of rights and obligations) under the licence and legislation as Tarawera once did.  Similarly, Kordia has the same legal status (in terms of rights and obligations) that BCL once had under the legislation and 1995 licence.

The 1995 Licence

[12]     Under the 1995 licence, BCL (the name of the licensee at the time) granted third parties the right to attach their transmission equipment to the installations. Further, BCL wanted to achieve three things under the 1995 licence:

(i)to continue to operate and maintain a communications facility on the summit of the Maunga for broadcasting and telecommunications;

(ii)to maintain the existing power transmission line connecting the summit to the main feed line; and

(iii)to use and maintain the existing access road in common with Tarawera, the licensor, and other persons authorised under the licence.

[13]     Clause 1 sets out the rights which the licensor granted to the licensee, as follows:

(a)      Grant Of Licence

Full right and liberty to occupy that part of the land coloured red on the attached plan (the licence area) for the purpose of continuing to operate  and  maintain  on  and  from  the  licence  area,  at  its  sole expense,   a   communications   facility   (the   facility)   consisting principally of a building approximately 185 square metres in area and constructed of concrete block, concrete or similar fireproof material.

[14]     The  licensee  was  given  the  right  to  extend  the  building,  subject  to  the licensor’s prior written approval, which was not to be unreasonably withheld.  This approval was also subject to clause 5(m) of the licence, which safeguarded Maori sacred sites.  The facility included a 65 metre high steel tower, necessary technical equipment, and associated aerial systems.

[15]     Under clause 1(b), the licensee was given full rights of access to test, inspect, repair or renew the existing power transmission line; and under clause 1(c), full rights to use and maintain in common with the licensor and other named persons the access road referred to in the licence.

[16]     Clause  3  provided  for  an  annual  licence  fee  which  was  initially  set  at

$22,000, plus GST.  Provision was made for adjustment of the annual licence fee in clause 4, and if the parties were unable to agree on a process, dispute resolution was incorporated at clause 4(f).

[17]     Under clause 5, there were general licensee covenants regarding maintenance of the structures on the subject property.

[18]     In clause 6, there were mutual covenants.   This is the clause that is most relevant to the questions to be determined, particularly subclauses 6(b) and (d).

[19]     Under clause 6(a), the licensor was prohibited from erecting, authorising, or permitting the erection by other persons of buildings or structures within a certain radius of the existing structures.

[20]     Clause 6(b) provided that there was no compensation payable by the licensor at the determination of the licence. This clause read as follows:

(b)      No Compensation Payable By Licensor:

The licensor shall not be called upon or be liable to pay on the expiration or sooner determination of this licence any compensation for any part of the facility or transmission line or ancillary apparatus or appliances left on the land subject however to the right of the licensee to remove any part or all of the same in accordance with the provisions of 6(d).

[21]     Under clause 6(c), the licensee, its employees, agents and contractors had rights of entry on the land at all times for the purpose of using, maintaining or upgrading the access road; and of testing, inspecting, repairing or renewing the transmission  licence  and  facility  and  equipment.     However,  the  licensee  was required, whenever possible, to notify the Forest Manager of the proposed dates and times of such visits.

[22]     Clause 6(d) provided for the right of removal of installations by the licensee. It read as follows:

(d)      Right Of Removal Of Installations By Licensee:

Upon the expiration or sooner determination of this licence, the licensee shall be entitled to remove (and if requested by the licensor at least three months prior to the expiry or sooner determination of this licence shall remove) the facility and the transmission line and any apparatus or appliances ancillary thereto PROVIDED THAT such removal is effected within three months from the date of termination of this licence and that part of the land occupied by the facility and transmission line is left in a neat and tidy state and condition.

[23]     Clause  6(e)  provided  that  if  at  any  time  the  licensee  defaulted  in  the performance or observance of any of the terms and conditions, the licensor had the following options:

(i)       to give the licensee three months notice to remedy the default;

(ii)if  the  default  was  not  remedied  within  that  time,  or  was irremediable, the terms provided:

The term of the licence shall absolutely cease and be determined at the expiration of such notice but without prejudice to the rights of the licensor in respect of any antecedent breach of the terms and conditions contained therein.

[24]     Under clause 6(f), the parties shared road user costs.

[25]     Clause 6(g) provided a dispute resolution process for disputes, other than determining the adjustment of the annual fee.

[26]     Clauses 7 and 8 were mechanical.  Under clause 7, the licensee was entitled to determine the licence after giving three or more months notice.  Clause 8, which dealt with requests for co-siting by a third party, provided that the licensor might at any time request the licensee to investigate whether it was practicable to co-site a third party whose proposed operations would in whole or in part benefit Kawerau or the wider community.

[27]     Under clause 10, the licensee was given a first right of refusal following the expiry of the licence.  No rights of renewal were given to the licensee.  Clause 10 provided:

10.      Right Of First Refusal:

That at the expiration of the term of this licence AND if the licensee shall have observed and performed the covenants and conditions on the part of the licensee contained or implied AND if the licence has not earlier been determined in terms thereof AND if the licensor shall decide that it wishes to grant a new licence for any use of the land for the continuation therefrom of the operation of the facility, the licensor shall be entitled to set new terms and conditions for the right to occupy this summit … but the licensor shall first give notice of its intention to do so to the licensee, and the licensee shall have not less than three months from receipt of that notice to advise the licensor in writing if it is prepared to accept a new licence on those terms and conditions.   If the licensee is unwilling to do so, the licensor may offer use of the land to other prospective users on the same terms and conditions as were notified to the licensee.   If the terms and conditions change from those originally offered to the licensee, the licensor shall give to the licensee a further right to advise the licensor within six weeks of receiving notice of the amended terms and conditions that it is prepared to accept the same. If the licensee does give notice accepting new terms and conditions, the licensor shall thereupon grant a new licence to occupy the land on those terms and conditions.

[28]     Clause 10 also provided that the clause survived the expiration of the licence.

Relevant Legislation

[29]     At the time of the central government restructuring and the creation of state owned enterprises, Parliament passed the Telecommunications Act 1987 (the 1987

Act) to regulate the supply of telecommunication services and equipment and to provide for the licensing and regulation of radio apparatus.   Section 3 of that Act

restricted the persons who could erect, construct, establish, operate, or maintain any telecommunications network to network operators.  Originally, Telecom Corporation of New Zealand Ltd was the sole network operator.   Over time, the category of network operators was extended.   In 1990, BCL was declared a network operator pursuant to s 2A of the 1987 Act by the Telecommunications Network Operators Order 1990 SR 1990/285.

[30]     One of the aims of the 1987 Act was to protect and confirm the legality of what was already in use for the purpose of telecommunications.  This was achieved

by s 20, which provided:

20.      Protection of existing works – Any existing works, fixed to or installed over or under any land that
is not owned by the network operator which owns the works, shall be deemed to be lawfully fixed or installed and shall continue to be fixed or installed until the network operator otherwise decides and no person other than the network operator shall have any interest in any such works by reason only of having an interest in the land.
[31]	Section 2 defined “existing works” as follows:
“Existing works” means any works relating to the provision of telecommunications under the Post Office Act 1959 (or any former Act) that were wholly or partly in existence or work on the construction, erection, or laying of which commenced before the 1st day of January 1988; but does not include any such works that, after that date, have been altered or moved or added to in such a way as to substantially alter their character or location, as the case may be.
[32]	Later   in    2001,    the    1987   Act   was    repealed    and   replaced   by	the

Telecommunications Act 2001 (the 2001 Act). The protection provided in s 20 of the

1987 Act was continued in s 155 of the 2001 Act, which provided:

155     Protection of existing works

(1)       Any existing works or existing lines owned by a network operator that are fixed to, or installed over or under, land that is not owned by the network operator are deemed to be lawfully fixed or installed, and continue to be lawfully fixed or installed, until the network operator otherwise decides.

(2)       No person other than the network operator has an interest in any of those works or lines by reason only of having an interest in the land.

[33]     Section 5 of the 2001 Act defines “existing works” as follows:

existing works –

(a)       means any works relating to the provision of telecommunications under the Post Office Act 1959 (or any former Act) that were wholly or  partly  in  existence,  or  for  which  work  on  the  construction, erection, or laying commenced, before 1 January 1988; and

(b)       includes, for the purposes of subpart 2 of Part 4, any works relating to  any  conveyance  that  constitutes  broadcasting  under  the  Post Office Act 1959 (or any former Act) that were wholly or partly in existence, or for which work on the construction, erection, or laying commenced, before 1 January 1988; but

(c)       does not include any works that, after that date, have been altered or moved or added to in a way that substantially alters their character or location, as the case may be.

[34]     Under s 5, “network operator” is defined as any person declared to be a

network operator under s 105 of the 2001 Act or s 2A of the 1987 Act.

[35]     The trustees contend that the network operators’ decision to enter the 1995 licence signifies a decision to abandon its statutory rights to have its installations on the Maunga.  This occurred when s 20 of the Telecommunications 1987 Act was in force.  With this in mind, both parties changed their focus from s 155 to s 20 of the

1987 Act during the course of the hearing, leading them to consider the savings provisions of the Interpretation Act 1999.

[36] Under the Interpretation Act, the 2001 repeal of the 1987 Act does not affect actions taken during its lifetime:

17       Effect of repeal generally

(1)      The repeal of an enactment does not affect –

(a)      The validity, invalidity, effect, or consequences of anything done or suffered:

(b)      An existing right, interest, title, immunity, or duty: (c)      An existing status or capacity:

(d)      An   amendment   made   by   the   enactment   to   another enactment:

(e)      The previous operation of the enactment or anything done or suffered under it.
18	Effect of repeal on enforcement of existing rights
(1)	The repeal of an enactment does not affect the completion of a matter or thing or the bringing or completion of proceedings that relate to an existing right, interest, title, immunity, or duty.
(2)	A repealed enactment continues to have effect as if it had not been repealed  for  the  purpose  of  completing  the  matter  or  thing  or bringing or completing the proceedings that relate to the existing right, interest, title, immunity, or duty.
21	Powers exercised under repealed legislation to have continuing effect
Anything  done  in  the  exercise  of  a  power  under  a  repealed enactment, and that is in effect immediately before that repeal, continues to have effect as if it had been exercised under any other enactment –
(a)	That, with or without modification, replaces, or that corresponds to, the enactment repealed; and
(b)	Under which the power could be exercised.
[37]	Thus,	any   effect   of   s   20   would   be   saved   by   s   17(1)(a)   of	the

Interpretation Act. Section 18 of the Interpretation Act would allow the completion of any decision made under s 20 before its repeal, i.e. the decision to enter into the

1995 licence if not completed until the licence’s expiry in 2005.

[38] Further, the legal consequences of a decision to forgo the statutory protection of s 20 remain effective for all time through s 17(1)(a)-(c) of the Interpretation Act. Thus, the passing of the 2001 Act, with s 155 providing the same statutory protection as s 20 of the 1987 Act, could not provide a new opportunity for BCL/Kordia to undo any earlier decision to forgo the protection of s 20 by claiming that its occupation on the Maunga was protected by s 155 of the 2001 Act.

[39] Alternatively, the similarity of s 20 of the 1987 Act and s 155 of the 2001 Act would be enough to qualify those provisions under s 21 of the Interpretation Act. When it comes to presuming that the presence of existing works on land owned by persons other than a network operator is legal, the qualifying conditions for the presumption of legality to apply are substantially the same in both sections expressed

slightly differently.  Both provisions require the existing works to have been in place before 1 January 1988 (as defined in the interpretation section of each relevant statute).  Both provisions require the existing operations to be owned by the network operator.  Both provisions give the network operator a choice as to whether or not the statutory protection will continue to apply.  Both provisions prevent the common law doctrine of merger such that ownership of the existing works cannot pass to the landowner simply because the existing works are on the landowner’s land.

[40] Under s 21 of the Interpretation Act, an act done under repealed legislation can be treated as having been done under subsequent legislation that replaces or corresponds with the repealed legislation. Thus, under s 21 of the Interpretation Act, a decision to forgo the statutory protection provided by s 20 of the 1987 Act can be treated as having been done under s 155 of the 2001 Act; even though that provision came into force after this decision was made.

[41]     Hence, the outcome is the same whether the legislative route followed treats s

20 as continuing to apply after repeal by virtue of s 17 and s 18 of the Interpretation Act, or applies s 155 through reliance on s 21 of the Interpretation Act. When it comes to placing certain actions in their timeframe and how they might relate to the legislation, I will refer to the legislation that was then in place, but otherwise I intend to refer jointly to each provision.

Trustees’ argument

[42]     The trustees contend that BCL’s entry into the deed of licence unequivocally indicated a decision to forgo the ongoing statutory protection granted to their installation.  They argue that acceptance of the finite term of 12 years, with no right of renewal, expresses BCL’s intent to restrict its rights to have its installations on the Maunga to the 12 year term of the licence. Accordingly, the trustees contend that the natural consequence of clauses 2 and 6(b) and (d) is that BCL has made itself liable on the request of the licensor to remove the installations upon the expiration (or sooner determination) of the licence.

[43]     In answer to Kordia’s argument that a network operator cannot waive public rights of protection for existing works, the trustees argue that the decision to enter into the fixed term licence is not a waiver of the statutory protection in s 20 but is instead the exercise of the s 20 discretionary power provided to network operators. Thus, the trustees contend that the law on waiver of statutory rights on which Kordia relies is not applicable.

[44]     If their main argument is not successful, the trustees alternatively challenge the rights of occupancy enjoyed by additions to the installations.  The trustees accept that, save for their argument about Kordia’s loss of its statutory protection,  the installations qualify as protected existing works and that whatever has been added to them has not substantially altered their character in a way that would cause them to lose this status.  However, they do not accept that the additions to the installations are themselves necessarily protected as existing works; and challenge the rights of occupancy on this basis.

Kordia’s argument

[45]     Kordia disputes the trustees’ interpretation of s 20 and thus of s 155.  Kordia argues that for a network operator to decide “otherwise” than to benefit from the protection of s 20, there must be a clear and unequivocal expression of that intent; and that the decision to enter into a 12 year licence does not qualify as such an expression.   Moreover, Kordia contends that the reasons to support an inferential abandonment, if such were possible, are not made out; as the terms of the 1995 licence  provide  the  licensee/network  operator  with  additional  rights  to  those provided by the statute.  Kordia also points to the arrangements it has entered into with the co-siters since the 1995 licence began as being conduct consistent with it treating its statutory rights as ongoing, which, Kordia maintains, serves to confirm that there has been no decision to forgo the statutory protection.

[46]     In  addition, Kordia argues that there is no power to  waive the statutory protection given in s 20 and s 155.  Here, Kordia relies on well-established common law principles, which are also set out in JF Burrows and RI Carter Statute Law in New Zealand (4th ed LexisNexis, Wellington, 2009) at 35-40.

Discussion

[47]     I do not accept Kordia’s second argument that a network operator has no power to waive the statutory protection given in s 20 and s 155, as I consider that the well-established principles against a public authority waiving statutory rights are inapplicable.   The cases in which those principles were established involved legislation that made no provision for waiving the rights concerned; whereas the

1987 and 2001 legislation specifically provide for this.   Via s 20 and its s 155 replacement, Parliament specifically authorised a network operator to abandon the protection granted by these provisions, if the network operator so chooses.   The statutory  inclusion  of  this  proviso  indicates  that  Parliament  intends  network operators to have the authority to choose whether or not they will continue to have their operations affected by s 20 or s 155.  Thus, I accept the trustees’ argument that the relevant issue is whether the discretionary authority to forgo the statutory rights has  been  exercised.    It  follows  that,  subject  to  the  usual  administrative  law restrictions on the exercise of statutory discretion (which have not been raised in this proceeding) any exercise of this discretion will be lawful and able to be relied upon by all parties affected by the decision.  Once a network operator chooses to forgo the statutory protection, the land owner is entitled to treat his or her land as no longer subject to occupation by the existing works and to plan accordingly.   To read the legislation in any other way would lead to impractical and unreasonable outcomes for all concerned.

[48]     However, I do accept Kordia’s primary argument that there needs to be an unequivocal decision to abandon the statutory protection given to existing works before a network operator will be held to have given up that protection.  Both s 20 and s 155 provide that the installations shall be deemed to be lawfully fixed or installed and to continue to be lawfully fixed and installed until the network operator decides otherwise.   Before this protection is lost, the network operator must specifically turn its mind to the question of whether or not it wants to divest itself of the benefit of this presumption.  This seems to me to be apparent from the natural meaning of the provisions.  I consider that this interpretation also accords with the purpose of the provisions.

[49]     By deeming the existing works of network operators to be legally fixed and installed,  Parliament  precluded  anyone  from  asserting  that  the  separate  legal character of new entities, which were taking on the role of a network operator, prevented them from enjoying the same legal rights that central government could have claimed for those works.  In this way, Parliament also precluded the operation of  the  common  law  doctrine  of  “merger”,  which  would  have  seen  the  works becoming the property of the land owner through being sited on its property.   I consider, therefore, that with s 20 (and its successor s 155) Parliament intended that a network operator could only deprive itself of the statutory presumption after having expressly and unequivocally turned its mind to this question, and a decision was made to this effect.   Without this much, the certainty of the legal occupation of existing works on another’s land would be in doubt.

[50]     The view I have reached on the need for an express and unequivocal decision to forgo the statutory protection is consistent with how other courts have seen the requirements for the abandonment of statutory rights: see Ko v Chamberlain HC Auckland CIV2006-404-3279, 21 May 2007, (2007) 8 NZCPR 261; and Robertson v Gilbert HC Auckland M1603-IMO1, 24 May 2002.

[51]     The trustees have also sought to claim ownership of the existing works. However, as it is clear that the authority to forgo the statutory protection does not override the legislation’s barrier to the doctrine of merger, the doctrine still has no effect.  The choice the legislation gives to a network operator is confined to the right for the existing works to be on the landowner’s land.  There is no choice regarding the ownership of the existing works.  Thus, an existing work can never become the property of the landowner simply through his or her ownership of the land.   It follows that a decision to forgo the statutory protection also entails a decision to remove the existing works from the land.  This is because once the presumption of lawful  occupancy  of  the  land  is  removed,  absent  other  authority,  continued occupation constitutes trespass.  At this stage, the landowner may remove the works from its land; but this would be based on the rights available to a landowner faced with trespass, not because the landowner had acquired ownership of the works.

[52]     I now turn to consider whether BCL’s decision to enter into a finite term

licence can amount to a decision to forgo the statutory protection it enjoyed under s

20  and  now  under  s  155.     There  is  no  evidence  that  BCL  expressly  and unequivocally decided that by entering into the licence for a term of 12 years, it would lose its protection under s 20 or s 155 at the end of that term.   This is a complete answer to the trustees’ claims.   However, in case I am wrong about the need for an unequivocal and express decision under s 20 or s 155 to forgo the statutory presumption, I will consider the type of circumstances which might allow this to result by implication.

[53]     I consider that the need for certainty both in relation to the network operator and the landowner would require that before the statutory presumption could be lost by implication the party asserting such an inference would need to show that there were unequivocal reasons for doing so.  Here the trustees have not established that there are such reasons.

[54]     First, the trustees have not shown that the overlap between the rights and benefits BCL/Kordia obtained under the licence and the statutory protection is so similar that BCL/Kordia’s decision to accept licence rights of 12 years duration must necessarily  be  understood  to  entail  a  decision  to  relinquish  the  benefit  of  the statutory presumption in s 20 and to replace it with finite benefits under the licence.

[55]     Secondly, the trustees cannot establish that the parties to the licence intended it to confine the statutory presumption to the duration of the licence.  The trustees are in a difficult position regarding the factual matrix of the parties’ decision to enter into the 1995 licence, because they were not involved at the time and so they have no knowledge of this.

[56]     Kordia has not provided a detailed analysis as to the differences between the benefits BCL obtained under the 1995 licence in contrast to s 20.  However, I do not think this is fatal to its argument.  As the defendant in this proceeding, Kordia does not need to provide this analysis.  It was for the trustees to do so.  Moreover, mere lack of clarity as to why BCL entered the licence when it already had rights of

occupancy cannot convert its decision to enter into the licence into a decision to forgo the protection of s 20.

[57]     The trustees accept that the installations have not expanded in a way that would take them outside the definition of “existing works”, so the rights acquired under the 1995 licence were not needed to account for that event.

[58]     I acknowledge that it is somewhat difficult to see why BCL entered into the

1995 licence when at the time s 20 gave it the legal protection it required for its installations to be located on the Maunga.  This is especially so given that BCL was obliged to pay an initial annual fee of $22,000, which may have been increased during the term of the licence.  However, the payment of an annual licence fee does suggest  that  BCL considered  it  was  getting  rights  under  the  1995  licence  that improved on its position under s 20 of the 1987 Act.  Under s 4 of the State Owned Enterprises Act 1986, one of the principal objectives of a state owned enterprise is to be a successful business.  Paying $22,000 and upwards for rights that go no further than those already granted under statute is hardly acting in a successful businesslike manner.

[59]     It is apparent to me that the 1995 licence did give BCL/Kordia additional benefits to those under the legislation.   The licence permitted BCL to extend an existing building, subject to Tarawera’s approval, which is more than BCL/Kordia could do under s 20 or s 155.   Further the licence resulted in the right to use and maintain an access road to the installations; and gave BCL, subject to payment of road user charges, permission to use other roads in the Tarawera Forest for the purpose of accessing the installations or its transmission lines.  Access rights of this character appear to go beyond the access rights which owners of “existing works” enjoyed under s 12 of the Telecommunications Act 1987 and now under s 125 of the Telecommunications Act 2001.   Thus, to this extent the rights and benefits BCL/Kordia enjoyed under the 1995 licence supplemented the “existing works” protection its installations had under legislation.

[60]     BCL/Kordia’s  conduct  following  the  1995  licence  is  consistent  with  its

argument that its decision to enter into the 1995 licence was not a decision to forgo

its statutory rights to have its installations on the Maunga.  The licence agreements it has with the co-siters are for terms that exceed the 12 year term of the 1995 licence. BCL/Kordia is hardly likely to have done this if it intended the 1995 licence to limit its statutory rights to the term of the licence.  Subsequent conduct can be used as an aid to ascertaining contracting parties jointly held intentions: see Gibbons Holdings Ltd v Wholesale Distribitors Ltd [2008] 1 NZLR 277. In the same way, I consider that an objective assessment of a network operator’s subsequent conduct can be helpful when ascertaining whether a particular event amounts to a decision to forgo the statutory protection given to “existing works”.

[61]     It follows that I find there is nothing to support an inference that the statutory

protection was lost through BCL’s decision to enter into the 1995 licence.

[62]     Ownership of the installations is vested in Kordia.  Kordia is entitled to have these installations fixed or installed on the Maunga by virtue of s 155, which has continued the rights that were initially conferred by s 20.

[63]     This leaves the trustees’ subsidiary argument regarding whether the additions put in place over time to the installations also qualify as “existing works”.   In principle, if the additions do not qualify as “existing works”, they are not protected by s 20 or s 155.

[64]     Insofar as the additions are attached to Kordia’s installations, they can be said to be affixed to the installations and not to the Maunga itself.   Section 20 has expressly excluded any possibility of existing works becoming the property of the landowner through the doctrine of merger.  As Kordia’s installations are its property, anything directly attached to them that has not altered their character so as to cause them to lose their “existing works” status should be of no concern to the trustees. However, I am not prepared to make findings on this topic at this time.

[65]     The  trustees’ subsidiary  argument  potentially  affects  the  rights  presently enjoyed by the co-siters, who have agreements with Kordia to install their telecommunications works on Kordia’s installations after 1 January 1988.  I have not heard  from  these  co-siters,  whose  interests  may  be  adversely  affected  by  any

findings made on their rights under s 20 and s 155.   I consider that I should hear from them before making further findings: see De Luxe Motor Services (1972) Ltd v Minister of Education [1990] 1 NZLR 27. Although this case was a judicial review, the principle requiring potentially affected parties to be joined in the proceeding is applicable to a declaratory judgments proceeding. Consequently, any issues which may determine the rights of co-siters will be set to the side. The findings and declaratory orders I am prepared to make are confined to the rights of the trustees and Kordia. However, I will make some observations, as follows.

[66]     The statutory protection is limited to existing works owned by a network operator: s 20 specifically refers to existing works on “land that is not owned by the operator which owns the works”, and s 155 refers to existing works “owned by the network operator”.

[67]     The definition of “existing works” in both Acts is broad enough to include additional  works  after  1  January  1988  that  have  not  substantially  altered  the character or location of the existing works, where the same owner owns the original qualifying works, as well as the additional works.  Unless the definitions are read in this way, any such additions could be outside the statutory protection, which would be a nonsensical result.  Parliament has provided that protection for existing works would continue after they had been modified, if those modifications did not substantially alter their character.   Refusing to treat additions or alterations of this kind as part of the existing works would undermine this purpose.  Thus, s 20 and s 155 protect any additions by BCL/Kordia to works that it owns that have not substantially altered the character or location of those works when owned by the original network operator.

[68]     Regarding the additions to the existing works added before 1 January 1988 and owned by co-siters, insofar as the co-siters qualify as “network operators”, they may also be covered by the statutory protection.  Whilst the works must have been present before 1 January 1988, the network operator who now owns the works did not have to have been in existence at that time.

[69]     What is less clear to me is whether persons who had no ownership of any existing works on the Maunga before 1 January 1988 can obtain the benefit of s 20 and s 155 by adding to Kordia’s installations in a way that does not substantially alter those installations.  It may be said that as the installations are Kordia’s, it is for Kordia to decide which co-siters to add to the installations.   However, I will not determine this question now.

[70]     For the reasons set out above, I make the following declarations in answer to questions one and four of the trustees’ prayer for relief in the amended statement of claim:

(a)       Question one:

Was the 1995 licence a decision or evidence of a decision on the part of BCL/Kordia to end the deeming provisions of either s 20 or s 155 prior to or on the expiration of that licence?

Answer:

No,  the  decision  to  enter  into  the  1995  licence  did  not  end  the deeming provisions in either s 20 or s 155.

(b)      Question four:

Did the definition of “existing works” that falls within the statutory provisions include equipment (including antenna) that was added to, or had been replaced on Kordia’s installations for, by, or on behalf of Kordia or its predecessors after 1 January 1988?

Answer:

Yes,  the  equipment  described  above  forms  part  of  the  “existing works” that are protected by s 20 or by s 155.

[71]     Questions two and three, which relate to the rights of co-siters who have

added to Kordia’s installations, are not answered for the reasons given herein.

[72]     I propose to deliver this judgment as an interim judgment dealing only with questions one and four of the prayer for relief.  The trustees can either discontinue pursuing  questions  two  and  three  in  this  proceeding  and  commence  a  fresh proceeding that includes the co-siters affected by the trustees’ subsidiary argument, or the trustees can apply to amend this proceeding by including as parties the co- siters who are at risk of an adverse finding on the continuation of the rights they currently enjoy under their agreements with Kordia.

Duffy J