NEW ZEALAND KIWIFRUIT GROWERS INCORPORATED v GISBORNE DISTRICT COUNCIL [2021] NZHC 2198

NEW ZEALAND KIWIFRUIT GROWERS INCORPORATED v GISBORNE DISTRICT COUNCIL [2021]NZHC 2198 [25 August 2021]IN THE HIGH COURT OF NEW ZEALANDGISBORNE REGISTRYI TE KŌTI MATUA O AOTEAROATŪRANGANUI-A-KIWA ROHECIV-2021-416-15[2021] NZHC 2198UNDER the Judicial review Procedure Act 2016 andPart 30 of the High Court RulesIN THE MATTER of a rating decision by Gisborne DistrictCouncilBETWEEN NEW ZEALAND KIWIFRUIT GROWERSINCORPORATEDApplicantAND GISBORNE DISTRICT COUNCILRespondentHearing: 20 August 2021Appearances: T Mijatov for the ApplicantH P Harwood O Maassen for the RespondentJudgment: 25 August 2021JUDGMENT OF COOKE J[1] By application dated 13 August 2021 the Gisborne District Council (theCouncil) seeks to have these judicial review proceedings brought by the New ZealandKiwifruit Growers Incorporated (NZKG) stayed, pending a determination to avaluation objection relating to a property in Bushmere Road, Gisborne (the Bushmereobjection) presently before the Land Valuation Tribunal (the Tribunal). Theapplication is opposed by NZKG.Background[2] The judicial review proceedings brought by NZKG challenge the inclusion ofPlant Variety Rights licences for gold kiwifruit, known as G3 licences, in the valuationof growers' land for the purposes of setting the rateable value of that land, andaccordingly the rates.[3] Two claims are advanced. The first is that, as a matter of law, the licences arenot within the value of the land in accordance with the definitions in the RatingValuations Act 1998 (the Act). On that basis they are irrelevant to the assessment ofthe value of the land, and the Council is alleged to have erred in adopting valuationsthat include the value of the licence as part of the value of the land. The second claiminvolves a breach of natural justice. In essence it is alleged that a new policy wasadopted by the Council as a consequence of the Valuer-General publishing a statementin January 2021 to the effect that the value of the G3 licences should be included inrating valuations. It is alleged that it was procedurally improper for the Council toadopt that policy without giving growers the opportunity to be heard on that question.[4] There are 49 growers with G3 licences in the Gisborne district with over 63orchards.1 Only one of those growers has pursued the objection procedures in the Act,with this objection (the Bushmere objection) is now before the Tribunal. There is aright of appeal from decisions of the Tribunal to the High Court.[5] These proceedings initially came before me at a telephone conference. At thatstage the parties had presented a proposed agreed approach under which the BushmereRoad objection would be transferred by the Tribunal to this Court and heard togetherwith this judicial review proceeding.2 At the telephone conference on 5 August I raisedtwo concerns about that approach. The first was that the High Court would be dealingwith the objection proceeding removed to it without the benefit of a decision of theTribunal. The second was that appeals from the Tribunal are heard by the High Courtwith the Court sitting with an expert valuer.3 But that valuer could not sit with theHigh Court Judge on the judicial review proceeding. I accordingly saw logisticaldifficulties with what the parties were proposing, and suggested they consider thematter further.1 The statement of claim indicates the applicant represents 2,792 kiwifruit grower membersnationwide, and 90 kiwifruit growers in the Gisborne district.2 Land Valuation Proceedings Act 1948, s 22(2).3 Section 13.[6] The parties did so and advised that they no longer pursued that suggested wayforward, but rather that the Council's application to stay the judicial review proceedingwould be heard. In effect my initial resistance to what the parties had proposed movedthem back to their earlier positions where NZKG wanted the judicial reviewproceeding to be heard first, and the Council wanting the Bushmere Road objection toheard first.Assessment[7] I will not lengthen this judgment by recording the arguments advanced byMr Harwood and Mr Mijatov, but I will endeavour to address the key points whensetting out my reasoning.[8] In short, I have decided that the appropriate course is to stay these judicialreview proceedings pending further order of the Court. This will allow the issues tobe addressed by the Tribunal in the Bushmere Road objection, and then on appeal tothis Court if necessary. Whether there remains utility in the judicial reviewproceedings can then be assessed.[9] I accept Mr Mijatov's point that the starting point is that the growers have aright to peruse judicial review proceedings. Statutory powers of decision have beenexercised, and affected persons may seek to challenge the legitimacy of the exerciseof those powers. The right to apply for judicial review is a fundamental right, and isrecognised as such by the New Zealand Bill of Rights Act 1990.4 This right existseven when the applicant has a right of appeal to the High Court. This is recognised bythe Judicial Review Procedure Act 2016 which provides that the Court may give reliefin a judicial review proceeding "even if the applicant has a right of appeal in relationto the subject matter of the application".5[10] But judicial review is a discretionary remedy. As Cooke P said in Fraser vRobertson with respect to the legislative predecessor to the Judicial Review ProcedureAct:64 New Zealand Bill of Rights Act 1990, s 27(2).5 Judicial Review Procedure Act 2016, s 16(3)(a).6 Fraser v Robertson [1991] 3 NZLR 257 at 260 (CA).In New Zealand the judicial review jurisdiction under the JudicatureAmendment Act 1972, Part I, is discretionary and it is established practicethat, although the jurisdiction expressly extends by s 4(1) to cases where theapplicant has a right of appeal in relation to the subject-matter of theapplication, relief under the Act will be refused if the remedy of appeal is moreappropriate: see for instance Auckland Acclimatisation Society Inc v SuttonHoldings Ltd [1985] 2 NZLR 94, 103. [11] The earlier decision of the Court of Appeal in Auckland AcclimatisationSociety Inc contemplated the "withholding of the discretionary remedy of review whenan appeal is pending".7[12] For the same reasons a stay may be entered in circumstances where the Courtis satisfied that the more appropriate course is to allow the appeal to proceed. Indeedthis has happened on two previous occasions when judicial review proceedings havebeen brought in relation to matters that are also before the Tribunal. In TelecomNew Zealand Ltd v Christchurch City Council the High Court granted a stay of judicialreview proceedings to allow an appeal to proceed before the Tribunal.8 It is true thatthe Court of Appeal subsequently criticised the Tribunal for then granting what wereeffectively judicial review remedies in the proceedings before it (as well as the HighCourt to the extent it had contemplated that this could happen).9 But the Court did notcriticise the entry of a stay in itself. Later in Blair v Upper Hutt City Council the HighCourt again stayed judicial review and damages proceedings to allow the appeal beforethe Tribunal to proceed. Clifford J held:10[15] All this leads me to the conclusion that the efficient and fair resolutionof these matters would be best promoted if the decision of this Court on appealfrom the Land Valuation Tribunal has been determined and is available beforethe review and damages proceedings, and associated strike out applications,are heard. I think that this approach is consistent with those decisions whichindicate a preference for appeal rights being exercised in preference to judicialreview claims, whilst at the same time accepting, particularly in light of theTelecom decision, that the appeal against the Land Valuation Tribunal'sdecision may be unlikely, in this instance, to address all the concerns theappellant/plaintiffs have with the actions of the Upper Hutt City Council.7 Auckland Acclimatisation Society Inc v Sutton Holdings Ltd [1985] 2 NZLR 94 at 103 per CookeJ.8 Telecom New Zealand Ltd v Christchurch City Council HC Christchurch CP 68/02, 18 March2003.9 Telecom New Zealand Ltd v Christchurch City Council CA 25/04, 7 March 2005.10 Blair v Upper Hutt City Council HC Wellington CIV-2005-485-1961, 21 June 2006.[13] I accept that the fact that stays have so been entered in two previous cases doesnot mandate a stay being entered in the present case. It all depends on the facts andcircumstances of the present case, and what will lead to the most appropriateprocedural path for disposal of the issues that are raised. There are circumstances thatmay distinguish both Telecom and Blair. So what is required is a careful considerationof the present circumstances.[14] The present case nevertheless involves processes before a specialist tribunalwith valuation expertise established to deal with valuation disputes. For that reason itmight be thought that there is an advantage, or even a presumption in favour ofallowing the processes before the specialist body to proceed, and then addressedbefore the High Court on appeal.[15] The ultimate question involves the Court determining the way forward that bestsecures the fair and efficient consideration of the issues raised by these judicial reviewproceeding. I accept Mr Mijatov's point that a stay should not be granted unless thereare good reasons to do so. But it is also relevant that this is only an application for atemporary stay. The right to pursue judicial review will remain. The only question iswhether the applicant's appeal rights should be exercised first.[16] Mr Mijatov questioned what procedural powers the Court was being asked toexercise when considering the Council's stay application. The Court's proceduralpowers to control and give directions for a judicial review proceeding are to be foundin ss 13 and 14 of the Judicial Review Procedure Act. These powers are given a broadinterpretation. They allow the Court to apply other rules in the High Court Rules 2016to facilitate the just disposal of judicial review proceedings. For example they allowan application for strike out to be pursued with the leave of the Court.11 Similarly astay can be entered under r 15.1 of the Rules, or in connection with the discretion asto relief and associated procedural powers in judicial review proceedings. Moreovers 14(2)(l) and (m) allow a Judge to fix the time for hearing the judicial reviewproceeding and to give consequential directions as necessary. The discretionary11 See Hauraki Coromandel Climate Action Inc v Thames-Coromandel District Council [2020]NZHC 3228 at [21]-[22]; Hauraki Coromandel Climate Action Inc v Thames-Coromandel DistrictCouncil [2020] NZHC 444 at [15].powers associate with judicial review proceedings may be most relevant in a casewhere the ultimate question is one directed to securing the most efficient, effective andfair disposition of the proceedings.[17] I agree with Mr Harwood that a central question is "whether the statutoryobjection process is capable of effectively determining the issues raised in the judicialreview proceedings".12 As the Court of Appeal confirmed in Telecom New ZealandLtd v Christchurch City Council the Tribunal has no jurisdiction to hear and determinejudicial review challenges, or grant the kind of relief that the High Court in a judicialreview proceeding can grant.13 But it is relevant to consider whether it will assess, orbe required to assess, the substantive issues that are raised in the judicial reviewproceeding.[18] As indicated, the judicial review proceedings involve two claims, one directedto an alleged misinterpretation of the provisions of the Act, and the second alleging abreach of natural justice. I address both of those claims in turn.Misinterpretation of the Act[19] The main issue of substance raised in the judicial review challenge is that theG3 licences are not an interest in land under the Rating Valuations Act. Part of thatargument, as I understand it, is that the terms of the licences as issued effectively givethe licence holder the option when selling the land to include the licence rights in thesale or not. That is the licence rights do not inherently run with the land, and they arenot within the relevant defined terms associated with the relevant interests in land inthe Act.[20] I accept Mr Mijatov's point that this argument involves questions of law, andthat these questions can properly be addressed by the High Court in a judicial reviewproceeding. But I also accept Mr Harwood's argument that the issues are, or may be,mixed question of fact and law. It may be that it is rare for a G3 licence holder not toinclude the licence rights with the sale of the land on which the crop is planted. And12 Telecom New Zealand Ltd v Christchurch City Council, above n 8 at [23] per Chisholm J.13 Telecom New Zealand Ltd v Christchurch City Council, above n 9 at [39].if the licence rights do not get transferred with the land, there would remain a valuationexercise associated with the land planted with gold kiwifruit.[21] The Tribunal can be called upon to address such more complex mixedquestions of fact and law of this kind. For example it did so in Ngāti WhakaueEducation Endowment Trust Board v Rotorua District Council in relation toinalienable land,14 and is also called on to do so in other contexts, such as when landis subject to a lease.15 There is no specific statutory provision in relation to landsubject to licences. But the point is that such questions are addressed by, and arewithin the expertise of valuers, and ultimately the Tribunal. So I accept Mr Harwood'ssubmission that it would be within the jurisdiction of the Tribunal to address the mixedquestions of fact and law over what impact the G3 licences have on rating value.Indeed such questions would be regarded as squarely within this Tribunal's expertise.The Tribunal is comprised of an Environment Court Judge and two expert valuers.Whilst the High Court could also address these questions in a judicial reviewproceeding, it would be of significant advantage to the Court to address thosequestions with the advantage of a decision of the specialist lower tribunal, and alsogiven the assistance provided from the Court sitting with a valuer.[22] Mr Mijatov argued that the growers nevertheless wished to pursue the claim injudicial review because there were discrete questions of law that did not involve morecomplex factual evaluations, and that it was more efficient to obtain the High Courtdecision on those questions rather than proceeding before the Tribunal. As pleaded,the judicial review claim is advanced on the basis that the G3 licence rights are totallyirrelevant to the land valuation exercise – in other words it is raised as an all or nothingquestion. So it is not advanced in a way that engages the more complex evaluationquestions that might be said to arise.[23] But although the claim is advanced on this basis, it is not clear to me that themore complex questions can necessarily be avoided. At the very least they appearrelevant. It creates potential difficulty for the High Court to consider those more14 Ngāti Whakaue Education Endowment Trust Board v Rotorua District Council [2021] NZLVT008.15 See Rating Valuations Act 1998, s 21.complex issues in a judicial review proceeding, even to evaluate whether they mayarise at all, without the benefit of a decision of the Tribunal and an expert valuer onthe Court. The position might be different if it was clear that the more complex, andevaluative, questions would definitely not arise for consideration in the judicial reviewchallenge. But I am not presently persuaded of that. Faced with the choice, it seemsto me that it would be far better for the High Court to address the issues raised in thejudicial review proceedings with the fuller assistance that the statutory objectionprocedures provide.[24] Mr Mijatov argued that the judicial review proceeding was advanced by asignificant number of the growers who are members of NZKG, and that only one ofthose members had the proceeding before the Tribunal in the Bushmere Roadobjection. But I accept Mr Harwood's response on that point. The Bushmere Roadparty is part of the grower group, and it is represented by the same counsel. It can beexpected to advance the same points that the group wishes to raise in the judicialreview proceeding. Following the decision of the Tribunal, or this Court in theBushmere Road objection the Council can effectively be required to reassess the ratingvalue of other landholdings if an error in approach is identified. I understoodMr Harwood to accept on behalf of the Council that it would be obliged to do so.Moreover under s 16 of the Act any owner or ratepayer may request a revaluation, andthen any new valuation, or a refusal to make one, itself becomes subject to theobjection procedures involving the Tribunal and the High Court under s 16(4) of theAct. This means that the Bushmere Road objection can be precedent setting for all theother growers in the same, or a similar position. In addition given the judicial reviewproceeding is only sought to be stayed it could later be pursued if necessary.[25] I accept that there may be some delay for the growers in having the issue thatthey seek to have so determined. The affected growers will be obliged to pay rates atthe higher levels set by the decisions they seek to have challenged in the meantime.But as Mr Harwood pointed out there is a right to have any excessive rate paymentsrefunded, and with interest. So that mitigates the adverse effects involved.The Natural Justice Allegations[26] Different considerations apply in relation to the natural justice claim.[27] I accept Mr Mijatov's argument that it is clear that the Tribunal, and even theHigh Court on appeal, has no jurisdiction to address the natural justice challengeadvanced in the judicial review proceedings by NZKG. But there is a related issueconcerning that aspect of the challenge which goes back to the discretionary nature ofjudicial review relief. In Telecom New Zealand Ltd v Christchurch City Council theCourt of Appeal addressed a similar situation where the High Court had stayed thejudicial review proceedings to allow the related proceedings to proceed before theTribunal.16 There the Court held:[59] even if Telecom showed that the processes leading to the valuationswere defective, it is highly likely that the High Court would have held that ahearing de novo before the tribunal would cure any deficiencies and that theHigh Court would have simply declined relief in its discretion under theJudicature Amendment Act 1972, s 4(3): Slipper Island Resort Limited vNumber One Town and Country Planning Appeal Board [1981] 1 NZLR 143(CA) at 145; Smith v Waikato County Council (1983) 9 NZTPA 362 (HC);McNaughton v Tauranga County Council (No 2) (1987) 12 NZTPA 429 (HC);Commissioner of Inland Revenue v Dandelion Investments Limited (2001) 20NZTC 17,293 (HC) at [57]. We accept that those cases involve in the mainappeals in circumstances where it was argued natural justice had been deniedat first instance. But in our view, the principle holds good by analogy. Indeed,it could be said the principle applies a fortiori here given that the tribunal'shearing is de novo with none of the restrictions normally inherent in an appealprocess.[28] More recently the High Court has declined to give interim relief in judicialreview proceedings which raised allegations of procedural impropriety by the Tribunalincluding because the subsequent appeal to the High Court had the potential to curesuch procedural deficiencies.17[29] Similar points may arise here. The Court will be in a much better position toassess whether there has been any procedural impropriety in the overall process oncethat process has been completed. It could conclude that any complaint that the growersshould have been consulted before a change in rating policy should not give rise to adecision to set aside the rating decisions because the statutory rights to participate in16 Telecom New Zealand Ltd v Christchurch City Council, above n 9.17 Rongotai Investments Ltd v Land Valuation Tribunal [2019] NZHC 3040 at [25].an objection procedure, including the rights of appeal, and the rights so exercised,mean that no such relief is necessary, or appropriate.Conclusion[30] For these reasons I grant the Council's application to stay the judicial reviewproceedings. The proceedings are stayed pending further order of the Court. Ianticipate that the proceedings will be stayed at least until the decision of the Tribunalon the Bushmere Road objection, and possibly pending the outcome of an appeal tothis Court. A stay pending further order allows the Court to reassess the position asevents unfold. Both the parties have leave to apply to have the stay lifted givendevelopments.[31] I discussed with counsel at the hearing that irrespective of the outcome of thisapplication that costs should be reserved. This was at least in part because of thegenuine attempt that has been made by both sides, and counsel for both sides, to tryand work out the most efficient way forward for these matters. Costs will accordinglybe reserved.Cooke JSolicitors:Simpson Grierson, Wellington for the Respondent