CHIEF EXECUTIVE OF LAND INFORMATION NEW ZEALAND V G F S HANLEY AND ANOR HC NWP CIV 2007-443-000265

CHIEF EXECUTIVE OF LAND INFORMATION NEW ZEALAND V G F S HANLEY AND ANOR HC NWP CIV 2007-443-000265 15 May 2008IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY CIV 2007-443-000265IN THE MATTER OF the Overseas Investment Act 1973 AND IN THE MATTER OF the Overseas Investment Act 2005 BETWEEN CHIEF EXECUTIVE OF LAND INFORMATION NEW ZEALAND Applicant AND GARRY FRANCIS SIDNEY HANLEY First Respondent AND DEBORAH JANET ELDRID MARRIOTT Second Respondent Hearing: 13 May 2008 Counsel: P K Feltham for applicant R C Laurenson for respondents Judgment: 15 May 2008 at 2.30pmJUDGMENT OF ASSOCIATE JUDGE ABBOTTThis judgment was delivered by me on 15 May 2008 at 2.30pm pursuant to Rule 540(4) of the High Court Rules.Registrar/Deputy RegistrarSolicitors: Crown Solicitor, PO Box 10357, Wellington for applicant Nicholsons, PO Box 68, New Plymouth for respondents[1] The applicant, the Chief Executive of Land Information New Zealand (LINZ), is seeking leave to bring this proceeding by way of originating application under Part 4A of the High Court Rules. [2] The application for leave is made as part of the substantive application seeking orders directing the respondents to dispose of a block of rural land (just under six hectares in area) for alleged breach of the Overseas Investment Regulations 1995. The regulations apply because the respondents are Australian citizens. The alleged breach is that they failed to obtain consent to the purchase from the Overseas Investment Commission, or the Overseas Investment Office. [3] The respondents oppose leave. They wish to have the matter determined as an ordinary proceeding with pleadings, rights to discovery, and the ability to have evidence given viva voce. [4] For the reasons that I will now give I consider that the Court should give leave to the respondents to bring the substantive application under Part 4A of the High Court Rules.The application[5] The substantive application is brought under s 18A of the Overseas Investment Act 1973, under which the Court may order an overseas person to divest himself or herself of land acquired in contravention of the Act or regulations made under it. Under reg 8 of the Overseas Investment Regulations 1995 (made pursuant to the 1973 Act) an overseas person must obtain consent of the Minister of Lands to the purchase of land exceeding five hectares in area before that transaction becomes effective. Although the 1973 Act and the 1995 Regulations have been repealed by the Overseas Investment Act 2005, they continue to apply to transactions (such as this) entered into before 25 August 2005. [6] The respondents did not seek or obtain consent of the Minister of Lands before acquiring the land at issue in this proceeding. After the present application was filed the applicant agreed to consider a retrospective application for consent.That application was made, and declined. The only issue in the substantive proceeding, accordingly, is how the Court should exercise its discretion under s 18A of the 1973 Act.The respondents' opposition[7] The respondents have still to file any documents in opposition. The applicant agreed initially to the respondents deferring formal steps whilst the retrospective application was addressed. The issue over leave came up in a case management conference on 5 February 2008. Counsel for the respondents did not have instructions at that time but subsequently filed a memorandum advising that the respondents opposed leave on the grounds that: a) The applicant knew (or ought to have known) that the matter would be contested; b) There was no express entitlement to bring it by way of originating application without leave of the Court; c) The matter is more appropriately brought as an ordinary action (with pleadings, discovery, and oral evidence).The originating application procedure[8] The originating application procedure is to be found in Part 4A of the High Court Rules. It is available for use without leave in applications under a wide range of specified statutory provisions set out in r 458D(1)(a), and for applications in certain other types of proceeding (contempt, relief against forfeiture of a lease, directions sought by liquidators, receivers or managers appointed under various statutes, and leave for service of subpoenas to witnesses in Australia) - r 458D(1)(b). [9] The procedure may also be used for proceedings by leave of the Court (r 458D(1)(e)):(e) any other proceeding that the Court, in the interests of justice, permits to be commenced by the filing of an originating application.[10] Initially the criterion of "interests of justice" under r 458D(1)(e) was given a narrow interpretation, and the procedure was considered to be "an expedient for cases where there was in reality no opposing party": Jones v H W Broe Limited(1989) 5 PRNZ 206, 207. However, this narrow interpretation has since been questioned in CIR v McIlraith HC Hamilton M162/02, 19 February 2003, Randerson J:However, I am satisfied that matters have moved well beyond the position which applied in 1989 and a review of the matters now specifically included under r 458D shows that Part IVA is intended to have much wider application than earlier envisaged. The same point is also demonstrated by the number and variety of cases in which leave has been granted to use the Part IVA procedure under the 'interests of justice' provision: seeMcGechan on Procedure paragraph HR 4580.09.[11] It is not appropriate, in my view, to fetter the Court's discretion to determine what cases are suitable for leave. Ultimately it will be a matter whether, on balance of the various interests involved, it is just to allow the procedure to be used.Factors in the present case[12] The applicant argues that the interests of justice require the efficient and expeditious procedure under Part 4A for applications of this nature. The applicant draws a comparison with applications similarly affecting property rights that are specifically permitted under certain sub-paragraphs of r 458D(1)(a): (xvii) applications under the Proceeds of Crime Act 1991 (which include applications for confiscation orders); (xviii) applications under various provisions of the Property Law Act 2007 (for leave for a mortgagee to enter into possession, for a mortgagee or receiver to sell mortgaged goods, for a lessor to recover possession for breach of a lease, or for a lessee or others to apply for relief against cancellation or a refusal to renew).[13] This does not appear to be a case where there will be any significant disputes of fact. The respondents accept that they did not obtain consent as required by the 1995 Regulations. The issue for the Court will be whether to make the orders, having regard to the generally non-contested surrounding circumstances. It seems unlikely that there will be any dispute over the facts as to purchase, the reasons for failure to obtain consent before the transaction settled, or the decisions made by the applicant. It seems more likely that the matter will turn on interpretation of the legislation and application of uncontested facts to the statutory provisions and their underlying purposes. [14] The respondents say that they are not wishing to delay the matter, but contend that they should be allowed the full range of procedures available under the High Court Rules (pleadings, discovery and oral evidence) to determine the matter. They rely on Watercare Services Ltd v Registrar of Companies (2004) 17 PRNZ 191 where the Court declined leave to bring an application to restore a company to the Companies Register by way of originating application. [15] I am not persuaded that this application needs the formal pleading of a statement of claim and statement of defence to identify the issues. As I have already said, it seems unlikely that there will be any dispute over material facts (although I accept that there may be a wish to explore facts in cross-examination). The applicant has identified the basis on which the application is being brought in its grounds for the application. The factual basis (that the respondents are overseas persons and did not obtain consent) is not in dispute. That merely leaves the issue of whether it is just that the orders be made. Factors bearing on the exercise of the Court discretion will emerge from the affidavits. [16] Similarly, I do not see that the respondents' wish for discovery is a compelling factor. As I understand it, the respondents' wish for discovery is to obtain the applicant's internal documents (which will show how the decision was reached and what material was taken into account in the applicant's decision). All other relevant material would have to be in the hands of the respondents, and to have been supplied by them to the applicant, either when first challenged about the lack of consent or in support of their application for retrospective consent.[17] If the respondents had considered the applicant's internal memoranda and correspondence to be relevant they could have sought it by request under the Official Information Act 1982. It is significant that they have neither made such request, nor did their counsel see a need for this material when directions for advancing the substantive application were first considered at the first case management conference on 5 February 2008. If the material is relevant, directions for disclosure can be made under r 458I. [18] In the interests of advancing matters counsel for the applicant has indicated that the applicant's file (with the exception of any privileged material) could be made available to the respondents within fourteen days. If the parties cannot agree on this, the respondents can seek an order. [19] The last matter raised by the respondents for opposing leave was that the respondents wish to have evidence given orally. Again I do not consider that that is a determining factor in deciding whether this is the proper process. If the matter was brought as an ordinary action evidence would still be provided by way of written brief in the absence of a contrary direction. I can see no reason to direct oral evidence in this case. There is no suggestion that credibility will be in issue. If there is need to explore facts beyond what is given in affidavits, the respondents can seek cross-examination. [20] Counsel for the respondents said that they wished to give evidence in person so that the Court "had the opportunity to fully appreciate the human dimension associated with the claim". I am sure that that will be apparent to the trial Judge from affidavits, but counsel for the applicant also indicated a willingness to have them give some oral evidence to bring this aspect before the Court. That would be a matter for the trial Judge: r 458L. [21] I do not consider that Watercare Services Ltd v Registrar of Companiesapplies to this case. In that case the issue was whether an originating application should be permitted when there was specific provision for the application to be brought under Part 4 (rather than Part 4A) of the High Court Rules. Moreover, it isclear from Associate Judge Faire's judgment that there were issues of improper conduct needing to be addressed. There is no such suggestion in this case.Decision[22] In my view the originating application is the most efficient and expeditious procedure for this case. It is unlikely that there will be any disputes on relevant facts. The facts material to the application can be put before the Court effectively, and most efficiently, by way of affidavit and exhibits. The respondents' concerns can be met fairly under this procedure. [23] I grant leave to the applicant to bring this matter before the Court by way of originating application under Part 4A._________________________Associate Judge Abbott