RONGOTAI INVESTMENTS LIMITED v WELLINGTON CITY COUNCIL [2019] NZHC 2742

RONGOTAI INVESTMENTS LIMITED v WELLINGTON CITY COUNCIL [2019] NZHC 2742 [25 October2019]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2019-485-430[2019] NZHC 2742BETWEEN RONGOTAI INVESTMENTS LIMITEDAppellantAND WELLINGTON CITY COUNCILFirst RespondentAND NZ CASH FLOW CONTROL LIMITEDSecond RespondentAND 2468 LIMITEDBUNNINGS LIMITEDWELLINGTON INTERNATIONALAIRPORT LIMITEDThird RespondentsAND VALUER-GENERALIntervenerHearing: 27 September 2019Appearances: J K Scragg and E M Greig for the AppellantM J Barnes for the First RespondentK P Sullivan for the Second Respondent and 2468 LimitedL M McEntegart and S K Lennon for Bunnings LimitedB M Russell and B G Frowein for Wellington InternationalAirport LimitedAppearance for Intervener is excusedJudgment: 25 October 2019JUDGMENT OF CULL J[for expedited hearing and for addition of parties to the proceeding][1] Rongotai Investments Ltd (Rongotai Investments) has filed an appeal from thedecision of the Land Valuation Tribunal (the Tribunal) dated 19 July 2019 (theDecision).1 This is an interlocutory hearing to deal with three applications. First,Rongotai Investments' application for an expedited hearing of a legal question in itsappeal as a separate standalone hearing. Second, the application by some parties tointervene. Wellington International Airport Ltd (Wellington Airport) seeks leave tocross-appeal as a person affected by the Tribunal's order under s 26 of the LandValuation Proceedings Act 1948. Wellington Airport was not a party to the Decision.In addition, Bunnings Ltd (Bunnings), a non-party to the first instance hearing, seeksjoinder to these proceedings. Both applications are opposed by Rongotai Investments.[2] Rongotai Investments owns the freehold interest in the two rating units in issuein the Decision. New Zealand Cash Flow Control Ltd (Cash Flow) and 2468 Ltd leasethe rating units from Rongotai Investments under 21 year perpetually renewableground leases, called Glasgow Leases. Cash Flow, 2468 Ltd, and RongotaiInvestments all objected to the Wellington City Council's 2007 general ratingrevaluation of the two units (the 2007 Objections). The 2007 Objections were thesubject of the Tribunal's Decision.[3] Importantly, the 2007 Objections are part of a wider series of objections to thegeneral rating revaluations of a number of rating units in the Rongotai area. ThoseObjections relate to the 2012, 2015, and 2018 general rating revaluations (the 2012Objections, 2015 Objections, and 2018 Objections). Each set of Objections has beenset down to be heard by the Tribunal. The Tribunal heard the 2007 Objections from25 to 29 March 2019 and released its Decision in July; the 2012 Objections were heardby the Tribunal in September and its decision is forthcoming; and the 2015 and 2018Objections are yet to be heard.[4] It appears to have been accepted that many of the same rating units are in issuein each of the respective Objections and that there are common parties to thoseObjections, with crossover as to the factual and legal issues.1 New Zealand Cash Flow Control Ltd & Others v Wellington City Council [2019] NZLVT 078.Background facts[5] As the Tribunal recorded in its Decision of 19 July 2019, there is a significanthistory to these proceedings. The 2007 Objections relate to two properties within adevelopment adjacent to Wellington Airport known as Rongotai, and involveobjections to rating revaluations as at 1 September 2007 by Quotable Value for theWellington City Council. As the Tribunal records, the 2007 Objections form onerevaluation in a series of revaluations that have either been resolved, such as the 2004valuations, or are still to be resolved (the 2012, 2015 and 2018 Objections). In itsDecision, the Tribunal decided the capital and land value of the relevant properties,and in doing so held that constraints that have a general impact on such values, suchas those created by leases, can be taken into account in appropriate cases.2[6] Following the Tribunal's release of the Decision, Rongotai Investments filedan application with the Tribunal seeking a stay, adjournment, or enlargement of the2012 Objections hearing, on the basis that an appeal was to be filed in relation to theDecision. In declining the application for stay, the Tribunal canvassed the reasons forits approach in its decision of 20 August 2019 (the Stay Decision),3 which I set outbelow.[7] In 2013, Rongotai Investments filed objections to the 2012 rating review.Despite seeking urgent resolution of the issues, the objection languished until theTribunal learned of its existence in 2018. In 2018, Judge Dwyer convened a casemanagement conference which identified that further valuation objections for 2018were likely and since that time, those objections were filed. Judge Dwyer observed,as recorded by the Tribunal, that the 2004 Objections were over 13 or more years old,the 2007 Objections were over 10 years old and the 2012 Objections over five yearsold.4[8] Under the heading "Urgency and justice", the Tribunal recorded its view as towhy there was a real urgency to have this matter heard:2 At [88]. The Tribunal held that s 21(1)(b) of the Rating Valuations Act 1998 does not precludesuch constraints from being taken into account.3 Rongotai Investments Ltd & Ors v Wellington City Council [2019] NZLVT 083.4 At [7].[8] There is no doubt in our minds at all that there was a real urgency tohave this matter heard. This Tribunal has as its object the just, speedy andinexpensive determination of objections and seeks results that best promotethe ends of justice. In this case, we are all satisfied that continued justicedelayed was justice denied. All parties appear to have accepted that until thisapplication was filed at the end of July 2019.[9] The Tribunal noted there were some significant differences between the 2007and 2012 valuations, with the main difference being the global financial crisis and thefact that land valuations have reduced from the 2007 valuations.5[10] The Tribunal then set a timetable in March 2019, to ensure that issues that hadpreviously arisen in the late hearing of the 2007 Objections did not arise for theoutstanding Objections yet to be heard. On that basis, the Tribunal decided that the2012, 2015 and 2018 Objections needed to be dealt with promptly and in accordancewith the timetable of the Court, which it records that the parties "agreed to".6 Therewas a strict timetable and extensions were granted for illness only.7[11] The Tribunal recorded that it was clear from a Minute of the Tribunal that itintended that the hearing for the 2015 Objections was to take place in November orDecember 2019.8 The Tribunal recorded "[we] are concerned that delay may prejudicethe owners and the lessees. We have already lost one witness, Mr Wall, and theTribunal members' terms come to an end in May 2020."9[12] The Tribunal expressed its concern that if the 2012, 2015 and 2018 Objectionswere not heard by the Tribunal before May 2020, they are likely to have to be heardde novo, creating even more difficulty in assessing markets going back to 2007 and2012.10 The Tribunal pointed to the problems arising from valuation differences inmarkets between 2007 and 2012, and recorded that all the witnesses before theTribunal agreed that the global financial crisis had a major impact in 2008 andarguably up to the time of valuation in 2012.115 Rongotai Investments Ltd & Ors v Wellington City Council, above n 3, at [9].6 At [11].7 Rongotai Investments Ltd & Ors v Wellington City Council, Minute of Land Valuation Tribunal,March 2019.8 At [12].9 At [13(c)].10 At [13(d)].11 At [13(e)].[13] After considering the evidence from the two principal valuation experts whogave evidence at the 2007 Objections hearing and were cross-examined on s 21 of theRating Valuations Act 1988, the Tribunal did not accept the submissions of RongotaiInvestments that further evidence was required in light of the Tribunal's Decision.12In declining Rongotai Investments' application for stay, adjournment, or enlargement,the Tribunal considered that the interests of justice in the circumstances of this caseare best resolved by proceeding with the hearing, which has been "well signalled" tothe parties for over a year.13The separate question and expedited hearing[14] In these proceedings, Rongotai Investments seeks an allocation of a priorityfixture to hear a separate question of law under rules 7.6 and 10.15 of the High CourtRules 2016. The question of law has been formulated by Rongotai Investments asfollows:What is the correct approach under the Ratings Valuations Act 1998 (Act) toassessing the land value of a rating unit subject to a lease, in particular:(1) What is the correct interpretation of "land value" in s 2 of the Act?(2) In what circumstances (if any) can the lease, any of its provisions, orany circumstances arising out of the lease be taken into account, inlight of the correct interpretation of "land value" and s 21 of theCourt?(3) How are any such matters to be taken into account?[15] Rongotai Investments seeks a priority fixture on this legal question principallyon the grounds that the legal question arising from the Decision will also arise in the2012, 2015 and 2018 Objections. In Rongotai Investments' submission, thedetermination of the legal question will inform the Tribunal's decision as to the 2012Objections, which was heard in August and for which a decision is awaited. It issubmitted it will also set the scope of evidence for the Tribunal's hearings of the 2015and 2018 Objections and therefore the legal question ought to be determined beforethose Objections so that the Tribunal and the parties have certainty on these matters.12 At [15].13 At [21].[16] Because the Tribunal has scheduled a five-day hearing for the 2015 Objections,starting on 25 November 2019, and indicated the 2018 Objections will be heard inearly 2020, Mr Scragg for Rongotai Investments seeks a priority fixture before thosescheduled dates and before the delivery of the Tribunal's 2012 Objections decision.Rongotai Investments' application is strongly opposed by Cash Flow, 2468 Ltd, andthe non-parties to the 2007 Objections hearing, Wellington Airport and Bunningsrespectively.[17] I put to one side the issue of joinder and cross-appeal from the two non-partiesfor the present in order to deal with the issue of whether there should be an expeditedhearing of the separate question of law. The grounds on which Cash Flow and 2468Ltd (the parties) oppose the making of the orders can be summarised as follows:(a) Requiring the parties to separate out a legal question to argue an urgentappeal in the context of the scheduled Tribunal hearings is the antithesisof a just, speedy and inexpensive determination of the appeal.(b) The parties have cross-appealed the Decision regarding the land value,which is at the heart of Rongotai Investments appeal, but on differentgrounds. The parties agreed to the determination of the 2007Objections in the Tribunal on the basis that the 2012, 2015, and 2018Objections would follow.(c) The 2012 Objections provided all parties, including the non-parties,with a greater opportunity to file expert evidence as to the impact ofleasehold tenure on the rating valuation, the s 21 issues, and the valueof the lessor's interests at issue.(d) There is no basis for urgency, as all parties acknowledge the processput in place by the Tribunal to determine these related Objections overthe same or similar properties sequentially and in a timely mannerfollowing many years of delay.[18] These grounds of opposition largely mirror those of the non-parties.[19] Rule 10.15 of the High Court Rules 2016 enables the Court to make orders forthe decision of any question separately from any other question in a trial or furthertrial in a proceeding. Its purpose is to "expedite proceedings by limiting or definingthe scope of the trial in advance or obviating the need for a trial altogether."14Rule 10.15 is not restricted to hearings involving the exercise of the Court's originaljurisdiction, but may also apply to appeals. As Mallon J in Attorney-General v IdeaServices Ltd said:15There may be situations where "the just, speedy, and inexpensivedetermination" of an appeal is secured by the determination of a preliminaryquestion.[20] I consider that Rongotai Investments' application does not raise a discretejurisdictional point, unlike the issue in Idea Services. The approach by the Tribunalin its Decision was to determine the freehold value as at 1 September 2007 and applya constraint for the leasehold nature of tenure.16 Although s 21 of the RatingValuations Act may be a discrete legal point on appeal, it is part of an expert valuationprocess determining the rating valuation of land, not a standalone exercise. I do notconsider it is amenable to determination as a preliminary or separate question, withoutthe factual and market context of the valuation approach. This necessarily involves areview of the evidence.[21] Even if I am wrong about that issue, there are three reasons which I considercount against a separate hearing:(a) It will cause delay, not expedite the hearings.(b) The parties had agreed to the four hearings being heard sequentially,with appeal issues being addressed later.(c) The consequences of not proceeding with the scheduled hearings willcause further complication.14 Innes v Ewing (1986) 4 PRNZ 10 (HC) at 18.15 Attorney-General v Idea Services Ltd HC Wellington CIV-2011-485-1562, 16 December 2011 at[37].16 New Zealand Cash Flow Ltd v Wellington City Council, above n 1, at [88].[22] Dealing first with delay, I cannot overlook that the rating objections were some13 or more years old for the 2004 Objections, over 10 years old for the 2007Objections, and some five years old for the 2012 Objections as at the first prehearingconference in 2018. The Tribunal's reasons for scheduling the four hearings by thesame panel before the panel's terms come to an end in May 2020 was designed toalleviate the difficulty in retrospective valuation assessments and assist the parties inhaving the matters determined. The impact of delay, such as the impact of the globalfinancial crisis on valuation undertaken between 2008 and 2012, is an illustration ofthe need to have these matters resolved.[23] Secondly, the Tribunal, with the general agreement of all parties to theproceedings in relation to the 2007, 2012, 2015, and 2018 revaluations, scheduledconsecutive hearings, aimed to be completed within 12 months, to enable decisions tobe issued promptly. The appeal issues, which were clearly raised with the Tribunal aspart of its scheduling process, were factored into the scheduling. The Tribunal notedthey could be addressed after the hearings had been heard and determined. TheTribunal has specifically said:17Appeals were anticipated and the Tribunal intended (with the partiesunderstanding) to complete all objections so appeals could be heard together.If all matters were remitted back to the LVT [Tribunal] after appeal, thesecould be heard at the same time a[s] the LVT assisting with a just, speedy andinexpensive solution. This is especially so given the extreme delay and thecosts of repeated hearings;It is clear from the Tribunal's directions that all parties wanted resolution of theseoutstanding valuation Objections. I consider the Tribunal established an agreedprocess to obviate further delays. The Tribunal's management of those hearings andthe reasons for them should not be thwarted.[24] Thirdly, I am satisfied there will be considerable complications, causingsignificant prejudice, if the scheduled hearings are not completed before the Tribunal'smembers' terms come to an end in May 2020. It is preferable, as the Tribunal statedin its Stay Decision, that the same panel hear all four sets of Objections. If, on appeal,the matters are remitted back, the issues can be easily remedied by the Tribunal,17 Rongotai Investments Ltd & Ors v Wellington City Council, above n 3, at [13].particularly as all four decisions will have been heard by the same panel, with the sameexpert witnesses.[25] For the above reasons, I decline the application for a separate question and anexpedited hearing.Joinder of non-parties[26] Wellington Airport seeks leave to cross-appeal the Tribunal's Decision, andBunnings seeks to be joined as a party to this appeal proceeding. RongotaiInvestments opposes both applications.[27] I record that the Valuer-General sought and was granted leave to join theproceedings.18 The Valuer-General indicated that the point of interest in theseproceedings is the issue of s 21 of the Rating Valuations Act 1998 and the principlesof statutory interpretation arising in the proceedings.Wellington Airport's application[28] Wellington Airport seeks leave to cross-appeal the Decision under s 26 of theLand Valuation Proceedings Act 1948. Section 26 provides:26 Appeals to court against orders of Land Valuation Tribunals(1) Within the prescribed time after the making of any final order of aLand Valuation Tribunal or within such further time as may beallowed by the court, Her Majesty (acting by any Minister or by aCrown representative appointed under section 36) or any personaffected by the order may, in accordance with the rules of the court,appeal to the court from the order or from any part thereof. Everysuch appeal shall be by way of rehearing.[29] Wellington Airport applies as a "person affected" by the Decision because,having acquired an interest in four Rongotai properties after 2007, it was engaged inthe Tribunal 2012 Objections proceedings and will be involved in the subsequent 2015and 2018 Objections hearings. It says its interest is similar to the interests of the cross-18 Rating Valuations Act 1998, s 37(1)(c); and Rongotai Investments Ltd v Wellington City CouncilHC Wellington CIV-2019-485-430, 27 August 2019.appellant parties, Cash Flow and 2468 Ltd, as they are all lessees under the registeredground leases, with Rongotai Investments being the lessor.[30] Wellington Airport contends that the rent payable under the ground leases isdirectly linked to the rating valuation set for the properties, and the issues arising fromthe appeal will bind the Tribunal and may well directly influence the outcome of thesubsequent proceedings. For that reason, Wellington Airport submits that it is a"person affected" by the Tribunal's Decision, and because of its participation in theother three hearings, it should have leave to cross-appeal in these proceedings.[31] I record that Wellington Airport's leave to appeal was filed out of time.Wellington Airport was not served with the notice of appeal dated 2 August 2019 byRongotai Investments, but was served with the cross-appeals from Cash Flow and2468 Ltd dated 20 and 21 August 2019. As a result, Wellington Airport appeared atthe first case management conference on 26 August 2019 to foreshadow its applicationto join the appeal proceedings. In the circumstances, I am satisfied that WellingtonAirport took immediate steps as soon as it became aware of this appeal, and noprejudice has been caused by the delay in filing its application. I grant leave toWellington Airport to apply for leave out of time.Bunnings' application[32] Bunnings seeks to be joined as a party under the High Court Rules on the basisthat its "presence before the court may be necessary to adjudicate on and settle allquestions involved in the proceeding."19 It submits that it has an interest arising outof the appeal decision concerning "the owner's state or interest" in the land and themanner in which that interest is to be valued under s 21 of the Rating Valuations Act1998.[33] As with Wellington Airport, Bunnings was not a party or involved in the 2007Objections hearing, but has been involved in the 2012 Objections hearings and will beinvolved in the 2015 hearing. Bunnings submits that their interest in the appeal arisesbecause the question in issue in the appeal also arises in the 2012, 2015, and 201819 High Court Rules 2016, r 4.56(1)(b)(ii).revaluations. As with Wellington Airport, Bunnings subsequently acquired its interestin properties in Rongotai after 2007.[34] Following this hearing, Rongotai Investments filed a memorandum drawingmy attention to the fact that Bunnings was not listed as a party to the 2018 Objectionshearing because it had not filed objections to the 2018 general rating revaluation.However, Bunnings has applied for an order to be joined as a party to the 2018Objections hearing and its application is yet to be determined by the Tribunal. I notethat in its grounds for joinder, Bunnings has submitted to the Tribunal that it has aninterest as the lessee of three properties, the subject of the 2018 proceedings, andwishes to preserve its position in future years by being heard as a party.[35] In summary, Bunnings submits that it has legal rights which will be directlyaffected by the outcome of the question in the appeal and has a specific argument,which is not being advanced by another party. It wishes to protect its rights.Rongotai Investments' opposition[36] Although acknowledging that the Court has a discretion as to joinder of parties,Mr Scragg for Rongotai Investments submits that there is no right for Bunnings toparticipate. If, however, either Wellington Airport or Bunnings is allowed to intervene,he submits that they should not be heard as a full party, as sought by WellingtonAirport, but as an intervener, and limited to dealing with the legal issues that arose inthe 2007 Objections hearing. His concern was that they should not be permitted toraise new issues which, in this case, would include an issue about the interpretation ofimprovements. Nor should they, he says, be entitled to dictate the procedure by whichthe appeal proceeds. Mr Scragg relies on Seales v Attorney-General, where Collins Jallowed intervention by other parties as interveners, but on a confined basis.20[37] Rongotai Investments acknowledges the authority of Capital and MerchantFinance Ltd (in rec and in liq) v Perpetual Trust Ltd, where the High Court held thatthe applicant for joinder must demonstrate that its legal rights in relation to the subject20 Seales v Attorney-General [2015] NZHC 828 at [66]–[73].matter of the proceeding are directly affected.21 It argues that the Decision underappeal relates only to the 2007 Objections in respect of two rating units in issue as atSeptember 2007, and that Bunnings and Wellington Airport had no direct interest inthose properties at the relevant time. Because they have no direct rights in the subjectmatter of the appeal, Rongotai Investments opposes their joinder.[38] Mr Scragg contends that in addition to having no direct interest in the twoproperties in 2007, and consistent with the authorities, a person is not allowed tointervene in a proceeding simply because they are party to another proceeding in whichthe same legal issues arise.22 In Taylor v Key, two applicants sought to be joined to anelectoral petition on the basis that the issues in that petition arose in another petitionto which they were a party, as well as a third proceeding to which one of the applicantswas a party. In declining the application, the Court placed weight on the fact that theapplicants would not be prevented from arguing in different proceedings for a differentoutcome.23Discussion[39] In Seales v Attorney-General, this Court established principles with which toconsider applications by interested parties to intervene, particularly where theproceeding involved issues of general and wide public importance.24 As Collins Jnoted, leave to intervene may be granted when the Court is satisfied that it would beassisted by the intervener, or where the proceedings are likely to result in thedevelopment of the law.25[40] However, I consider the facts and issues in this case differ markedly to Seales.The parties have commercial and financial interests in the outcome of the Tribunal'sdecision. Further, here there is a statutory right conferred on any person affected by aTribunal's order to appeal to this Court under s 26 of the Land Valuation ProceedingsAct.21 Capital and Merchant Finance Ltd (in rec & in liq) v Perpetual Trust Ltd [2014] NZHC 3205,[2015] NZAR 228, at [41].22 Taylor v Key [2014] NZHC 3306, [2015] NZAR 730.23 At [13].24 Seales v Attorney-General, above n 20, at [41]–[48].25 At [46]–[48].[41] Both of the non-parties to the 2007 Objections proceedings have beenparticipants in the 2012 Objections hearings and intend to be participants in the nexttwo hearings. Although Wellington Airport's interests are aligned with the interests ofCash Flow and 2468 Ltd, it wishes to protect its interests, particularly in light of theTribunal's valuation exercise it undertook in reaching the five per cent adjustment, thesubject of the 2007 Objections appeals.[42] I am satisfied that Wellington Airport's interests satisfy the provision unders 26 of the Land Valuation Proceedings Act that it is a person affected by the Tribunal'sorder and so has a right of appeal, as it is seeking leave to exercise. In addition, it hasa legal, commercial and financial interest in the outcome of the Tribunal's valuationexercise for the 2012, 2015 and 2018 Objections hearings. If the Tribunal takes thesame view as it did for the 2007 Objections, Wellington Airport's interests are directlyaffected. I therefore grant Wellington Airport's application for leave to cross-appeal.[43] Turning, then, to Bunnings' application for joinder to the appeal proceedings,I see little difference between Bunnings and Wellington Airport. Bunnings submitsthat its legal rights will be directly affected by the outcome of the legal question raisedin the appeal, and further, it wishes to advance an argument not presently advanced byany other party.[44] I consider Bunnings' position satisfies the test in Capital and MerchantFinance Ltd v Perpetual Trust Ltd, particularly as Bunnings cannot rely on one of theparties to protect its rights and obligations.26 In addition, although this was not arguedbefore me, in the same way that Wellington Airport is a party affected under s 26 ofthe Land Valuation Proceedings Act, I consider Bunnings satisfies the requirements ofs 26 and has the right to appeal to the Court from the Decision. Bunnings' applicationfor joinder is therefore granted.[45] The overriding consideration in granting both Wellington Airport's leave tocross-appeal and Bunnings' application for joinder is the fact that all parties before theCourt on these interlocutory applications are involved in the other three hearings26 Capital and Merchant Finance Ltd, above n 21, at [41].before the Tribunal.27 As I noted in declining Rongotai Investments' application for aseparate hearing on the legal issue, the future hearings will be held in a relatively shortspace of time, involving the same parties, the same experts, the same Tribunal's panel,with a right at the conclusion of all hearings for the parties to appeal the Tribunal'sdecisions. This will include the Tribunal's approach to s 21 and its valuation exercise.It is therefore logical that both Wellington Airport and Bunnings are involved in thisappeal proceeding.Result[46] The application for the determination of a separate question and expeditedhearing is declined.[47] Wellington Airport is granted leave to cross-appeal out of time a decision ofthe Land Valuation Tribunal at Wellington dated 19 July 2019.[48] Bunnings is joined as a party to these appeal proceedings CIV-2019-485-430.[49] No orders are made to limit the participation of Bunnings and WellingtonAirport in these appeal proceedings. Such orders, if appropriate, should be made bythe Judge hearing the appeal.Costs[50] Counsel are to confer on the issue of costs. If it is helpful to the parties, 2Bcosts seem to be appropriate. In the event that counsel cannot agree, counsel are tofile memoranda within 10 working days of this decision.Cull JSolicitors:Duncan Cotterill, Wellington for AppellantLane Neave, Christchurch for Third Respondents27 I record at [34] that Bunnings is not a party in the 2018 Objections hearing, but has applied to bejoined to the proceedings. Although this has yet to be determined, it does not affect my analysis.