Ipsofactoj.com: International Cases [2000] Part 5 Case 3 [NZCA]


COURT OF APPEAL, NEW ZEALAND

Coram

Attorney General

- vs -

Hull

RICHARDSON P

KEITH J

TIPPING J

29 JUNE 2000


Judgment

Keith J

THE PROCEEDINGS AND THE RESULT

  1. The law has long empowered the State to acquire land for public works, at current market value, by purchase or taking. When in 1981 Parliament last revised and consolidated the principal statutory provisions in the Public Works Act it required the State to offer the land back to the person from whom it had been taken if the land was no long required for public works. The previous owner is to have the opportunity to buy the land at current market value: see s 40 set out in para [37] below.

  2. The respondents ("the Hulls") say that their Albany farm land acquired from them in 1976 for "State housing purposes" was no longer required for those purposes by the time the new Act came into force on 1 February 1982 and that they should be able to buy it back at 1982 values, or 1983 values because a year was a reasonable time to have elapsed before the offer back was made. The Attorney-General, on the other hand, says that the obligation to offer the land back did not arise until 15 May 1989 when it was no longer required and when it was in fact offered back. The parties agree that the critical date is either

    1. some time before 1 February 1982 in which event 1983 values apply or

    2. 15 May 1989: no intermediate date is suggested.

    The Attorney-General was sued on behalf,

    • first, of the Chief Executive of Land Information New Zealand, who with his predecessors was the statutory officer required under s 40 to make the offer, and,

    • second, of the Queen as registered proprietor of the land.

  3. In the High Court Randerson J found in favour of the Hulls, concluding that:

    1. at the time the new provision came into force the land was not held for "State housing purposes" and

    2. the Court had the power to make that decision even though the relevant officials had not so decided at the relevant time.

    In a second judgment concerned with relief, he declared that the Crown had breached its statutory duty to offer the land back to the Hulls at the appropriate time and that it ought to have offered the land back no later than 1 February 1983. The price to be paid by the Hulls was to be determined at that date.

  4. The Crown challenges both of Randerson J’s conclusions and also the relief he awarded. Because we conclude that the land continued to be held for "State housing purposes" after 1982 and 1983, we disagree with Randerson J’s first conclusion and allow the appeal. It follows that we need not rule on the second substantive issue and the matter of remedies. We do however comment on them.

    URBAN DEVELOPMENT IN THE ALBANY BASIN

  5. The Hulls acquired the land in issue, totalling about 47 hectares, in 1963 and used it for a dairy farm. From 1963 the Crown began buying land for further urban development in the Albany Basin. By 31 July 1974 the Associate Minister of Works and Development was writing to the Hulls about the proposed taking of their land. He referred to the fact that the Government, with the active cooperation of the Waitemata County Council and the Auckland Regional Authority, had been engaged in the planning of the Albany Basin as a major extension to the Auckland metropolitan area. He continued:

    As part of this programme of land acquisition to meet future needs in the Auckland metropolitan area for rental house construction, land for sale for private selection and to implement other aspects of development policy, Government has already acquired some 1600 acres of a total of 5400 acres in the Basin.

    To ensure the orderly development of the Basin as a new urban community with shopping, commercial and recreational facilities as well as places of work for future residents, in step with population growth, Government now intends to acquire a further 423 acres of land which includes property owned by you as described below ....

  6. He then mentioned that he had signed a notice of intention to take the land under the provisions of the Public Works Act 1928. The Hulls would receive formal notification and be approached by the Ministry of Works and Development with the purpose of purchasing from them the land required on mutually satisfactory terms. Only if agreement could not be reached by negotiation would consideration be given to the use of the compulsory powers of acquisition.

    The total project [he continued] is a large one which will take a considerable number of years to complete. According to their location therefore some properties will not yet need to be acquired and will in the meantime be able to be retained in their present use and occupation subject to right of entry for survey and investigation. None of the properties subject to the Notice will be required for at least two years ....

  7. The Gazette notice of 1 August 1974, scheduling the Hulls’ two pieces of land and the twenty-four others making up the 423 acres mentioned by the Minister, was in these terms:

    Notice of Intention to Take Land in Blocks III, IV, VII, and VIII,

    Waitemata Survey District, Waitemata County, for Development

    Notice is hereby given that it is proposed under the provisions of the Public Works Act 1928, to take for development the land described in the Schedule hereto and to develop such land for a new town; and notice is hereby further given that the plan of the land so required to be taken is deposited in the post office at Albany and is there open for inspection; that all persons directly affected by the taking of the said land should, if they have any objections to the taking of the said land, not being an objection to the amount or payment of compensation, make a written objection and send it within 40 days after the first publication of this notice, to the Town and Country Planning Appeal Board at Wellington; and that, if any objection is made in accordance with this notice a public hearing of the objection will be held unless the objector otherwise requires and each objector will be advised of the time and place of the hearing.

    [emphasis added]

  8. The Hulls’ notices of objection under the 1973 amendments to the 1928 Act were resolved by the Crown entering into an agreement under s 32 of the Public Works Act to acquire the land for about $1 m. The Ministerial notice of intention to take the land which led to that agreement "confirm[ed] the intention of taking the land for development". The covering letter somewhat more specifically confirmed the Government’s intention to purchase land for "further urban development in the Albany Basin". The agreements themselves are not in evidence.

  9. The course of action involving the Hulls and the Crown is to be seen in the context of the Crown’s wider plan for the development of the Albany area. A steering committee consisting of representatives of the Waitemata County Council, the Auckland Regional Authority, the University Grants Committee and the Ministry of Works prepared an outline development plan "taking a long look ahead" and "recommending the direction and form of urban growth for the Basin as a whole". Its report of December 1973 (released at the time of the approaches to the Hulls and the other owners) to the Minister of Works and Development and the Minister of Housing ranged very widely as indicated by the headings to its chapters (each including proposals): employment, commercial development, industrial development, residential development, recreation and transportation, among others.

  10. The committee recommended to the two Ministers that 200 acres of land be set aside as a sub-regional centre. Preliminary steps were being taken for the Housing Division of the Ministry of Works to acquire all privately owned land within that area under the 1928 Act. The report proposed that 350 to 400 acres of land be allocated for industrial development and that the government secure the industrial land into public ownership as soon as possible. Again preliminary steps were being taken by the Housing Division. (That the Housing Division had this broad role is relevant to the contemporary understanding of that word.) Of that land 200 acres, including the Hulls’ land, would be allocated

    for the development of general manufacturing and assembly plants, distribution warehouses and similar uses, as well as extensive yard-type industries. This area would be visually screened from adjoining residential areas by ridges, which should also give a fair degree of noise screening. Again the ridgelines should be heavily planted with trees.

  11. The area including the Hulls’ land was to be developed later and the type of industry was described as general. Two small areas of the Hulls’ land were intended for residential use and open space.

  12. Residential development was to be the largest single user of land in the Albany Basin, taking approximately 3200 of the 5500 acres available. The report envisaged a range of housing types, including both state and private housing. Randerson J summarised the steering committee’s recommendations in this way:

    In summary, the technical report recommended the comprehensive development of the Albany Basin and the establishment of a sub-regional centre at Albany. The land was to be used predominantly for housing purposes which would include a mix of state and private housing. Industrial uses were also proposed in order to support the development of the Basin and to provide employment opportunities. The subject land was included in the land proposed to be acquired under the 1928 Act for future industrial purposes. There is no evidence that it was contemplated even at this early stage that the subject land would be used for housing whether state or otherwise other than the two small areas earlier indicated. The acquisition of land by the Crown was seen as a means of ensuring the comprehensive development of the Albany Basin as a whole. That would be achieved by compulsory acquisition under the 1928 Act or on a voluntary basis.

    [emphasis added]

    THE TAKING OF THE HULLS' LAND FOR "STATE HOUSING PURPOSES"

  13. The Gazette notice of 12 February 1976, declaring the taking of the land, is at the base of the Hulls’ claims. While all the references through 1974 and 1975 were to "development", "urban development" or a "new town", or were to a wide range of uses for the land, the Gazette notice introduced an arguably more limited statement of purpose, the purpose which the Hulls say the Government abandoned some time before 1 February 1982. The notice read as follows:

    Declaring Land Taken for State Housing Purposes in the City of Takapuna

    Pursuant to section 32 of the Public Works Act 1928, the Minister of Works and Development hereby declares that, a sufficient agreement to that effect having been entered into, the land described in the Schedule hereto is hereby taken for State housing purposes from and after the 12th day of February 1976.

  14. The compensation certificates prepared for registration against the titles similarly referred to the agreements as ones under which "the Crown (Housing Corp)" acquired the land for "State Housing". The land was leased back to the Hulls who continued to use it for dairy farming.

  15. The change in purpose, claimed by the Hulls, appeared, they said, from changes in the zoning of the land and the Crown’s participation in the steps which led to those changes. For Randerson J too the change in the zoning of the land after it was acquired was of "critical importance". In late 1976 or early 1977, the Takapuna City Council publicly notified a proposed change to its district scheme called Scheme Change W99. As had been anticipated by the steering committee, the zoning of the subject land would be changed from "rural residential deferred" to "rural industrial deferred". The Planning Tribunal confirmed the substance of Change W99 on 20 June 1979.

    There is [said Randerson J] no evidence that the Housing Corp or the Ministry of Works had any difficulty with the proposed zoning for the subject land. Indeed, it is reasonable to infer that they supported the proposed new zoning. The Council’s Chief Planner at the time, Mr L A O’Donnell, has deposed that he was in frequent contact with representatives of the Housing Corp at the time Change W99 was developed and made operative, and he could not recall any suggestion that the subject land would be required for housing purposes. Attention had switched to the possibility of using the subject land and adjoining land for industrial development purposes with various proposals being canvassed from time to time. As his affidavit records, none of these ideas ever came to anything although the land has remained zoned for future industrial purposes.

    While the future use of the subject land for residential purposes was not precluded by Change W99, it was in my view a clear signal, with the express or implied assent of the Housing Corp and the Ministry of Works and Development, that the land was intended for future industrial purposes and not for housing. Plans for large scale State housing in the Albany Basin had been abandoned but plans nevertheless remained for the development of other parts of the Corp’s holdings for residential purposes in the future.

  16. At the end of his review of the facts, Randerson J stated his conclusions on factual matters. They include the following:

    1.

    From around 1963 the Crown began acquiring land in the Albany Basin on a large scale with the intention of establishing a major new town in an area then substantially rural in character. It was intended that land would be made available for State housing on a major scale, along with appropriate commercial and industrial development to serve the new town and to provide employment opportunities.

    2.

    The public acquisition of the land was seen as strategically important to control the land so that development could proceed on a planned and comprehensive basis in close consultation with the local and regional authorities of the day. To the extent that purchases could not be made voluntarily, compulsory acquisitions using the powers available under the 1928 Act were to be used.

    3.

    ....

    4.

    By the time the Takapuna City Council publicly notified Scheme Change W99 in late 1976 or early 1977, the Housing Corp had clearly signalled its intention that any future use of the land would be for industrial purposes. Those changes were confirmed by the decision of the Planning Tribunal on 20 June 1979 from which point the zoning of rural industrial deferred was confirmed.

    5.

    From that point onwards, there is no evidence that the Corp ever contemplated the use of the subject land for residential or housing purposes of any kind. Indeed, there is no specific evidence that the Corporation ever intended using any but a small portion of the subject land for housing other than the intention stated in the formal documents at the time of the acquisition which referred to "State housing purposes"

  17. The Hulls, on appeal, endorsed those conclusions.

  18. Once Randerson J had found that industrial purposes were not included within "State Housing purposes", as he interpreted the phrase, he reached this overall conclusion:

    I consider that by the time of the introduction of Scheme Change W99 in late 1976 or early 1977 or, at the latest, by the date of the confirmation of the proposed scheme change by the Planning Tribunal on 20 July 1979, a fact situation had clearly arisen which demonstrated that the subject land was no longer required for the public work for which it was then held, ie, for State housing purposes. By its close involvement in the statutory planning process (including its formal involvement through the Ministry of Works in the resulting appeals before the Planning Tribunal), the [Housing] Corporation was signalling that the land was no longer required for residential purposes and that it was comfortable with the rural industrial deferred zoning of the land. The approach by the Corporation in relation to zoning of the land and its future intentions must have been adopted by a conscious and considered decision. Thereafter, there is no evidence that the Corporation ever considered using the land for residential purposes.

  19. Before we consider the meaning of the phrase "State Housing purposes", we note a problem for the Hulls arising from the conclusions, especially conclusion 5, set out in para [16] above. In that conclusion the Judge found that the land (except for a small portion of it) was not taken originally for housing and that the purpose never changed. It follows that identifying the time at which the land was "no longer required" for housing is impossible. Section 40 appears to have no moment of change to which to attach. There arises the prospect — not pursued by either party at any stage — that on the Hulls’ view of the meaning of "State Housing purposes" the original taking was itself flawed.

    THE MEANING OF "STATE HOUSING PURPOSES"

  20. If the point just made about the Crown’s consistency of purpose is put to one side, the Hulls’ case appears to be straightforward and compelling : the land was obtained in 1976 for state housing purposes, by 1979 the Crown’s clear purpose had changed and it was "no longer" to use the land for that purpose but rather to use it for industrial development, and, accordingly, when s 40 came into force on 1 February 1982, the Crown was obliged to offer the land back. Essential to that argument is the proposition that the industrial purpose in question does not come within "State housing purposes" as that term appears in the Gazette notice. It is that proposition which we now examine.

  21. Randerson J began his discussion of that matter with the definition of "State housing purposes" to be found in the Housing Act 1955. The Crown, he said, submitted that the use of that expression in the Gazette notice did not necessarily correspond to that statutory definition:

    I do not accept that submission. In my view, it is highly improbable that the Crown did not intend the expression to conform with the definition in the Act which was undoubtedly one widely used by the relevant Government departments and agencies at the time.

  22. The definition is as follows:

    2.

    Interpretation—

    (1)

    In this Act, unless the context otherwise requires,—

    ....

    "State housing purposes" means the erection, acquisition, or holding of dwellings and ancillary commercial buildings by the Crown under this Act for disposal by way of sale, lease, or tenancy; and includes the acquisition of land by the Crown—

    (a)  

    As sites for dwellings and ancillary commercial buildings:

    (b)

    For schemes of development and subdivision into sites for dwellings:

    (c)

    For motorways, roads, streets, access ways, service lanes, reserves, pumping stations, drainage and water works, river and flood protection works, and other works upon or for the benefit of the land so acquired or the occupiers thereof.

  23. The Judge ruled that the large scale industrial activity contemplated by the Crown for the Albany Basin did not come within the terms of the definition. He reached that conclusion by reference not just to the definition but also to other provisions of the Act, the Housing Act 1919 which it replaced and, by way of contrast, to "the far broader functions and powers enacted by the Housing Corporation Act 1974". If "State housing purposes" under the Housing Act 1955 was intended to permit the development of entire towns, it would not have been necessary, he said, to expand the Corporation’s powers in the 1974 Act. Finally, he called attention to a power added to the 1928 Act by the Finance Act (No 2) 1945 enabling the taking of land among other things for its improvement and development for industrial, commercial, residential and recreational purposes. The provision differentiated between setting the land apart as State housing land under the Housing Act 1955 and other government works.

    Thus, the Crown had the power available to take the land for much wider purposes than State housing purposes had it chosen to do so. Instead, it adopted the narrow rubric of State housing purposes and did not change that purpose under the available procedures at any time before the land was formally declared to be surplus.

  24. Mr Carruthers QC, for the Crown, argued that whatever meaning the expression "State housing purposes" had in the Housing Act, the expression in the Gazette notice must be interpreted against the background of the notices and other communications to the Hulls identifying the general nature of the development proposed for the Albany Basin and the precise purpose for which the land was to be taken. He drew our attention to the particular features of the new town development. Nor was there any logical reason to limit the meaning of the expression to that in the Housing Act. By the time the land was taken the Housing Corporation Act 1974 was in force and that Act plainly contemplated that the Corporation would hold land for the development of urban communities, including related commercial, industrial, recreational and other facilities. He also argued that in any event the 1955 definition was wide enough to encompass the Crown’s purpose.

  25. Mr Williams QC, for the Hulls, contended that the Judge’s reasoning and statutory analysis were sound in all respects. Given the seriousness and invasiveness of compulsory land dispossession and the fact that a formal legal process is involved, which yet leaves a former owner with an "inviolate right" to repurchase, the former owner is entitled to rely on the formal instrument which effects the taking. A former owner would indeed be imprudent and remiss to rely on any mere informal indication of the Crown’s purpose. To adopt the Crown’s approach would introduce great uncertainty. Citizens should not have to rely upon general and somewhat vague language such as that in the Associate Minister’s letter of 31 July 1974 (para [5] above) to ascertain the purpose for which their land is taken. Lord Reid in Slough Estates Ltd v Slough Borough Council (No 2) [1971] AC 958, 962, was cited in support.

  26. We begin, as the Judge did, with his linking of the expression "State housing purposes" to the definition in the Housing Act 1955. The first point to be made about the linking is that the definition is of course a definition "for the purposes" of the 1955 Act. It does not purport to have any broader purpose. It may also be relevant that, although the 1955 Act conferred on the Governor-General a distinct power to take land under the 1928 Act for State housing purposes (s 5), that particular power had not been used in this case. Rather the land was taken under the general public works powers.

  27. A second difficulty with the Judge’s equation is more substantial. The linking to the 1955 definition appears to have been influenced by the Judge’s statement earlier in his judgment that "the Housing Corporation Act was not in force at the time the [Hulls’] land was acquired. The significance of the differences in the legislation is considered later." We have already recorded the contrast he drew in his judgment between the 1955 definition and "the far broader functions and powers" conferred by the 1974 Act (para [23] above). Contrary to what the Judge says, the 1974 Act was also in force when the land was taken in 1976; indeed, as appears from the formal documentation (para [14] above), it was the Housing Corp, established by the 1974 Act, which held the land from the outset — and throughout. If anything is to be borrowed from the statute book the new statement of the functions and powers of the body which holds the land and which indicates the contemporary Parliamentary understanding of the role of the State in respect of "housing" is much more appropriate, especially in the absence of any evidence supporting the link to the 1955 definition. We accordingly turn to the 1974 Act.

  28. The 1974 Act gives a clear sense of what is to be understood by State housing purposes. According to s 18(1), the Housing Corp has two "general functions":

    1. To undertake housing and other urban development and renewal, both on its own account and on behalf of Government departments, and other persons and bodies; and

    2. To give assistance to any persons in respect of any matters relating to housing and other urban development and renewal.

  29. That legislative statement of the functions of the Housing Corp extends across the whole range of urban development and renewal including housing. The word housing when used alone (as in the title of the new Corporation) is used as a shorthand, including the other aspects of urban development and renewal. That breadth of function and usage is confirmed in the statement of the other functions of the Corporation set out in s 18(2):

    (2)

    Without limiting the generality of subsection (1) of this section, the Corporation shall have the following functions:

    (a)

    To select and acquire land for the purposes of housing and other urban development and renewal:

    (b)

    To develop land for such purposes by providing housing, commercial, industrial, recreational, and related facilities, amenities, works, and services:

    (c)

    To sell, lease, and otherwise dispose of land in the course of housing and other urban development and renewal:

    (d)

    To make loans for any purposes that are for the time being approved in writing by the Minister:

    (e)

    To make loans for any other purposes that are authorised by this Act or by any other enactments.

  30. That broad parliamentary understanding, especially as seen in para (b), of the role of the State during that period in relation to "housing" is confirmed by the activity of the Housing Corp as recorded in its annual reports around the time of the taking of the Hulls’ property. In its annual reports at the relevant times the Corporation mentioned among its functions urban development generally, for residential, commercial and industrial purposes. In its first report (for 1974-75) it recorded that it had reviewed its land holdings and "will sell directly its residential, commercial, and industrial land". The third report (for 1976-77) recorded (significantly under the heading "Publicly Owned Housing") that:

    most corporation land disposals have been in the housing field, although substantial industrial land sales have been achieved in the Wellington district. Currently a major development is taking place in the Kenepuru (Porirua) area and will result in the establishment of the first comprehensive industrial development undertaken by the Corporation. Other similar developments are being planned.

  31. The broad comprehensive view of "housing" to be seen in the Act and in those reports helps explain the use in this particular case of the expression "State housing purposes" in the 1976 Gazette notice and the compensation certificates. The usage also strongly suggests that those involved would not have sensed any significant change, in the sense of a narrowing of purpose, when the expression "State housing purposes" was used in the Gazette notice. That expression was to be understood in the broad terms indicated in the new legislation and in its administration. The development of a "new town" in the way contemplated in the period in question potentially involved the full range of developmental activities as listed in s 18(2)(b) of the 1974 Act (para [29] above), in the absence at least of any Ministerial direction under s 20.

  32. That broad reading is also completely consistent with the course of events involving the Hulls as they evolved in the period preceding the taking. They could have been in no doubt about the broad purposes the Crown was pursuing.

  33. We conclude that in its context the expression "State housing purposes" as used in the Gazette notice embraced the various proposed activities involved in the development of the new urban community in the Albany Basin including its industrial and commercial components. The expression covered the proposed activities as contemplated in the new zoning which was effected by 1979. It follows that throughout the whole of the relevant period the land was being held for "State housing purposes".

  34. We should make it clear that we are not giving precedence over the formal Gazette notice to the earlier correspondence with the Hulls. We must give priority to, and find the meaning of, the formal declaration contained in the Gazette notice. But that declaration is to be read in the factual and legal context in which it was written. The facts about the wide ranging character of the proposed development of the Albany Basin were well known and the broad legislative statement of the functions of the Corporation — not merely a matter of the definition of words for the purpose of a particular Act — provide a strong context for the broader reading. To recall what Randerson J said (of course about the 1955 rather than the 1974 Act), it is probable that officials worked with that broad role and with that wide meaning of "housing" in mind (see para [23] above). He had indeed acknowledged on the previous page of his judgment that "it may be that the use of the expression ‘State housing purposes’ was regarded as embracing the wider type of urban development contemplated". We should perhaps add that in the circumstances of this case we do not see any risk to the public of the kind which concerned Lord Reid in the Slough Estates case (para [25] above). No indication was given of how that would occur : the land remained in the Crown’s hands, and in any event, as indicated, our immediate concern is the determination of meaning in context rather than the alteration of apparent meaning which was Lord Reid’s concern.

  35. It follows that we need not consider Mr Carruthers’ alternative argument under this head — that even if the meaning of "State housing purposes" in the Housing Act 1955 were to be applied the purposes contemplated by the Crown would have come within it. We do note however that the argument has considerable force. The definition (para [21] above) includes acquiring land for, and acquiring and holding for disposal, commercial buildings ancillary to dwellings. Each of the powers conferred by ss 3-6 extends to those "ancillary commercial buildings". It may well be that the expression is sufficiently broad to encompass the industrial developments contemplated in the Albany Basin. They might properly be considered to be "ancillary" to the dwellings in that they support those who live in them by providing for employment. Certainly the Minister of Housing, when moving the second reading of the Bill which became the 1955 Act, saw the role as not simply helping provide dwellings but promoting self sustaining communities—

    [The Bill] is a consolidation of the Housing Act of 1919 and is largely a redraft of that measure, with some important amendments. It sets out to establish a Ministry of Housing and provides for all the duties the Minister may perform in the way of purchasing land, and carrying out the building of houses thereon, also the setting aside of the necessary industrial areas, commercial areas, recreational areas, and sites for schools and other reserves. The actual development of the land will still remain with the Ministry of Works. It has the staff and organisation to do that, and it will carry on with the general development of land purchased for housing.

    (307 NZPD 2883, emphasis added)

  36. But, as we say, we need not take that matter further, given the conclusion we have reached about the meaning to be given to the 1976 Gazette notice when it is read in context.

    PROCESS UNDER S.40 OF THE PUBLIC WORKS ACT

  37. Section 40, as enacted, read as follows:

    (1)

    Where any land held under this or any other Act or in any other manner for any public work—

    (a)

    Is no longer required for that public work; and

    (b)

    Is not required for any essential work; and

    (c)

    Is not required for any exchange under section 105 of this Act—

    the Commissioner of Works or local authority, as the case may be, shall endeavour to sell the land in accordance with subsection (2) of this section, if that subsection is applicable to that land.

    (2)

    Except as provided in subsection (4) of this section, the Commissioner or local authority, shall, unless he or it considers that it would be impracticable, unreasonable, or unfair to do so; offer to sell the land by private contract to the person from whom the land was acquired or to the successor of that person, at a price to be fixed by a registered valuer, or, if the parties so agree, at a price to be determined by the Land Valuation Tribunal.

    (3)

    Subsection (2) of this section shall only apply in respect of land that was acquired or taken—

    (a)

    Before the commencement of this Part of this Act; or

    (b)

    For an essential work after the commencement of this Part of the Act.

    (4)

    Where the Commissioner or local authority believes on reasonable grounds that, because of the size, shape, or situation of the land he or it could not expect to sell the land to any person who did not own land adjacent to the land to be sold, the land may be sold to an owner of adjacent land at a price negotiated between the parties.

    (5)

    For the purposes of this section, the term "successor", in relation to any person, means the person who would have been entitled to the land under the will or intestacy of that person had he owned the land at the date of his death; and, in any case where part of a person's land was acquired or taken, includes the successor in title of that person.

  38. Changes have been made since 1981 consequential on the removal in 1987 of "essential works" from the Act and the widening of s 40(1)(b) to "any other public work", and on changes in government administration with the Commissioner of Works being replaced by the Chief Executive of the Department of Lands.

  39. Randerson J, it will be recalled, both decided that the Court could determine whether the conditions stated in s 40(1) were satisfied and ruled that in the circumstances of this case they had been satisfied by the time that provision came into force. It followed that the Crown was obliged to offer the land back at the 1983 valuation.

  40. His route to that conclusion began with these questions:

    Is the statutory officer entitled simply to await advice from the relevant land holding agency that the land is surplus to requirements or is there some obligation on the part of the statutory offer to make inquiries from time to time as to the status of lands of the Crown in terms of s 40? An associated question is whether a formal decision is required by the land holding agency that the land is no longer required for the public work or may that be established by other means?

  41. The Judge gave these answers to those questions:

    In my view, there is much to be said for the view that the land holding agency must generally have given proper consideration to the question at the appropriate level of authority and reached the conclusion that the land is no longer required for the public work for which it is held. On the other hand, injustice could arise to a dispossessed land owner if the land holding agency delayed making any formal decision for a lengthy period (whether deliberately or through inadvertence or lax procedures) after some circumstance or event which made it plain that the land was no longer required for the relevant public work. Where land prices were rising during the relevant period, the failure to make a formal decision could result in significant prejudice to the former owner in that, by the time a formal offer was made, the value of the land might be beyond the reach of the former owner or at a much higher price than would have applied if the offer had been made timeously.

    That situation would be met by Hammond J’s conclusion [in Deane v A-G [1997] 2 NZLR 180] that there is a duty upon the land holding agency to take a decision that the land is no longer required for a public work within a reasonable time after a fact situation arises as a result of which the relevant land is not thereafter required. I respectfully adopt that conclusion which, in my view, should be necessarily implied in order to provide an effective remedy to the former owners. Where a factual situation has clearly arisen which indicates that the land is not required, the Crown (through the relevant land holding agency) will be in breach of duty if it does not make a decision, within a reasonable time thereafter, that the land is no longer required.

    I do not consider it unreasonable to impose such a requirement given the evident statutory purpose of the section and the need to return land to the former owners as soon as it is no longer required.

  42. Those answers related to the land holding officer. The statutory officer, when notified that the land was no longer required, would then undertake the inquiry into the two circumstances in s 40(1)(b) and (c). It was not in dispute that the statutory officer was then obliged to follow the statutory procedure and to exercise due diligence in doing so.

  43. Randerson J then moved to his conclusion that, although there was no evidence of any formal decision being taken by the Corporation before 1 February 1989 (when it advised the Department of Lands that the land was surplus to requirements) by the time of the scheme change the fact was that the land was no longer required for the public work for which it was held. (para [15] above).

  44. Mr Carruthers contended that for four reasons the landholding agency cannot be under the obligation which Randerson J found:

    1. The Act does not explicitly impose that obligation and it is unlikely to have done so implicitly.

    2. Such a duty implies that the landholding agency was bound to have a clear plan for the use of particular land at all times. But nothing in the Act prevents the agency from holding land and not using it. Section 45 allows land to be leased for an unspecified period.

    3. The decision is not consistent with the reasoning of the Privy Council in A-G v Horton [1999] 2 NZLR 257 (decided after Randerson J gave judgment in this case).

    4. The prerequisites in s 40(1)(a)-(c) cannot be decided as a matter of objective fact and in the absence of any decisions by the landholding agency and chief executive.

  45. In response, Mr Williams emphasised the judicial statements that there is an absolute or mandatory duty on the Crown once the lands cease to be required for the public work; eg Rowan v A-G [1997] 2 NZLR 559, 571, and Horton v A-G CA43/97, 3 December 1997, p18. The contention that a formal decision is required was, he said, met by

    1. The lack of any such requirement in the three paragraphs of s 40(1); other provisions of the Act, such as ss 20 and 42(3) expressly require formality when it is called for.

    2. The concept of s 40 as an inchoate right which crystalises when the expropriated land is no longer required.

    3. Situations where land has become surplus without any actual decision being involved, as envisaged in Simpson Motor Sales (London) Ltd v Hendon Corp [1963] Ch 57, 82-83.

    4. This Court’s holding in Manukau City v A-G [1973] 1 NZLR 25 that whether or not land is required for a public work is a question of fact.

  46. Mr Williams also emphasised statements in a number of cases about the character of the right of the former owner under s 40 — a right of preemption, an option, an inchoate right, and a strong legislative policy to preserve the rights of an owner subject to the continuing needs of the state (statements conveniently collected in the Privy Council judgment in Horton at 261).

  47. Because of our earlier conclusion it is not necessary to express a final view on this difference. But in view of their practical importance to those concerned with this branch of the law, we comment briefly on interrelated matters: the significance of different factual circumstances, the wording of the different elements of s 40(1), (2) and (4), and the differing character of the assessments to be made under them by the relevant officials and by any Court on review. We also comment very briefly on the character of the entitlement of the former landowner under s 40.

  48. The first, and usually determinative criterion in s 40 is satisfied when in terms of subs(1)(a) the land is no longer required for the purpose for which it was taken. Whether that is so is a question of fact involving an assessment of intention in the light of objective circumstances. Proof that the land is no longer required for the relevant public work may be achieved by demonstrating an affirmative decision to that effect. The point can also be established by examining the conduct of the body holding the land and, if appropriate, drawing an inference that the body has concluded that it no longer requires the land for that work. Alternatively, the evidence may establish that that was not the case and, for instance, that the land holding agency remained in a state of genuine indecision. But if any reasonable person would undoubtedly have concluded that in all the circumstances the land was no longer required for the relevant public work, the agency may well have difficulty asserting that it had not so concluded, and therefore had not come under any obligation to proceed in terms of the section.

  49. The circumstances of this case emphasise the critical role of the facts. For instance, had we accepted the interpretation of "State housing purposes" proposed by Mr Williams, the facts satisfying para (a) of s 40(1) would have been established, but they would have been established in essence by reference to an unequivocal public act by the Crown — its support for the zone change. The situation would then have been that identified by the Privy Council at the end of its judgment in Horton: "there was on the facts of this case no distinction between Coal Corp not requiring the land and it deciding that it did not require the land" ([1999] 2 NZLR at 262).

  50. Once para (a) of s 40(1) is satisfied, we consider that the landholding agency, the Chief Executive of the Department of Lands or both are obliged to take reasonable steps to ascertain whether the land is or is not required in terms of paras (b) and (c). If, after reasonable inquiry, no such requirement emerges, the Chief Executive must act in respect of the land in accordance with s 40(2).

  51. The Chief Executive must give bona fide and fair consideration to whether the statutory course of offer back would be impracticable, unreasonable, or unfair under subs (2) or whether in terms of subs (4) the land is instead to be sold to an adjacent owner. Unless one of those exceptions applies, the Chief Executive must offer the land back to the original owner.

  52. Individual cases may present particular difficulties but the foregoing approach should be of assistance in resolving the usual issues which arise under s 40. Our comment is of course limited to land held by central government or its agencies. The process relating to land held by local authorities would differ in detail.

  53. Again, the circumstances of this case are illustrative. Even were para (a) satisfied in 1982 or 1983, the fact that the conditions of paras (b) and (c) of s 40(1) were satisfied in 1989 in the mind of the relevant officials (including the second official involved in s 40(1) : the Chief Executive of the Department of Lands) does not mean that they would have been similarly satisfied were the critical date to have been in 1983 or 1982. By contrast, in Horton, on the trial Judge’s findings, Coal Corp had acted for a time as if the land were for sale ([1999] 2 NZLR at 261). It could therefore not deny that s 40 was satisfied.

  54. One difficulty for the Hulls’ argument in this case is indicated by the contrast between determinations under s 40 and statutes which provide a more specifically defined condition the satisfaction of which requires an offer to the previous owner. An instance of such a condition is provided by the statute discussed in the case which was distinguished in Horton: Macfie v Callander & Oban Railway Co [1898] AC 270. The question raised by that statute was whether the land was superfluous on a particular date, the tenth anniversary of the date fixed by the special Act for completing the railway. A railway company had taken the land for the building of a railway. The issues presented by that statute were much more confined than those arising under subs (1) and (2) of s 40. A related significant difference is that when s 40 is being applied to land by agencies of central government it involves at least two different agencies or officials : first, the land holding agency, second, the Chief Executive of the Department of Lands and possibly, as well, other agencies which may require the land for another public work.

  55. We are not of course saying that the relative width and complexity of the assessments that s 40 calls for means that Court review is excluded. For instance, were the facts to establish that the original purposes had clearly been abandoned (as perhaps envisaged in the Hendon case, para [45] above), the Chief Executive of the Department of Lands might well come under an enforceable duty to consider whether paras (b) and (c) of subs (1) and subs (2) are satisfied and whether subs (4) does not apply to prevent the offer, with the consequence that an offer back to the original owner should be made. As we have already indicated, a formal recorded decision by the land holding agency in terms of s 40(1)(a) may not be required in such circumstances.

  56. Our final comment relating to s 40 concerns the various descriptions or characterisations given by Courts of the former owner’s right under that provision. We do not consider that it is useful to try to compare the position under s 40 with conventional property law concepts. It might be better simply to allow the provisions of s 40 to speak for themselves in their historical and legislative context.

    RELIEF

  57. In his first judgment, Randerson J indicated his preliminary view that the Hulls were entitled to declaratory relief to the effect that the land ought to have been offered back to them no later than 1 February 1983 subject to the exercise of the statutory officer’s discretion under s 40(2) and (4). He was not aware of any circumstances that would entitle the statutory officer to rely upon any of the exceptions in those provisions. Subject to those matters the offer back would be the current market value as at 1 February 1983. He reserved the issue of relief for further submissions. Following the receipt of those submissions he made a declaration that the defendant promptly offer the land back to the Hulls at a price to be fixed as at 1 February 1983.

  58. The Crown’s argument under this head related in part to the issues touched on in the previous part of this judgment about the various assessments and decisions to be made under s 40(1)(a), (b) and (c), (2) and (4). Those matters are better seen as distinct from the technical issues about the availability of relief. They go to the substantive grounds for review. To the extent that the Crown argument is limited to the technical issues we would not have considered that it should prevail.

  59. Were that argument to succeed, assuming of course that the grounds for relief were made out, there would be, as Randerson J said, a triumph of form over substance. Overall, in our view the Crown plainly had powers of decision under s 40 within the meaning of the Judicature Amendment Act 1972 and, again if the grounds were established, the Hulls had rights which could be declared. As this Court said in Royal Australasian College of Surgeons v Phipps [1999] 3 NZLR 1, 11:

    One broad purpose of the 1972 Act, especially when taken with the 1977 Amendments, was to remove technical problems which had until that time bedevilled applications for judicial review by way of the prerogative writs and declarations. Rather, the attention of the parties and of the Court should be focused on the issues of substance, especially the issues of what actual exercises of power are reviewable and on what grounds.

    RESULT

  60. The appeal is allowed and the declaration made is set aside. The appellant is entitled to costs of $5,000 and reasonable disbursements including the travel and accommodation costs of counsel to be fixed by the Registrar if the parties cannot agree. Costs in the High Court are to be fixed by that Court in the light of the result of the appeal.


Cases

Slough Estates Ltd v Slough Borough Council (No 2) [1971] AC 958; Rowan v A-G [1997] 2 NZLR 559; Horton v A-G CA43/97; Simpson Motor Sales (London) Ltd v Hendon Corp [1963] Ch 57; Manukau City v A-G [1973] 1 NZLR 25; Macfie v Callander & Oban Railway Co [1898] AC 270; Royal Australasian College of Surgeons v Phipps [1999] 3 NZLR 1

Legislations

Public Works Act 1928: s.40

Housing Act 1955: s.2, s.5

Housing Corporation Act 1974

Finance Act (No.2) 1945

Representations

C R Carruthers QC and L M Hansen for the Appellant (instructed by Crown Law Office, Wellington)
D A R Williams QC and C J Allan for the Respondents (instructed by Rudd Watts, Auckland)


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