THE NEW ZEALAND DEMOCRATIC PARTY FOR SOCIAL CREDIT INC v THE MINISTER FOR LAND INFORMATION [2020] NZHC 2816

THE NEW ZEALAND DEMOCRATIC PARTY FOR SOCIAL CREDIT INC v THE MINISTER FOR LANDINFORMATION [2020] NZHC 2816 [28 October 2020]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2019-485-563[2020] NZHC 2816UNDER the Judicial Review Procedure Act 2016 andPart 30 of the High Court Rules 2016BETWEEN THE NEW ZEALAND DEMOCRATICPARTY FOR SOCIAL CREDITINCORPORATEDApplicantAND THE MINISTER FOR LANDINFORMATIONFirst RespondentTHE MINISTER OF FINANCESecond RespondentWESTLAND DAIRY COMPANYLIMITEDThird RespondentHONG KONG JINGANG TRADEHOLDING COMPANY LIMITEDFourth RespondentHearing: 14-15 September 2020Counsel: R A Kirkness and S W H Fletcher for applicantN C Anderson and S J Jensen for first and second respondentsS V McKechnie, J C Dickson and H S Cunningham for third andfourth respondentsJudgment: 28 October 2020RESERVED JUDGMENT OF DOBSON JContentsIntroduction [1]The respondents [4]The circumstances of the transaction [7]The application and its approval [13]Grounds for review [27]The statutory definitions [30]The nature of the land use [51]First ground: error of law in interpretation adopted of "sensitive land" [59]Third ground: decision ultra vires because it was non-delegable [62]Second ground: inadequate assessment of land type [64]Fourth ground: decision made on insufficient information [72]Result [82]Costs [84]Introduction[1] The applicant (Social Credit) is a minor New Zealand political party, thepolicies of which include opposition to overseas ownership of any significantNew Zealand assets. Social Credit has brought this application for judicial review tochallenge the lawfulness of the decision by a delegated decision-maker in the OverseasInvestment Office (the OIO) to grant approval to an overseas purchaser for theacquisition of all the shares in a former co-operative, Westland Dairy CompanyLimited (Westland). The statement of claim sought a declaration that the decision wasunlawful and invalid, and an order that it be quashed.1[2] Social Credit contends that the decision-maker adopted the wrong test as to thecharacter of two sites owned by Westland – one in Hokitika and one in Rolleston, nearChristchurch – that are used for processing, manufacturing and warehousing ofprocessed products. Under the Overseas Investment Act 2005 (the Act), theacquisition of sensitive land by overseas persons must pass the so-called "benefit toNew Zealand" test in ss 16A and 17 of the Act. If the sensitive land is farm land, thebenefit to New Zealand must be substantial and identifiable. The Hokitika and1 In submissions, relief was proposed on somewhat more refined terms.Rolleston sites were treated as not comprising sensitive land, for the purposes of theassessment of the purchase transaction.[3] In essence, Social Credit argues that the sites, both of which are in urban areasand are zoned for planning purposes as commercial/industrial, should be classified asfarm land for the purposes of the Act because the receipt, processing and subsequentmanufacture of milk products constitute agricultural processes.The respondents[4] The first and second respondents (the Ministers) have statutory responsibilityfor decisions made under the Act, subject to delegating some categories of decision oncertain statutory criteria. The decision relevant to this proceeding was made by asenior officer in the OIO, as delegate of the Ministers. The OIO receives applicationsfor consent to transactions regulated by the Act and provides the personnel to assessapplications and make recommendations on them.[5] Westland, the third respondent, operated as a co-operative dairy company from1937 until the transaction to which this proceeding relates, which resulted in it ceasingto operate as a co-operative from 1 August 2019. Westland currently takes milk fromapproximately 429 farmers who are unusually widely spread from Karamea in thenorth to Haast in the south of the West Coast, as well as some suppliers in theCanterbury region. Westland employs 643 full-time staff, 15 part-time staff and fivecasuals, and is said to be the largest private employer on the West Coast and the secondlargest overall after only the District Health Board.[6] The fourth respondent (Jingang) has acquired Westland. Jingang is a companyincorporated in Hong Kong. It is a wholly owned subsidiary of Yili Group, which isdescribed as a market leading dairy products producer in China and globally. Itmarkets over 1,000 brands and owns more than 130 branches and subsidiariesworldwide. In its 2018 financial year, Yili Group generated approximatelyNZ$17 billion in gross revenue, with approximately NZ$1.5 billion in net profit.The circumstances of the transaction[7] The prospect of the sale of Westland's business to Chinese interests provokeda sharp division of views among supplier shareholders. A small sample of those whosupported the transaction completed affidavits for Westland, explaining the reasonsfor what they saw as the necessity for completing the transaction and describing thevery substantial prejudice they foresaw if the outcome of Social Credit's proceedingwas a requirement for the transaction to be undone.2[8] Social Credit filed affidavits from a milk supplier who was disappointed at thedecision to sell and voted against the scheme, and a former contractor to Westland whoalso provided reasons for opposing the transaction.3[9] For a number of years up to the point where the board of Westland consideredthe options available to it, the company had been unable to pay its suppliers acompetitive price for their milk. Given the extraordinarily wide spread of the locationof the dairy farms supplying it, it appears that collection costs would have beenmaterially higher than for Fonterra. If Westland went out of business, many of thesuppliers in more outlying areas were likely to have no market for their milk asFonterra would decline to take them on. The suppliers nearer to a sufficient base ofother farms supplying Fonterra to be attractive, or at least acceptable, to it as additionalsuppliers were having their loyalty to Westland tested, given the disparity betweenwhat Westland was paying for their milk and what they could receive from Fonterra.[10] After an assessment of alternatives, the board of Westland recommended a saleto Jingang on terms that, under a scheme of arrangement, Jingang would assumeliability for all of Westland's existing debts and pay out to the shareholders what wereseen as meaningful sums for their shares.4 The shareholders who completed affidavitsin opposition to the judicial review both explained that the proceeds of sale were usedto pay down debt and to carry out deferred maintenance on their properties. It is a2 Affidavits of Chris Volckman and Paul Stevenson.3 Affidavits of Elizabeth Dennehy and Rachel Teen.4 The offer valued the shares at a higher price than an independent valuation procured to adviseshareholders.reasonable inference that a significant proportion of shareholders would have appliedthe proceeds in similar ways.[11] An important condition of the sale was that Jingang committed to taking milkfrom all existing suppliers for a period of 10 years, and to pay them the price thatmatched what Fonterra pays its suppliers. Those commitments were seen as importantbecause, in their absence, there was a realistic prospect that dairy farms in moreisolated areas would no longer have a market for their milk.[12] Jingang's acquisition of Westland was structured as the acquisition of100 per cent of its shares by means of a scheme of arrangement under pt 15 of theCompanies Act 1993. The implementation of the scheme was conditional on approvalof Westland's shareholders and this Court making final orders under s 236 of theCompanies Act approving the scheme. Relevantly, the consent of the OIO to theacquisition by Jingang was also required.The application and its approval[13] Sections 30 and 32 of the Act provide that a Minister may delegate to theregulator (the chief executive of the relevant department) or any other person theMinister's powers or functions under the Act, with some exceptions. Under s 33, thedelegation must be in writing and contained in a ministerial directive letter.[14] A letter dated 17 October 2018 from the Ministers of Finance, Fisheries andLand Information to the acting chief executive of LINZ delegated a number of theirpowers and functions under the Act to the chief executive of LINZ. The letter statedthat the power to make decisions on applications for consent on sensitive land that wasboth subject to the benefit to New Zealand test and where the "substantial andidentifiable" criteria under s 16A(1)(b) applied, was not delegable, except in definedcircumstances that do not apply in this case.[15] However, in applications where the decision is delegable, there is still adiscretion for the Ministers to "call in" the application so that the decision is made bythem, for example if any particular concern is perceived as arising from the acquisitionof the assets in question.5[16] Mr Andrew Petersen, a solicitor with Bell Gully, contacted the OIO on10 December 2018, requesting a "vendor pre-application meeting", on behalf ofWestland. A focus of Mr Petersen's initial contact was the way in which the OIOwould deal with a number of residential sites in the vicinity of Westland's processingplant in Hokitika, and one residential property adjoining the Rolleston site. A thenrecent amendment to the Act had required that residential properties be treated assensitive land for the purposes of an OIO application,6 and Mr Petersen was interestedto understand the approach the OIO would take to the numerous residential sites thatwere included in Westland's assets. The sites had been acquired over a period of time,either to provide for expansion of the Hokitika processing plant, or as a buffer zonebetween the site and other residential areas.[17] Mr Petersen produced a number of versions of a schedule of all the landholdings owned by Westland that would pass into overseas ownership by thetransaction. Those schedules included the processing plants in Hokitika and Rollestonbut, relative to the focus on residential sites, endorsed them in both cases as "N/A –OIO consent not required". The use of the Hokitika plant was described as "mainWestland production/processing site", and the Rolleston plant as "main Rollestonproduction/warehouse facility and adjoining land".7[18] In late February 2019, Mr Petersen provided a sensitive land certificate, whichacknowledged Westland's ownership of the residential sites that were sensitive for thepurposes of the application. In a footnote to that certificate, it stated that the OIO didnot require the certificate to address land unless it is relevant land,8 as that expressionwas defined in the Act. No reference was made to the sites of the processing plants.5 Section 33(5) of the Act provides that a delegation does not prevent the delegator from exercisingthe power or function that has been delegated.6 The Overseas Investment Amendment Act 2018 came into force in October 2018. Subject tocertain exemptions, it brought residential land into the definition of "sensitive land" under the Act.7 This annotation was first endorsed on the second version of the schedule, dated 21 December2018.8 The concepts of "relevant land" and "sensitive land" (referred to in [20] below) are discussed at[30] below.[19] In early March 2019, Mr Andrew Morris, the officer at the OIO with whomMr Petersen had been dealing, confirmed a review of the updated schedule that hadbeen presented by Mr Petersen, and acknowledged that no obvious issues had arisen.[20] On 18 March 2019, the scheme of arrangement was publicly notified and on21 March 2019 Jingang applied to the OIO for consent to acquire Westland. After aninitial appraisal of the application, the OIO issued a media release on 12 April 2019stating:The benefit to New Zealand test does not apply to this application because theonly sensitive land involved is residential.[21] During May 2019, the OIO processed Jingang's application, leading to abriefing to the Ministers on 27 May 2019 providing background to the application andrequesting a decision on whether the Ministers wished to "call in" the application.That reflected the limits on the scope of the delegated decision-making power. Whereoverseas interests acquire sensitive land, including farm land, so that the benefit toNew Zealand test is required to be considered, and the "substantial and identifiable"criteria under s 16A(1)(b) apply, the application has to be determined by the Ministersand is not delegable, subject to a limited number of exceptions. Where the applicationdoes not involve those considerations, the decision on it is delegable to senior OIOpersonnel.[22] The 27 May 2019 briefing advised Ministers:9For completeness, the processing plants are not on sensitive land and do notform part of the sensitive land aspect of the application.[23] In terms of the further steps to be taken on the application, the briefingadvised:10For the reasons outlined in this briefing (ie that there is little discretion in therelevant test; and that the Office has previously considered much of therelevant information), we suggest this investment may be better suited toremaining a delegated decision.9 Briefing to the Minister for Land Information and Associate Minister for Finance, overseasinvestment application for Westland Co-operative Dairy Company Limited.10 CB 303.0794.[24] Following a meeting on 20 June 2019 between OIO personnel and the privatesecretaries of the Ministers, Mr Michael Appleyard of the OIO emailed the privatesecretaries on 21 June 2019 providing further information on the status of the landwhere the processing plants were situated. His email advised:We confirm that both the Rolleston and Hokitika plants are not sensitive landand do not require consent.Hokitika plantThe Hokitika plant is urban land and categorised commercial/industrial.These characteristics, regardless of size, do not trigger any requirement forconsent. The plant does not adjoin the river because there is an unstoppedroad that runs along the boundary. This title prevents the Hokitika plant fromadjoining that water body and is not sensitive.Rolleston plantThe Rolleston plant is urban land and also categorised commercial/ industrial.As above, these characteristics, regardless of size, do not trigger anyrequirement for consent. There are no adjoining sensitivities (such aslakebeds, conservation land, regional parks and so on). This land does nottherefore require consent.[25] In late June 2019, there were communications from the Ministers' officesstating that the Ministers wished to call in the decision, but that did not occur and, on10 July 2019, the Ministers confirmed they did not wish to call in the application. TheOIO granted the application on 16 July 2019 and the acquisition proceeded on1 August 2019.[26] This proceeding was commenced on 1 October 2019.Grounds for review[27] Social Credit advanced four grounds for review of the OIO decision, which areconveniently considered in two groups. The first ground was that the OIO wronglyclassified the land on which Westland's processing plants are located because that landis arguably used for an agricultural purpose and is therefore farm land. The thirdground, dependent on making out the first ground, is that because the land at issue isfarm land, the decision had to be made by the Ministers and the OIO acted ultra viresin making what was a non-delegable decision.[28] The second group, comprising the second and fourth grounds, pleadedrespectively that the OIO failed to consider whether the land at issue was used foragricultural purposes, and that the OIO had insufficient information before it todetermine whether the land at issue was indeed farm land.[29] The determinative issue in this judicial review is the correct definition of farmland under the Act.The statutory definitions[30] Acquisitions by overseas persons of interests in land in New Zealand are to beassessed against a more stringent test if the land is sensitive. Such land becomesrelevant land for the purposes of an application made under the Act if it is subject toacquisition by an overseas person. Within the category of sensitive land, residentialland is dealt with separately, so that the starting point in the present case is thedefinition in s 6(1) of the Act of sensitive (but not residential) land. That is defined asland that:(a) is not and does not include residential land; but(b) is sensitive under Part 1 of Schedule 1 for some other reason.[31] The categories of land listed as sensitive in that schedule include non-urbanland that exceeds five hectares in area. Non-urban land is defined in s 6 as meaning:(a) farm land; and(b) any land other than land that is both—(i) in an urban area; and(ii) used for commercial, industrial, or residential purposes[32] Section 6 defines farm land to mean:land (other than residential (but not otherwise sensitive) land) usedexclusively or principally for agricultural, horticultural, or pastoral purposes,or for the keeping of bees, poultry, or livestock[33] As discussed at [3] above, Social Credit's case rests on the proposition thatWestland's processing plants in Hokitika and Rolleston are farm land because they areused principally for agricultural purposes.[34] Mr Kirkness submitted that "agricultural" is an adjective having wider scopethan "agriculture", because it extends to describing matters that relate to, or are usedin or concerned with, agriculture. Further, that agriculture is not limited to producingcrops or keeping animals but includes the preparation and marketing of the resultingproducts. Mr Kirkness cited the Merriam-Webster dictionary for definitions consistentwith these propositions.11[35] On his argument it followed that, in the context of a dairy farming operation,"agricultural purposes" would extend to both the milking of the cows and theproduction of dairy products from their milk. He submitted that an interpretation ofthis breadth is consistent with the statutory scheme. Arguably, the purposes of the Actrequire a wide interpretation of what is caught by the concept of sensitive land so thatthe privilege of overseas persons acquiring sensitive New Zealand assets is tested inappropriately wide circumstances. The link between the production of milk and itsimmediate processing into saleable forms arguably requires all land used for bothaspects of that process to be treated as being used for agricultural purposes, andtherefore farm land, and therefore sensitive.[36] The meaning of a statute is to be ascertained from its text and in light of itspurpose, having regard to context. The classic observation on this test from s 5 of theInterpretation Act 1999 is that of the Supreme Court in Commerce Commission vFonterra Co-operative Ltd:12[22] It is necessary to bear in mind that s 5 of the Interpretation Act 1999makes text and purpose the key drivers of statutory interpretation. Themeaning of an enactment must be ascertained from its text and in the light ofits purpose. Even if the meaning of the text may appear plain in isolation ofpurpose, that meaning should always be cross checked against purpose inorder to observe the dual requirements of s 5. In determining purpose thecourt must obviously have regard to both the immediate and the generallegislative context. Of relevance too may be the social, commercial or otherobjective of the enactment.11 Merriam-Webster Dictionary: www.merriam-webster.com/dictionary/agriculture.12 Commerce Commission v Fonterra Co-operative Ltd [2007] NZSC 36 (footnotes omitted).[37] The purpose of the Act is specified in s 3 in the following terms:3 Purpose(1) The purpose of this Act is to acknowledge that it is a privilege foroverseas persons to own or control sensitive New Zealand assets by—(a) requiring overseas investments in those assets, before beingmade, to meet criteria for consent; and(b) imposing conditions on those overseas investments.(2) This Act also has the purpose of managing certain risks, such asnational security and public order risks, associated with transactionsby overseas persons.[38] For the Ministers, Mr Anderson drew on the distinction made in texts onstatutory interpretation between lexical and stipulative definitions.13 Lexicaldefinitions are those which confirm that a word or phrase is being used in the statutein its natural or ordinary meaning so that the definition confirms that usual scope andclarifies or delimits the scope of what is intended. On the other hand, a stipulativedefinition is one which requires a word or phrase to take on a special meaning for thepurpose of the statute in which it is used, so as to act as a form of code for the scopeof what is intended when it is used in the Act. This is demonstrably different to anatural and ordinary meaning.[39] Here, Mr Anderson submitted that there is no indication anywhere that thedefinition of farm land is intended to be any broader than the scope attributed to thatphrase in common usage, that is, a lexical definition. He submitted that if a stipulativedefinition extending the scope of the concept of farm land was intended by Parliament,there would have been much clearer indications of that.[40] I agree with Mr Anderson's approach to the interpretation of farm land. I amsatisfied that the definition of farm land is land used exclusively or principally for (inthe relevant context) agricultural or pastoral purposes and is intended to confirm thecommon usage of that phrase as identifying the land on which primary productionoccurs. Those working on farm land are farmers, they treat themselves at least in13 R I Carter, Burrows and Carter Statute Law in New Zealand (5th ed, LexisNexis, Wellington,2015) at 430; Diggory Bailey and Luke Norbury Bennion on Statutory interpretation (7th ed,LexisNexis, London, 2017) at 478.general terms as being paid for producing the produce that goes out the farm gate and– despite financial interests in post-farm gate processes such as being shareholders indairy co-operatives or horticultural pack house operations – their occupation orownership of farm land is tied to the capacity of their land to produce whatever it isthat goes out the farm gate.[41] As to statutory purpose, successive regimes constraining overseas ownershipof any New Zealand assets have reflected a consistent concern that New Zealandought not to lose control of the land capable of producing agricultural produce withoutclose scrutiny against strict criteria. That is the primary reason why farm land iscategorised as being sensitive. Neither the Hokitika nor Rolleston sites could be seenas valued for that purpose. It does not frustrate the statutory aim of closer scrutiny oftransactions that result in overseas persons gaining control of New Zealand'sproductive farm land if the extended definition for which Social Credit contends is notadopted.[42] The statutory purpose in s 3, and the scheme of the Act, do not suggest thatacquisitions by overseas persons should have to meet the higher threshold for consentthat applies to sensitive land more broadly than the natural and ordinary meaning ofthe definition of that concept would otherwise require in the context in which it is usedin the Act.[43] On the first reading of the Bill that became the current Act, the then Ministerof Finance, Dr Michael Cullen, described the review of the statutory regime that hadtaken place as having two purposes:14First, to ensure that New Zealand's approach to the regulation of foreigninvestment focuses on those assets that really matter to New Zealanders. Theyinclude sensitive land, fisheries, and assets with historical or culturalsignificance. Second, we wanted to ensure that potential overseas investorsdid not face unnecessary compliance costs and that foreign investment thatcan make a positive contribution to the economy and to New Zealand isencouraged.[44] In the litigation over OIO consent for sale to foreign interests of the Crafarfarms, the Court of Appeal made the following comments which put in context the14 (14 December 2004) 622 NZPD 18023.weight to be attributed to the fact that acquisition by overseas persons is "aprivilege":15[Considering the language of s 16(1)(a) of the Act which provides for thebenefit to New Zealand test] In particular, we see no reason to construethe words narrowly because overseas investment in New Zealand is describedin s 3 as a "privilege". The implications of the use of this word must beassessed against the background that the Act provides that, if the criteria aremet, the Ministers must grant consent. The Act attempts to place somecontrols on the acquisition of significant tracts of New Zealand farm land byoverseas persons, but also seeks to allow such persons to invest in farm landwhere they meet the relevant criteria. We agree with Mr Goddard that thebalance that Parliament has struck between the various interests at play isfound in the wording of the legislation and that there is no warrant to read thelanguage of s 16(1)(a) down or to qualify it in some way.[45] The higher level of protection for New Zealand ownership of farm land isreflected in an additional requirement that, before any sale to an overseas person, farmland must be offered on the open market within New Zealand.16 There would be nocompelling rationale for requiring the Hokitika and Rolleston sites to be separatelyoffered to discharge that obligation in this case. The value attributed to the sites wasless than five per cent of the total consideration involved in the acquisition, and therewould very obviously be no interest in these urban sites for use as farm land in thenatural and ordinary meaning of that activity.[46] References to the application of similarly defined terms in other statutes aregenerally of limited value given the importance of the statutory context and individualpurposes of different statutes. In this case, Mr Anderson submitted that the legislaturehas treated the concept of farm land consistently, and that in considering the OverseasInvestment Amendment Bill 1998, the Select Committee had stated that the definitionof farm land was similar to other statutory definitions of the same phrase.17[47] I would not be persuaded to alter the interpretation of farm land that wasotherwise applicable to have it conform with the interpretation in other statutorycontexts. However, the range of other statutes in which the phrase is applied to the15 Tiroa E and Te Hape B Trusts v Chief Executive of Land Information New Zealand [2012] NZCA355, [2012] 3 NZLR 808 at [40] (footnote omitted).16 Section 16(1)(f), subject to the exceptions in s 20.17 References included to Public Bodies Leases Act 1969, s 2, and in subsequently repealed statutesincluding the Rating Powers Act 1988, s 2 and the Real Estate Agents Act 1976, s 2.same concept does add additional justification for adopting what is a common senseand natural and ordinary meaning of the phrase.[48] Mr Kirkness was less than precise as to how far his preferred definition wouldextend in the context of other forms of agriculture: by parity of reasoning it wouldhave to include meat processing plants, and all forms of pack houses and otherprocessing operations for horticultural produce. As with the Hokitika and Rollestonplants in issue here, the majority of such facilities throughout New Zealand are locatedin areas that are, for all other purposes, routinely categorised as industrial orindustrial/commercial. Mr Kirkness did not resist my proposition during argumentthat all those working at the two plants in issue would be most surprised to learn thatthe statute governing acquisition of the businesses by overseas persons required thesites to be characterised as farm land. The interpretation he contends for is anunnatural one.[49] The unnatural and forced consequences of adopting the broader definitioncontended for by Social Credit confirm that an extension beyond the natural andordinary meaning of the words as used in the definition would certainly require moreby way of expanded definition than the wording used in s 6 of the Act. There is noindication that the definition of farm land was intended to be stipulative.[50] Mr Kirkness raised an inventively wide range of arguments in support of thesubstantially broader interpretation of agricultural purposes and therefore of farm landfor which he contended. I intend no disrespect by not addressing each of them inproviding individual reasons for rejection. Both singularly and cumulatively, they areunable to outweigh the compelling common sense in adopting an interpretation whichaccords with the natural and ordinary meaning of the phrase, as assessed in its statutorycontext.The nature of the land use[51] Counsel for all respondents, and particularly Ms McKechnie for Westland,took some trouble to emphasise the detail of the range of activities undertaken at boththe sites, to distinguish them from anything within the usual concepts of activities foragricultural purposes, and what occurs on farm land.[52] The Hokitika plant is within Hokitika town. The site is a little less than eighthectares and is zoned industrial/commercial under the Westland District Plan. It is inevery general sense of the word being used for industrial purposes. Within itsboundaries, there are sealed roads and parking areas and a large number of buildingswhich are used for a range of activities including pasteurising the raw milk, churningand packaging butter, manufacturing various milk powders and infant formulas, watertreatment, research and development, packaging, warehousing, administration andstorage. Facilities at the site include an industrial scale x-ray machine used to checkinfant formula for foreign substances. It is serviced by a private railway siding whichis used to send and receive goods to and from the Rolleston plant.[53] The operations at Hokitika include the use of highly dangerous chemicals usedin some of the industrial processes and to clean equipment, and include ammonia forcooling which is treated as a poisonous gas.[54] The Rolleston plant occupies nearly nine hectares and is zoned business 2A inthe Selwyn District Plan, that being designated as a commercial/industrial area. Inresource management terms it is part of a light industrial zone in Rolleston. Thebuildings on that site include a reverse osmosis plant used to reduce the water contentin raw milk, a UHT milk and cream plant, warehousing, loading areas andadministration offices. The Rolleston site does include some vacant land which is tobe used for future expansion as required.[55] Mr Kirkness disputed the relevance of land use zoning provisions applying tothe sites. First, he submitted that a zone for commercial uses was either meaningless,or could certainly not exclude farming operations, which are inherently commercial incharacter. Secondly, he took the point that zoning provisions regulated what sitescould be used for, as distinct from the use that is actually being made of them.[56] I do not accept that these points render the zoning of the sites irrelevant whendetermining whether they are farm land. In the zoning context, commercial zones tendto be used mutually exclusively with rural/agricultural uses, and commercial uses arecommonly bracketed with industrial uses, particularly to enable cohesive zoning for arange of business activities likely to extend from light industrial/manufacturing usesthrough to wholesale and potentially retail product suppliers. The fact that bothsuppliers of raw milk to Westland and the Westland processing plants are commercial,in the sense that they are business enterprises undertaken for profit, cannot distractfrom the legitimate distinction drawn between uses of farm land and uses of variousactivities in commercial/industrial zones.[57] Mr Kirkness's second point on the lack of relevance of zoning was that whatis permitted by way of land use does not dictate what is actually occurring there. Thiscannot assume relevance in advancing his argument that these commercial/industrialsites are to be treated as farm land for the purposes of the Act. He is correct on thepoint that definitions in the Act are to be applied by what is actually occurring on anygiven site, but that does not avail him in contending that these processing andmanufacturing activities should be treated as farm land for the purposes of the Act.[58] The sites are dependent for their raw material on raw milk produced from landused for agricultural purposes, and those farming activities depend vitally on theability of these sites to take and pay for their produce. However, I am satisfied thatthe use of the sites inarguably falls outside the nature of agricultural purposes as thatexpression is used in the definition of farm land.First ground: error of law in interpretation adopted of "sensitive land"[59] The first and primary ground of challenge to the decision was that the OIO hadadopted the wrong interpretation of sensitive land by failing to recognise that theWestland processing sites in Hokitika and Rolleston were used primarily foragricultural purposes, which brought them within the definition of farm land and hencesensitive land for the purposes of the application to the OIO.[60] It follows from my analysis above that I do not accept the interpretation of farmland contended for by Social Credit. I am satisfied that the OIO approached theapplication having regard to an interpretation of farm land that correctly did not extendto sites used for processing raw milk and further manufacturing and processingactivities.[61] To varying extents, each of the subsequent grounds of review depended on theinterpretation of farm land contended for by Social Credit. I turn to consider them inlight of the interpretation of farm land I have adopted, consistently with that appliedby the OIO.Third ground: decision ultra vires because it was non-delegable[62] Had Social Credit been correct in contending that the Hokitika and Rollestonsites were used for agricultural purposes, and were therefore farm land, then thedecision on Jingang's application to the OIO would have been a non-delegable onerequired to be made by the Ministers. Had Social Credit succeeded with the firstground for review, it would have followed that they also succeeded on this thirdground.[63] However, equally the failure of the first ground necessarily means that the thirdground must also be dismissed. The decision on Jingang's application was properlydelegable.Second ground: inadequate assessment of land type[64] The second ground for Social Credit's challenge was that the OIO personneldid not undertake adequate enquiries to determine the status of the land for thepurposes of the Act when considering the Jingang application. A statutory power ofdecision exercised on insufficient information may constitute a ground for judicialreview for a failure to consider relevant factors, on a material error of fact or even onunreasonableness. As Graham Taylor observes:18 inadequacy of information can be analysed as a material error of fact. Thisis considered to be a valuable approach. The absence of information may leadan authority to make a decision that is contrary to the objective facts. This canbe analysed in terms of either material error of fact, or failure to considerrelevant factors.[65] This criticism relied on the broader definition of agricultural purposescontended for in Social Credit's first ground of review. Arguably, if an evaluation of18 Graham Taylor Judicial Review: A New Zealand Perspective (4th ed, LexisNexis, Wellington,2018) at 789–790.the nature of the activity undertaken required a decision on whether the activities atthe sites were for agricultural purposes by reference to a comprehensive review of thecloseness of the connection to the processing of raw milk delivered to the sites, thenthe OIO had not undertaken sufficient enquiries to adequately inform itself in makingthat decision.[66] However, the adequacy of the factual enquiries and analysis undertaken by theOIO is to be assessed on a quite different premise if activities that were principally foragricultural purposes were confined to the natural and ordinary meaning of whatoccurred on farm land. On that more straightforward approach which I have preferred,OIO personnel could sufficiently satisfy themselves that the Hokitika and Rollestonsites did not constitute sensitive land on a far more limited assessment of the nature ofthe activities undertaken at those sites.[67] A specific aspect of the criticisms of inadequate research is the extent to whichOIO personnel relied upon the assurances of Mr Petersen, solicitor for Westland, inhis course of dealings with them. I consider that criticism separately under the fourthground of review.[68] More generally, Mr Kirkness analysed the records of the OIO's dealings withthe application to demonstrate that they had only the most superficial of informationabout the land use at the sites when the public media statement was made on 12 April2019, which recorded that the only sensitive land involved in the application were theresidential sites. The information available to the OIO at that time was allegedlylimited to Mr Petersen's opinion of the non-sensitive status of the sites, and relativelyindistinct aerial photographs showing the general layout of buildings and otherstructures on the sites but without revealing any detail as to the activities undertaken.Mr Kirkness's criticism of the OIO's assessment of the status of the land is that asubstantially more detailed analysis was required as to whether the activitiesundertaken qualified the sites as ones used principally for agricultural purposes.[69] Submissions for the Ministers made the point that the OIO also had knowledgeof the zoning of the plants and a sensitive land certificate that had been completed inaddition to the schedules Mr Petersen had provided. The OIO also had the investmentplan provided by Jingang with its application, which gave indications of the proposalto expand further manufacturing activities.[70] If the categorisation of the sites was not sufficiently clear on a superficialunderstanding of the use of those sites, then a tenable point may have arisen as to theinadequacy of information and analysis on which the decision was made. However,on the information that was available to OIO, I consider it was inarguably clear thatthe sites did not qualify as farm land, so as to obviate the need for any greater level ofenquiry or assessment by OIO.[71] The essence of this criticism by Mr Kirkness was not that they misunderstoodor mischaracterised what was occurring at the sites, but rather that they dismissed theneed for any more detailed analysis of those activities when considering thecategorisation of the land. That alleged error is because, on Social Credit's analysis,the OIO adopted the wrong interpretation of the concepts of agricultural purposes andaccordingly farm land. Once that premise for their criticism falls away, so does therelevance of the concern at the inadequacy of the analysis of what was occurring atthe sites. Consequently, this ground must also fail.Fourth ground: decision made on insufficient information[72] A primary plank of this ground of review was that OIO personnelinappropriately relied upon the information and assurances provided to them byMr Petersen. Affidavits by OIO personnel acknowledged that the course of dealingswith Mr Petersen in respect of numerous applications over a number of years led themto trust his judgement and be confident in his analysis of the aspects of any particularapplication that were likely to be contentious. In this case, Mr Petersen had, from thevery outset, treated the status of the Hokitika and Rolleston sites as entirelynon-contentious on the basis that they did not constitute farm land.[73] On 11 November 2019, and after this proceeding had been commenced, OIOpersonnel visited Westland's Rolleston milk processing plant to assess it. Whilst someof those involved were inclined to downplay it as merely taking up an opportunity tosee the site for themselves whilst otherwise in the area, Mr Kirkness pointed to internalcommunications that suggested the visit was specifically to gather information for thepurposes of defending this proceeding. A report prepared on the visit afterwards statedthat those who attended: walked away firmly of the view that the land is not "farm land"[74] However, Mr Kirkness's point is that the visit was necessary to gatherinformation which the OIO ought to have appreciated it needed before making thedecision as to the categorisation of the land. He treated the fact of the visit as strongsupport for his fourth ground that, when the challenged decision was made, the OIOhad insufficient information as to whether the sites were farm land.[75] The first of these criticisms on the insufficiency of information gathered by theOIO is one of general application, advanced on the ground that the OIO should nottrust information received from applicants, or those acting for parties to a transactionthat is subject to OIO consent. The criticism is somewhat theoretical, given my findingthat the exclusion of the processing sites from the category of farm land wasabundantly clear on the correct interpretation of that phrase, which very substantiallyreduced the scope of enquiries reasonably required by the OIO. Had the OIO beenwrong in its interpretation of farm land, then the extent of information on which itrelied in deciding that the sites were not sensitive land were likely to be held to beinadequate. However, that is not the case.[76] I took Mr Kirkness's submissions to be that even if the OIO was correct in itsinterpretation of what amounted to farm land, then it still failed to adequately informitself and those inadequacies included inappropriate reliance on Mr Petersen's views.[77] In defending the adequacy of the OIO assessment of the application,Mr Anderson cited the observations of McGechan J in a judicial review of decisionsmade on quota management for fish species.19 In that context, McGechan Jobserved:20What is "reasonable" will depend on the circumstances prevailing at the time.Matters such as time available, resources to hand, existing knowledge andexpertise, and reliability or apparent reliability of sources all can have abearing, along with all else.19 CRA3 Industry Association v Ministry of Fisheries HC Wellington CP317/99, 24 May 2000.20 At [60].[78] The appropriateness of such a regulator accepting, rather than independentlychecking, all details presented to it raises resourcing considerations, and a reflectionon the consequences of a decision having been made on inaccurate information. Therewas no detailed evidence on the responsibility assumed by applicants and theiradvisers for errors in any certificates provided by them on the character of assetsinvolved in acquisitions by an overseas person. The range of adverse consequenceswhich might flow from a decision made in reliance on incorrect information providedby an applicant might reasonably be seen as a sufficient incentive for applicants totake care that such certificates are factually accurate.21[79] It is tolerably clear that regulators such as the OIO are not resourced toindependently research all details of all applications made to them on the basis thatthey must distrust the accuracy of information provided in support of an application.Judgement calls are required and, given the lack of direct relevance of any allegedinsufficiency of the independent investigation undertaken in this case, it is not asituation in which to make any adverse finding in respect of the OIO's processes. TheOIO would be vulnerable if grounds existed for questioning the accuracy ofinformation certified as accurate on behalf of an applicant, and which the OIO oughtto have had grounds for questioning, but did not independently research. That is notthe context here.[80] I am not satisfied that any error is made out on that aspect of the OIO's processin relying on information Mr Petersen provided.[81] As to the second criticism, I accept that the November 2019 visit by OIOpersonnel was motivated to assist in the preparation of a response to the presentjudicial review challenge. However, given that the OIO had correctly applied theinterpretation of farm land, I am not persuaded that the timing of that visit can be heldagainst the OIO as a demonstration of the inadequacy of the information it previouslyhad when the decision was made. There is no suggestion that the greaterunderstanding of what occurred at the site changed either the OIO's categorisation ofthe site in determining whether it was sensitive land, or even the grounds that would21 Knowing provision of false information is an offence under s 46 of the Act.be relied on for justifying a decision that it was not. OIO personnel took theopportunity to familiarise themselves with the site in circumstances where the groundsof Social Credit's challenge raised issues that they had not previously considered itnecessary to focus on.Result[82] Accordingly, none of Social Credit's four grounds of challenge to the decisioncan be made out.[83] That outcome obviates the need to review relatively wide-ranging argumentson the forms of relief that may have been appropriate, had the grounds for review beenmade out. I heard at some length separately from Mr Fletcher about the limited formsof relief Social Credit would have sought, short of any order requiring the transactionto be reversed. That prospect was the cause of serious concern expressed both forJingang and shareholder suppliers to the company whose financial positions have beenaltered substantially by completion of the transaction and the commencement ofbusiness on new terms.Costs[84] In dismissing an application for security for costs, Clark J recognised publicinterest aspects in the proceeding.22 That character might influence the discretion oncosts. However, having heard the arguments, I am not persuaded there was a tenablebasis for asserting error by the OIO on the critical issue of the interpretation of farmland. As a political party, it can fairly be inferred that Social Credit has pursued theproceeding at least in part for political purposes. I am satisfied that costs ought tofollow the event. My provisional view is that both groups of respondents ought to beentitled to an award of costs on a 2B basis, without certifying for a second counsel.[85] If the parties are unable to settle costs issues, I will receive memoranda fromthe respondents, limited to five pages, which are to be filed within 15 working days of22 The New Zealand Democratic Party for Social Credit Inc v The Minister for Land Information[2020] NZHC 1104 at [28].delivery of the judgment. Social Credit will then have five working days in which tofile a reply of no greater length.Dobson JSolicitors:Woods Fletcher, Wellington for applicantCrown Law, Wellington for first and second respondentsSimpson Grierson, Wellington for third and fourth respondents