IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV [2016] NZHC Plaintiff. AUCKLAND COUNCIL Defendant

Transcription

1 IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV [2016] NZHC 1199 BETWEEN AND ALWYNE JONES Plaintiff AUCKLAND COUNCIL Defendant Hearing: 29 February 2016 Appearances: R Pidgeon for the Applicant D Broadmore for the Respondent Judgment: 7 June 2016 JUDGMENT OF ASSOCIATE JUDGE SARGISSON This judgment was delivered by me on 7 June 2016 at p.m. pursuant to Rule 11.5 of the High Court Rules. Registrar/Deputy Registrar Date... Solicitors: Thomas & Co, Auckland Buddle Findlay, Auckland R Pidgeon, Auckland JONES v AUCKLAND COUNCIL [2016] NZHC 1199 [7 June 2016]

2 Introduction [1] Ms Jones applies to the Court for an order under s 145A Land Transfer Act 1952 that her caveat, lodged against the title to a residential property in Avondale, not lapse. The current owner of the property is Auckland Council. The Council opposes the application, which has been triggered by its own application to the Registrar-General of Land for the caveat to lapse. [2] The property was formerly owned by Ms Jones mother. It was purchased in 1974 by the Auckland Regional Authority under the Public Works Act It was acquired for the public work of roading, which the authority planned to undertake in Avondale as part of extensive new regional roading infrastructure. Auckland Council ultimately acquired the property in 2010 as a result of the numerous steps taken over the last decade or more for the reorganisation of local government in the Auckland Region. 1 It is common ground that throughout this process, the statutory bodies in which the property has been vested were empowered to undertake roading as a valid public work. 2 It was not suggested that the change in actual ownership affect the issues to be determined in this case. [3] It is also not in dispute that Ms Jones acquired a caveatable right in relation to the property as the successor to her late mother under s 40(5) Public Works Act The right was to receive an offer from Auckland Council, or its predecessor the Auckland City Council, (also under s 40), to sell her the property in the event of the property s ceasing to be required for roading purposes or for any other public work. 3 [4] The dispute is whether Ms Jones arguably retains that right. The Council says the right has been extinguished. Ms Jones says the right is ongoing, and that the The Auckland Regional Council (ARC) was formed in 1989 taking over the functions and responsibilities of the Auckland Regional Authority (ARA) which was established in The ARC was later subsumed into the Auckland City Council which became the current Auckland Council in The Local Government Acts 1974 was operative when the Authority acquired the property empowering the Authority to undertake local work and public works as defined in the Public Works Act The term Council will be used to cover the Auckland City Council and the Auckland Council henceforth.

3 corresponding obligation to make her a valid offer to sell the property has not been fulfilled. [5] The Council argues, from its standpoint, that: (a) The property ceased to be required for roading purposes in 2008 or 2009; but that 2014 was the point in time when the property became not required for any other public work in terms of s 40(1)(b); (b) It fulfilled its obligation under s 40(2) by making an offer in 2015 to sell the property by private contract at the then current market value (being the value current in 2014), which Ms Jones declined. (c) This came about as the property was earmarked for urban renewal purposes in 2009, and it retained that status until declared surplus and not required for any other public work in [6] Ms Jones position is that she has yet to receive a valid offer from the Council to sell. She says the offer should have been made in 2008 or (if made later) at the value that was current in 2008, when the Council first advised that the property was no longer needed for roading purposes and raised the subject of sale. [7] Ms Jones does not disagree that the Council s decision to require the property for urban renewal was made within a reasonable time of its ceasing to be required for roading. She contends however that: (a) The Council lost its authority to acquire land for urban renewal purposes in 2002 and therefore once the property was no longer required for roading, it could not therefore be required for urban renewal. She argues that urban renewal ceased to be an authorised public work for the purposes of the Public Works Act 1981 in 2002, as a result of legislative changes brought about by the Local Government Act 2002.

4 (b) Even if she is wrong about that, the Council s advice to her in 2008 was in such definitive terms as to indicate plainly that the Council did not require the property for public work, and it was thereafter estopped from requiring it for another public work. (c) Alternatively, she made very clear in 2015 that she intended to buy the property, and that it cannot be the case that she has lost her right to do so simply because of her contention that the price should be fixed at the 2008 value. Issues for Determination [8] The broad issue for determination is whether Ms Jones retains the right to have the Council offer to sell the property back to her under s 40 of the Public Works Act If arguable, then there is no dispute that she is entitled to maintain her caveat and to have her case determined at trial. [9] Ms Jones has the onus. Whether or not she retains the right to be offered the property back depends essentially on: (a) Whether it is arguable that an offer to sell the property should have been made in 2008 or That issue turns on the following questions: (i) Did urban renewal cease to be a work which the Council could undertake as a public work for the purposes of the Public Works Act 1981? (ii) Does the Council s advice of 2008 give rise to an estoppel that prevents it from claiming the property was required for the purpose of urban renewal? (b) If plainly no offer was required in 2008, did Ms Jones accept the 2015 offer in a manner which fulfils the requirements of s 40 of the Public Works Act 1981?

5 Factual Background [10] Ms Jones mother died in On 4 December 2008, the Council wrote to Ms Jones raising the possibility of a sale of the property. The letter stated: 4 The property is no longer required for roading purposes and the council wishes to sell it or use it for other purposes I am contacting you in the first instance and hope that you will be able to assist me with contact details for your brother and sister. I wish to ascertain whether any of you have any interest in purchasing the property. The property has a valuation of $395,000. This letter does not constitute an offer to you but I would like to know if you are interested at all in purchasing it. [11] Ms Jones responded and provided her siblings contact addresses. Neither they nor Ms Jones expressed a desire to buy the property at that time. She stated that I have no interest in purchasing the property at this stage. The parties communication rested there until [12] The Council deposes that after this correspondence with Ms Jones, it subsequently determined that the property was required for another purpose; an urban renewal project it was advancing in Avondale. It provides evidence that the Property Enterprise Board, a body of the Council, retained the land for possible future redevelopment as part of the Avondale Highbury Triangle Project. [13] In April 2014 however, the Council abandoned its plan to use the property for urban renewal purposes. It declared the property surplus and approved it for sale. In accordance with its obligations under s 40 of the Act, it offered to sell the property to Ms Jones at the then current value of $900,000. By letter dated 20 April 2015 it sent her a sale and purchase agreement, naming that price, for acceptance within 40 working days. The letter states: Letter from Auckland Council to Alwyne Jones regarding sale of her late mother s property (4 December 2008). Letter from Auckland Council to Alwyne Jones regarding sale of her late mother s property (20 April 2015).

6 In 2008 it was confirmed that the property was not required for any roading projects. The land was then retained for Urban Renewal purposes and was transferred to Auckland City s Development with Vision budget. Your mother s former property has now been approved for sale by Auckland Council. Under section 40(2) of the Public Works Act 1981, council is now offering the land to you (Alwyne Jones) and your siblings (Sandra Heng and Michael Lowe) as successors to the former owner. Enclosed are two copies of an Agreement for Sale and Purchase. If you wish to purchase, please note the following: (i) The offer remains open for 40 working days as specified in clause 14 of the agreement. (ii) If you wish to accept the offer, please sign both copies of the agreement where indicated and return one signed copy by post/courier. We recommend you engage independent legal advice on this matter before signing. (iii) If you wish to assign an accepted offer or you wish to transfer such to a third party, you must provide a deed of assignment or nomination signed by yourself. (iv) The purchase price has been assessed by a registered valuer and reflects the current market value of the property as at the date the property was approved for sale (16 April 2014). (v) Auckland Council has no obligation to negotiate on the price or terms and conditions. However, you have the right to sign the contract during the 40 working days but make the agreement subject to the price being determined by the Land Valuation Tribunal. (vi) Unlike the purchase of the property by Council any costs incurred by you to purchase the property are born by you and cannot be claimed from council in reimbursement. Please note that your signature on the enclosed agreements will constitute a binding agreement to purchase the property. [14] On 20 May 2015, Ms Jones solicitor replied and noted her interest in purchasing the property, but made plain that she did not accept the price. The solicitor stated that the 2008 valuation was the appropriate one to use for the offer. He pointed out that it was in 2008 that the property became no longer required for roading purposes, and argued that the subsequent purpose of urban renewal that the Council decided to hold if for, was not a valid purpose under statute: 6 6 Letter from Alwyne Jones Solicitor to Auckland Council regarding the offer on her late mother s property (20 May 2015)

7 We confirm our client s interest in the purchase of the property However, our client has some doubt regarding whether the purchase price set out in the proposed agreement is the appropriate price in the circumstances. The Council decided in 2008 that the property was no longer required for the purposes for which it was obtained. Whilst s 40 of the Act provides that it may be retained if the land is to be used for other Public Works projects, it does not appear that this was the case. Urban renewal would not fit into the category of Public Works under the Act. If the property was no longer required for Public Works in 2008 then the purchase price for the property should be the valuation of the property at the time the 2008 decision was made. The agreement should therefore be amended to reflect that position. Otherwise the proposed agreement is in order. We look forward to your response on this matter. 7 [15] The Council disagreed with this argument. It replied on 2 June 2015: 8 Councils were conferred the power to carry out urban renewal under section 644B(2) of the Local Government Act ( LGA ) 1974 which states that Urban renewal is hereby declared to be a public work for the purposes of the Public Works Act 1981 and this power was preserved in councils by s 189(1) during the partial repeal of the LGA. Hence Auckland Council is entitled to hold the property for urban renewal purposes pending the determination of whether the property was surplus to Auckland Council s requirements pursuant to the PWA. We advise that Auckland Council had resolved that the above property was surplus property only in Therefore the property only became available pursuant to the provisions of the PWA in 2014 and any valuation of the property for disposal purposes are only to be calculated as at [16] Ms Jones and the Council engaged in further discussions over whether changes to the Local Government Act 1974 (enacted by the Local Government Act 2002) had deprived local authorities of their power to undertake urban renewal as as a public work. 9 On 23 June 2015 her solicitor wrote: Letter from Auckland Council to Alwyne Jones regarding sale of her late mother s property (2 June 2015). Section 266 of the Local Government Act 2002 repealed part 38 of the 1974 Act, which authorised councils to undertake and carry out urban renewal in their districts, and declared urban renewal to be a public work for the purposes of the Public Works Act However, the Local Government Act 1981 significantly enlarged the powers of local authorities to undertake public works for the benefit of their districts. Letter from Alwyne Jones solicitor to Auckland Council regarding the offer on her late mother s property (23 June 2015).

8 Section 189 of the 2002 Act must be read narrowly Section 189 must therefore be seen as a transitional provision allowing the Council to complete works already undertaken The decision to retain the land for urban renewal was made in In 2008, urban renewal was not a public work The property should be offered back to our client at the 2008 price. As previously advised, we approve the draft agreement provided to our client with the exception of the price. Our client and her siblings do wish to acquire the property but will not sign the current agreement until the correct price is included. [17] Discussion continued over the relevant statutory provisions and the issue of whether the 2008 valuation or the 2014 valuation was the appropriate one to use. Council in a letter dated 16 July 2015 advised: 11 We do not agree that section 189 is a transitional provision. Such an interpretation is inconsistent with the ordinary meaning of the words, the statutory purpose of that section and a relevant decision of the High Court. Section 189 authorises Auckland Council to take land for any public work As outlined urban renewal is a public work that a local authority was empowered to undertake before 1 July Therefore Auckland Council is empowered by section 189 to take land for urban renewal. Further, in 2008 urban renewal was a public work for the purposes of the Public Works Act 1981 In 2008, Auckland Council was entitled to hold the property for urban renewal purposes pending the determination of whether the property was surplus to Auckland Council s requirements pursuant to the PWA. We advise again that Auckland Council had resolved that the above property was surplus property only in Therefore the property only became available for disposal pursuant to the provisions of the PWA in 2014 and any valuation of the property for disposal purposes are only to be calculated as at However, our client will extend the statutory time frame for the offer to 31 July 2015 [18] On 31 July Ms Jones solicitor wrote to the Council confirming the intention to purchase the property but reiterated the view that the 2008 valuation was the appropriate one to use: Letter from Auckland Council to Alwyne Jones regarding sale of her late mother s property (16 July 2015). Letter from Alwyne Jones Solicitor to Auckland Council regarding the offer on her late

9 We again confirm our client s intention to purchase the property. However, this purchase should take place at the 2008 valuation. We have previously confirmed the terms of the contract with the exception of the purchase price. The property was surplus to requirements in As it was determined in 2008 that the property was no longer required then section 40 of the Act is clear that the property should have been offered back to our client at that time. In the letter, the Council states that the letter does not constitute an offer. However, once the determination had already been made that the property was surplus then by virtue of s 40 of the Act the Council was already under a statutory obligation to offer the property to our client. [19] The Council disagreed with the solicitor s opinion. On 20 August 2015 it replied, and reiterated its position that the property only became not required for a public work in It stated that if Ms Jones did not accept the offer by 29 August, the caveat would need to be removed: 13 The letter ACC sent Alwyne Jones on 4 December 2008 clearly stated that ACC was considering the use of the property for other purposes and did not indicate that the property was no longer required for a public work. The letter also stated that it did not constitute an offer under s 40 and was merely a means of making enquiry as to whether there may be any interest in a purchase if the property was to be sold and not used by ACC for other purposes. Our client has agreed to extend the statutory time frame for the offer as contained in our original letter of 20 April 2015 to August 2015 to allow your client to make a decision on the matter. Again we reiterate the property only became available for disposal pursuant to the provisions in the PWA in 2014 and the offer price reflects the valuation date of If your client elects not to accept the offer by 29 August 2015 we will require the caveat on the property title to be withdrawn. If not, our client will file proceedings to have the caveat removed and pursue your client for costs. [20] The argument continued without resolution. The ongoing discussions culminated in firm advice from the Council on 12 November effectively terminating discussions about sale on the basis that Ms Jones had not accepted the Council s offer by the last extended date for acceptance of 29 August The Council made plain it would not grant a further extension: mother s property (31 July 2015). Letter from Auckland Council to Alwyne Jones regarding sale of her late mother s property (20 August 2015). Letter from Auckland Council to Alwyne Jones regarding sale of her late mother s property (12 November 2015).

10 Your client having not accepted the offer by the last extended date for doing so, the Council is no longer required to attempt to sell the property to your client and your client s rights under s 40 of the PWA have expired. With that expiry your client s caveatable interests in the property also ended. [21] The Council s position was that Ms Jones had been entitled to accept the offer on or before 29 August and to make her acceptance subject to the price being determined by the Land Valuation Tribunal if she was not willing to accept the Council s assessment of the current market value. As Ms Jones had not accepted the offer within the extended time allowed, the Council ceased to have any obligation to attempt to sell the property back to her. [22] Consequently, the Council applied on 12 November 2015 to have the caveat lapse. In response, Ms Jones has made this application for the caveat not to lapse. [23] The Court made an interim order that the caveat not lapse pending further order. That order presently stands pending the outcome of Ms Jones application. [24] I turn then to the issues that I am required to determine. I begin by referring to the principles applicable to caveat applications of the present kind and to the relevant provisions of s 40 of the Public Works Act Relevant principles [25] The onus is on the caveator to show it has an arguable case in claiming an interest in land. Once the onus is satisfied, the balance of convenience will, in the normal course and in the absence of any special consideration, lie in favour of leaving the caveat in existence until the proceedings to enforce the interest claimed are tried. 15 [26] The right pursuant to s 40 of the Public Works Act 1981 to be offered back land which is no longer required for a public work is an interest in land and it will support a right to lodge a caveat against the title to the land Castle Hill Run Ltd v NZI Finance Ltd [1985] 2 NZLR 104. Hall v Attorney-General [2009] NZRMA 329, (2009) 10 NZCPR 164.

11 [27] The Court of Appeal noted in Williams v Auckland Council, that s 40 can be considered remedial. Its purpose is to address the consequences of a decision by a government or local authority to take land for a proposed public work which will not proceed. Fairness requires that the owners or their immediate successors should be given the opportunity to buy back. By this means also the legislature effected its intention to provide greater protection to the rights of private landowners. 17 [28] This right to an offer however, does not arise until all of the requirements of s 40(1) have been met. That is, land held for a public work must no longer be required for the public work for which it was acquired, or for any other public work. 18 [29] Section 40 Public Works Act 1981 relevantly states: 40 Disposal to former owner of land not required for public work (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 other public work; and (c) is not required for any exchange under section 105 the chief executive of the department within the meaning of section 2 of the Survey Act 1986 or local authority, as the case may be, shall endeavour to sell the land in accordance with subsection (2), if that subsection is applicable to that land. (2) Except as provided in subsection (4), the chief executive of the department within the meaning of section 2 of the Survey Act 1986 or local authority, unless (a) he or it considers that it would be impracticable, unreasonable, or unfair to do so; or (b) there has been a significant change in the character of the land for the purposes of, or in connection with, the public work for which it was acquired or is held shall offer to sell the land by private contract to the person from whom it was acquired or to the successor of that person Williams v Auckland Council [2015] NZCA 479 at [100]. Te Runanga O Ngati Awa v Attorney-General [2004] 2 NZLR 252 at [85].

12 (c) at the current market value of the land as determined by a valuation carried out by a registered valuer; or (d) if the chief executive of the department within the meaning of section 2 of the Survey Act 1986 or local authority considers it reasonable to do so, at any lesser price. (2A) If the chief executive of the department within the meaning of section 2 of the Survey Act 1986 or local authority and the offeree are unable to agree on a price following an offer made under subsection (2), the parties may agree that the price be determined by the Land Valuation Tribunal. [30] The question whether land acquired and held for a public work is no longer required for that work or is not required for another public work under s 40(1), is one of fact which involves an assessment of intention in the light of objective circumstances. 19 [31] When land is no longer required for the public work for which it was originally held, there is a duty to take reasonable and expeditious steps to ascertain whether the land is required for any other public work under s 40(1)(b). 20 It is notable that the local authority does not need to point to a specific project or use for the land at any given time. 21 The duty is to determine whether land is required for any other public work within a reasonable time frame. 22 In Attorney-General v Hull it was said: 23 Where a factual situation has clearly arisen which indicates that the land is not required, the Crown (through its relevant landholding 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. [32] Furthermore, the time taken to prepare the land for sale and make an offer must also be reasonable. 24 [33] As to the selling price, the duty is to offer to sell at the current market value or if the local authority considers it reasonable to do so, at a lesser price. 25 The Te Runanga O Ngati Awa v Attorney-General, above n 18; Attorney-General v Hull [2003] 3 NZLR 63 (CA) at [41]. Attorney-General v Morrison [2002] 3 NZLR 373 (CA) at [19]. Edmonds v Attorney-General HC Wellington CIV , 3 May 2005 at [64] and [65]. Attorney-General v Morrison, above n 20, at [22]. Attorney-General v Hull, above n 19, at [36]. McLennan v Attorney-General [1998] 2 NZLR 469.

13 correct value of a property is the current market value which is determined at the date the offer-back right crystallises. 26 Discussion [34] I am satisfied, on the evidence before me, that Ms Jones has not discharged the onus of demonstrating that she retains the right to have the property offered to her. It is not arguable that an offer to sell the property should have been made in 2008 (or if made later) at the value current in The 2015 offer was, in my assessment, a valid offer. My reasons follow. Is the property held for a public work? [35] Section 40 of the Public Works Act 1981 came into force on 1 February 1982 and imposed the obligation to offer back land that had been acquired for a public work, but subsequently has become no longer required for a public work. The obligation arises if the local authority held land for any public work but no longer requires it for that public work, or for any other public work. [36] The observations of the Court of Appeal in Williams on s 40 are apposite: 27 Section 40 recognises a local authority s continual right to retain land held for a public work only for that or another public work: it does not empower a local authority to avoid its statutory duty by asserting a right to continue to hold and use that land instead for a non-public work. [37] It seems clear that by virtue of s 40, land that is acquired for a public work cannot lose the status of land held for a public work for the purpose of s 40 except pursuant to some relevant statutory authority. A local authority cannot assert a right to use such land for another non-public work; if it does not require it for the original public work or another public work, it must comply with its statutory duty to offer back the land. In the present case therefore, the property remained held for a public work as at 1 February 1982 and it retained that status as at the date of the offer-back in Public Works Act 1981, s 40(2)(c) and (d). McLennan v Attorney-General, above n 24, at 469. Williams v Auckland Council above n 17, at [35].

14 Is the land no longer required for that public work (i.e. roading) under s 40(1)(a)? [38] Whether or not the property is no longer required for roading is a question of objective fact. 28 On the evidence submitted by Council, I am satisfied that the property was no longer required for the public work of roading in 2008, (or 2009 at the latest), principally because the Auckland Regional Roading Designation Fund was to be wound up in Is the land no longer required for any other public work (i.e. roading) under s 40(1)(b)? [39] The significance of when the property was no longer required for any other public work is the impact of timing on the duty to offer back and sell at the current market value. If both limbs of s 40(1) have been met, that is, the property is no longer required for that public work (roading) and is not required for any other public work, then the duty to offer back the property at the current market values arises at that point in time. [40] Williams citing Edmonds v The Attorney-General is on point and makes clear the importance of considering the second limb, s 40(1)(b) and then s 40(2) if appropriate: 29 [59] In Edmonds Miller J was of the view that: [148] It would seem to follow from Hull and Morrison that when the landholding agency invokes s40(1)(b) or s40(2)(a) in litigation, the first question for the Court is whether it considered the relevant subsection at the time it decided the land was no longer required for the designated work, and reached a decision within a reasonable time. If the agency did not invoke the relevant subsection to justify a decision to retain the land at the time, it is difficult to see why the Court ought to reach a decision on its behalf, in litigation brought after any reasonable time needed to reach a decision has long passed. [60] We agree with Miller J s view which was, as he noted, supported by this Court s decision in Hull. His construction not only conforms to the plain Mark v Attorney-General [2011] NZCA 176, [2011] NZLR 538 at [67]. Edmonds v Attorney-General HC Wellington CIV , 3 May 2005 at [148] cited in Williams v Auckland Council above n 17, at [59].

15 wording of s 40 but it is, consistent with the policy underlying that provision. [41] The Council therefore needs to show that it considered whether the property was required for another public work under s40(1)(b) and if not, then apply s 40(2). Under 40(2) there is a duty to offer to sell the property by private contract to the person it was acquired from, or that person s successor, unless it is unreasonable to do so, that is, unless the circumstances in s 40(2)(a)(b) are applicable. It is not in dispute that they are not applicable in this case [42] As to the consideration of subsection 40(1)(b), the Council submits that while it was deciding that the property was no longer required for roading in 2008 and 2009, determinations were ongoing as to whether the property was required for another purpose. It provides as evidence, records of the Property Enterprise Board which subsequently determined that the property was required for an urban renewal project it was advancing in Avondale. [43] The Property Enterprise Board was a body of the Council whose role was to promote high quality sustainable urban development. It was tasked with a review of the development opportunities for the Council in Avondale. It proposed that the property in question be retained for the Council for possible future urban renewal that was being investigated for the Avondale Highbury Triangle Redevelopment Project. [44] I am satisfied on the evidence that the Council was, in 2008 and 2009, engaged in the process of determining whether the property was required for another public work other than roading, and that as a result of those determinations, the Council determined that the property was required for the Avondale Project. I turn then to the issue of whether urban renewal for the Avondale Project qualifies as a public work within the meaning of the Act. Did urban renewal cease to be a public work for the purposes of the Public Works Act in 2002?

16 [45] At issue are the provisions of the Local Government Act 2002 which partially repealed the Local Government Act 1974, and specifically whether the 2002 Act removed the status of urban renewal as a legitimate purpose for a public work or preserved that status. [46] Counsel for Ms Jones submits that the legislative change not only removed the express reference to urban renewal in the 1974 Act, but that it repealed it. He contends that: (a) Section 644B of the 1974 Act stated expressly that urban renewal was a public work but the Act was repealed in (b) The relevant definitions of public work and local work in the 2002 Act did not specifically mention urban renewal and therefore it must be assumed that urban renewal ceased to qualify as a public work. [47] Counsel for the Council acknowledges that s 644B was repealed, but submits that the 2002 Act did not have the effect of disqualifying urban renewal as a permissible purpose for a public work for reasons that are threefold: (a) Section 189(1) of the 2002 Act confers general powers on a local authority to acquire land in a manner consistent with the Public Works Act (b) The empowering provisions of the 2002 Act are designed to be less prescriptive in respect of Council s powers and functions and instead gives broader and more generic powers (pursuant to a power of general competence) which are inclusive of those specifically identified in the Local Government Act before (c) Urban renewal is therefore properly considered a public work for the purposes of both the Local Government Act 2002 and the Public Works Act 1981.

17 [48] I agree with the Council s contention that the 2002 Act did not have the effect of disqualifying urban renewal as a permissible purpose for an authorised public work, though not for the exact reasons that counsel for the Council relies upon. [49] Council places considerable weight on the power of general competence and s 189 enacted by the Local Government Amendment The power of general competence is relevant but not because of s 189. Section 189 states: 189 Power to acquire land (1) A local authority may purchase, or take in the manner provided in the Public Works Act 1981, any land or interest in land, whether within or outside its district, that may be necessary or convenient for the purposes of, or in connection with, any public work that the local authority was empowered to undertake, construct, or provide immediately before 1 July (2) All land taken, purchased, or acquired under the Public Works Act 1981 is vested in the local authority for the purpose for which it was acquired and is subject to the provisions of that Act as to a change of the purpose or its disposal. [Emphasis added] [50] Section 189 is concerned with land acquired under the Public Works Act The Act empowers a local authority to acquire land for a public work following its enactment and coming into force on 1 July It is, in other words, concerned with future acquisition under that Act, and not with land already acquired under the Public Works Act [51] Had the former Jones property been acquired in, say, 2004, there could be no possible case for saying that acquisition for urban renewal purposes was not within the Council s authority pursuant to s 189; or if acquired for some other public work purpose, that it was not within the Council s authority to change that purpose to urban renewal. As to any such change, s 40 Public Works Act 1981 is directly invoked. [52] In the present case however, the property was acquired well before the enactment of the Public Works Act 1981, under the Public Works Act That timing does not negate the application of s 40 of the Public Works Act 1981, the provisions of which expressly apply where any land held by a local authority under that Act or any other Act for any public work is no longer required for that work

18 and is not required for any other public work. The question then is what is meant by public work. In the context of a change of purpose (as opposed to a take ), the Council is empowered to choose any public work it is authorised to undertake. [53] Under any of the applicable Acts, the Council would have been authorised to undertake urban renewal as a public work. Before the 2002 amendments this was because urban renewal was expressly provided for as a public work. After the 2002 amendments the Council was given a power of general competence to undertake any activity for the benefit of its district; to undertake works for the purpose of performing its role, and it is authorised to carry out such works as a public work. 30 [54] Moreover, pursuant to the Public Works Act 1981, works undertaken by a local authority for the purpose of performing its role are defined as public works. public work and work mean (a) local work that... any local authority is authorised to construct, undertake, establish, manage, operate, or maintain, and every use of land for local work which any local authority is authorised to construct, undertake, establish, manage, operate, or maintain by or under this or any other Act; and includes anything required directly or indirectly for any such local work or use: [55] It would be an odd thing if territorial authorities, empowered to acquire land for the purpose of urban renewal, could not change to the same purpose for land it had already acquired. [56] Hence the Council is entitled to hold the property for urban renewal purposes pending the determination of whether the property was surplus to Council s requirements pursuant to the Public Works Act [57] I am satisfied that the correct statutory interpretation supports the view that urban renewal was, and remains a legitimate purpose for a public work; and therefore that it was the case in 2008 or 2009 that the property could be validly retained for the public work purposes of urban renewal once the Council decided it did not need the property for roading. 30 Local Government Act 2002, s 12.

19 [58] I turn then to the issue of estoppel. Is there an estoppel? [59] The issue is whether the Council s advice of 9 December 2008 sets up an estoppel that disentitles the Council from asserting that the property was in fact required for another public work after it became surplus for roading purposes. The advice in the letter was that the property is no longer required for roading purposes and the Council wishes to sell it or use it for other purposes. Counsel for Ms Jones contends that by this advice and the Council s enquiry as to Ms Jones interest in purchasing the property, the Council has declared itself committed to sell or to use the property for a non-public work. [60] Counsel for Ms Jones essential argument is that the letter creates an estoppel by representation. He also argues that the statement that the Council wishes to sell [the property] or use it for other purposes not only makes clear that roading is no longer contemplated, but that it materially omits to convey that such purposes include another possible public work. His argument is essentially that the letter, objectively viewed, was an unequivocal commitment to the position that the property was no longer needed for roading and that there was, as a matter of present fact, no other identified public work for which it was actually required at the time it was written. Ms Jones, he contends, is entitled to rely on that. [61] The Council s case is it was entitled to enquire if there was any interest in purchasing the property as part of the process of determining what to do with it whether it keep it for the public work purpose of urban renewal or whether to sell it; and that its letter cannot on any objective reading, amount to any sort of estoppel. [62] The Council also submits that its contemporaneous documentation shows that it did not actually formally declare the property to be surplus for roading purposes until March 2009 though it did form the intention to possibly use the property for urban renewal purposes significantly earlier in April 2008; and that it confirmed that intention in It contends that, in these circumstances, the time that it took to decide the land was required for urban renewal cannot be criticised as unreasonable;

20 and therefore it cannot be said that the obligation to offer back arose because it took an unreasonably long time to determine whether to retain the land for another public purpose. [63] These claims are not the subject of any real controversy. Ms Jones does not argue that the Council did not in fact have a genuine intention in April of 2008 of possibly retaining the property for urban renewal or that the Council took longer than was reasonable to decide to retain the property for that purpose once it had decided that the property was not needed for roading purposes. Her argument turns solely on the correct meaning of the letter. [64] I am not satisfied that Ms Jones approach to the letter has any substance. The Council was entitled to a reasonable time after deciding the property was not needed for roading purposes (and before formally declaring it surplus for any public work) to consider whether to retain it for the alternative public work of urban renewal or to sell it. It was entitled therefore to take the time to enquire of Ms Jones what her interest in purchase was before making its decision. The fact that the letter states the property was no longer required for roading but omits reference to the live possibility that it was considering whether to retain it for another public work does not create an estoppel. The position may well have been otherwise if the Council did not in fact have in mind retaining the property for any other public work and no such option was under consideration; that would arguably have set up an obligation to offer it back. There is however no suggestion by Ms Jones and the Council says emphatically that it was not the case. [65] The applicant s argument that the property was by the letter of December 2008 declared surplus in 2008 can therefore not be sustained. Nor can the letter be read as creating an estoppel by representation when, viewed objectively, it stated that it was not an offer. [66] I turn then to the remaining issue of whether the 2015 offer was accepted by Ms Jones. Was the 2015 offer validly accepted?

21 [67] Council s letter in April 2015 included an offer to sell Ms Jones the property at its 2014 valuation of $900,000 pursuant to its statutory obligations under s 40. The evidence shows the property was declared surplus to all public work requirements under s 40 in 2014 and a market valuation for $900,000 was acquired for the property at that time. The time frame for acceptance of the offer was within 40 working days in line with the obligations set out in s 42(1)(a). 31 [68] The letter stated the conditions of the offer including the fact that if Ms Jones wished to accept it, she had the right to do so and both copies of the agreement had to be signed and returned within 40 working days. It also stated the Council had no obligation to negotiate the price or terms and conditions but that Ms Jones could make the agreement subject to the price being determined by the Land Valuation Tribunal. [69] I find that the offer was valid. [70] Ms Jones did not accept the offer within the first period allowed of 40 working days. Several extensions were given but she did not sign and return the agreement or require that the price should be determined by the Land Valuation Tribunal within the extra time allowed. [71] Counsel for Ms Jones submits however that the caveat should be sustained because she did accept the offer by repeatedly stating her interest and later her intention in purchasing the property in the letters; and that is sufficient acceptance. In effect she argues that her confirmation of an interest in purchase at the 2008 value during the ongoing dispute as to the terms (including what was the appropriate time to assess the current value) was sufficient to constitute acceptance without the parties signing an agreement within the time frame allowed. [72] The submission, it seems to me, conflates two issues. The first is whether the 2015 offer was a valid or an invalid offer; and the second is, if valid, what did Ms Jones need to do if she accepted the offer, but did not accept the offer price as a 31 Public Works Act 1981, s 42(1)(a) states that where any offer to sell land under 40(2) has not been accepted within 40 working days or such period as the local authority considers reasonable, the local authority may take further action under the Act.

22 proper reflection of the current value as at The first issue is one for the Court. The second is one for the Land Valuation Tribunal. The fact is that Ms Jones made plain that she did not accept the 2015 offer as a valid offer; she wanted an offer at the 2008 value as assessed by the Council s valuer at that time. [73] Having adopted that approach, her responses do not amount to acceptance of the 2015 offer. Had she advised that she accepted the offer but required the 2014 value to be fixed by the Land Valuation Tribunal, her argument may have had substance. The authorities, which I will turn to presently, make clear that an offer may be accepted subject to the current market value being agreed and failing agreement determined by the Land Valuation Tribunal. Ms Jones might even have added, with the Council s agreement, that her acceptance was to be without prejudice to the right to judicially challenge the validity of the offer, but she did not do that. The course she chose to take, on advice, was one that challenged the validity of the offer. For reasons I have discussed, I do not think the challenge is at all arguable. [74] Turning then to the authorities that make clear that an offer may be accepted subject to the current market value being agreed and failing agreement determined by the Land Valuation Tribunal, it is sufficient to refer to two of them. [75] The first is Sinclair v New Zealand Institute for Crop and Food Research Limited where a similar situation arose to that in the present case. 32 The respondent made a valid offer under s 40 to the applicants who, during ongoing discussion with the respondents, stated they were genuine in their wish to take up the offer and wish[ed] to progress with the purchase. His Honour did not accept that the correspondence amounted to an acceptance of an offer. The applicants were only prepared to commit to purchase the property if the respondent accepted their view on the valuation. He focused on the parties reaching agreement on the value and using the Land Valuation Tribunal as arbiter of that value: Sinclair v New Zealand Institute for Crop and Food Research Limited, (2006), 7 NZCPR 254 (HC) at [24]. At [55].

23 The obligations pursuant to s 40 do not encompass providing successors in title with an opportunity to challenge through that process the price upon which the land may be offered to them. It requires of successors in title a commitment to acquire the land, even though there may be reasonable doubt about the offered price. If it was otherwise, then the 40 day consideration period would likely never be workable, but instead subject to agreement being reached between the parties as to the basis on which the land should be valued. That view is supported by the fact that the arbiter of value was, in the event of a dispute, required to be the Land Valuation Tribunal. [76] The second, which reinforces the approach taken by Christiansen AJ, states that s 40 is not a sophisticated process for challenging the price - a commitment to the offer needs to be made. It is the decision of Attorney-General v McLennan. The Court noted: 34 Section 40 is a blunt instrument. It does not give the offeree, faced with a difficult judgement call on the acceptability of an offer for land whose value may be in the process of changing, the ability to require the crown to grant further time until there is some clarification of the position. [77] Applying the statutory provisions and these cases, Ms Jones was effectively required to do two things; firstly to make her intention to purchase the property clear, and secondly to provide some assurance that there would be an agreement on price the appropriate avenue being the Land Valuation Tribunal if she did not accept the Council s assessment of value. [78] I accept that the statements in Ms Jones s letter do demonstrate her interest in purchasing the property. She confirms her intention several times. But overall, the letters cannot constitute an acceptance of offer. Ms Jones disputed the time of valuation and wanted the market value as of 2008 to be applied. Her letters made plain that she would not accept the price offered in 2015 and or any price based on an assessment of the 2014 value. In effect, Ms Jones letters imply that even at the end of the extension period, she considered the 2015 offer invalid. As in Sinclair where the applicant s comments that they wished to take up the offer but did not accept the price were found not to constitute acceptance, I find there has been no acceptance on Ms Jones part Attorney-General v McLennan CA41/00, 7 December 2000 at [43]. Sinclair v New Zealand Institute for Crop and Food Research Limited, above n 32.

24 [79] The communications between her lawyers and the Council s do not indicate that an agreement on price would be reached; nor did Ms Jones apply to have the valuation determined by the Land Valuation Tribunal. It was by that means that she had the right to challenge the current value as of She did not exercise that right nor indicate another means of negotiating the price. As a result, the Council s valid offer was not accepted. [80] For these reasons I am satisfied that Ms Jones did not accept the Council s 2015 offer by way of her solicitor s letters. The successor s right to be offered the property back has therefore expired. Result [81] If it is clear that there is no valid ground for sustaining a caveat and that once the caveatable interest no longer exists, then the caveat should be removed. I am satisfied the Council made a valid offer in 2015 and fulfilled its obligation under s 40 of the Act. That offer has lapsed without Ms Jones validly accepting it. Accordingly, there is no reason why the caveat should be sustained. The application that the caveat not lapse is therefore declined. [82] As costs follow the event under the statutory costs regime, the Council is entitled to an order for costs. The applicant is ordered to pay to the defendant 2B costs plus disbursements as fixed by the Registrar. Associate Judge Sargisson