Aztek Ltd v The Attorney-General

• Jurisdiction: New Zealand
• Judge: Cooper J
• Judgment Date: 24 June 2020
• Neutral Citation: [2020] NZCA 249
• Court: Court of Appeal
• Docket Number: CA482/2018
• Date: 24 June 2020

Between

Aztek Limited

First Appellant

Tresta May Prujean

Second Appellant

and

The Attorney-General

Respondent

[2020] NZCA 249

Court:

French, Miller and Cooper JJ

CA482/2018

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

Property, Statutory Interpretation — appeal against a High Court decision which held that the Crown was not obligated to offer land back pursuant to Public Works Act 1981 as the appellant had been removed from the registrar of companies — land was originally acquired for roading purposes — whether the land should have been offered back to the former director and shareholder — whether the Crown was obliged to consider whether there were persons who might wish to have the company reinstated — whether the land should have been offered back once the company was restored to the register

Counsel:

M E Casey QC and A J Casey for Appellants

J R Burns for Respondent

• A The appeal is allowed.

• B The Chief Executive's decision of 21 February 2011 to exempt the land from the requirement to offer back under s 40 of the Public Works Act 1981 is set aside and is to be reconsidered in accordance with this judgment.

• C The appellants are entitled to costs calculated for a standard appeal on a band A basis together with usual disbursements. We certify for second counsel.

JUDGMENT OF THE COURT

REASONS OF THE COURT

(Given by Cooper J)

Table of Contents

	Para No
Introduction	[1]
Background	[6]
The High Court judgment	[19]
Appellants' argument	[27]
Respondent's argument	[35]
Analysis	[45]
Statutory purpose	[46]
The text	[54]
Discretion	[86]
Relief	[110]
Result	[114]

Introduction

1 This case concerns the proper interpretation and application of s 40 of the Public Works Act 1981 (the Act) in circumstances where:

• (a) at the time of a determination that land was no longer required for a public work, the company from which the land had been acquired had ceased to exist because it was no longer on the register of companies; and

• (b) the company was able to be restored to the register.

2 Because of its central importance to the judgment, we set out s 40 of the Act at the outset. It provides as follows:

40 Disposal to former owner of land not required for public work

• (1) Where any land held under this or any other Act or in any other manner for any public work—

  • (a) is no longer required for that public work; and

  • (b) is not required for any other public work; and

  • (c) is not required for any exchange under section 105—

    the chief executive of the department within the meaning of section 2 of the Survey Act 1986 or local authority, as the case may be, shall endeavour to sell the land in accordance with subsection (2), if that subsection is applicable to that land.

• (2) Except as provided in subsection (4), the chief executive of the department within the meaning of section 2 of the Survey Act 1986 or local authority, unless—

  • (a) he or it considers that it would be impracticable, unreasonable, or unfair to do so; or

  • (b) there has been a significant change in the character of the land for the purposes of, or in connection with, the public work for which it was acquired or is held—

    shall offer to sell the land by private contract to the person from whom it was acquired or to the successor of that person—

  • (c) at the current market value of the land as determined by a valuation carried out by a registered valuer; or

  • (d) if the chief executive of the department within the meaning of section 2 of the Survey Act 1986 or local authority considers it reasonable to do so, at any lesser price.

• (2A) If the chief executive of the department within the meaning of section 2 of the Survey Act 1986 or local authority and the offeree are unable to agree on a price following an offer made under subsection (2), the parties may agree that the price be determined by the Land Valuation Tribunal.

• (3) Subsection (2) shall not apply to land acquired after 31 January 1982 and before the date of commencement of the Public Works Amendment Act (No 2) 1987 for a public work that was not an essential work.

• (4) Where the chief executive of the department within the meaning of section 2 of the Survey Act 1986 or local authority believes on reasonable grounds that, because of the size, shape, or situation of the land he or it could not expect to sell the land to any person who did not own land adjacent to the land to be sold, the land may be sold to an owner of adjacent land at a price negotiated between the parties.

• (5) For the purposes of this section, the term successor, in relation to any person, means the person who would have been entitled to the land under the will or intestacy of that person had he owned the land at the date of his death; and, in any case where part of a person's land was acquired or taken, includes the successor in title of that person.

3 The Crown acquired land described as Lot 13 DP202643 and Lot 5 DP334605 (the land) from Aztek Ltd (Aztek) for the purposes of intended roading works under an agreement dated 29 August 2005. 1 Aztek ceased to exist on 31 March 2009 when it was removed from the register of companies as a result of a failure to file annual returns. 2 Subsequently, on 3 November 2010 the New Zealand Transport Agency (NZTA) determined that the land was no longer required by it.

4 On 21 February 2011 a delegate of the Chief Executive of Land Information New Zealand (LINZ), Mr Terry Knowles, accepted a recommendation in a report prepared by Mr David Manson, a senior property consultant employed by The Property Group, that the land “be exempted from offer back to the Former Owners or their successors pursuant to Section 40(2)(a) of [the Act]”. 3 The basis of the recommendation was encapsulated in the following passage in the report, alongside a reference to s 40(2)(a) of the Act:

The former owner was Aztek Limited. The company is struck off as shown by the attached company search. The company search also verifies that no change of name or amalgamation of company has been recorded. It is therefore impractical to offer the land back as there is no one to offer the land to.

We consider that there is sufficient justification to recommend exemption from offer back on the grounds of impractical in terms of Section 40(2)(b) of the PWA.

5 Aztek was restored to the companies register on 21 August 2015. The appellants challenged the Chief Executive's decision that it was impractical to offer the land back in a proceeding commenced in the High Court in November 2016. They sought declarations that the respondent should offer to sell the land to Aztek and that the offer should be at the market value of the land as at the date of the determination that it was not required for the roading work. They were unsuccessful in the High Court, and now appeal. 4

Background

6 The properties which are the subject of this proceeding are located in Waterview, Auckland, between Great North Road and Oakley Creek. They are part of a larger area acquired by Ms Prujean (one of the appellants) and her partner Mr Cull in the 1990s. They obtained resource consent for the land to be subdivided and developed for residential purposes.

7 A staged development was envisaged. After the first stage had been completed, the development got into financial difficulties and the remaining land was the subject of a mortgagee sale in 2001. Ms Prujean and Mr Cull were then able to buy back much of the land and proceed with its development. Aztek was formed as the corporate entity by which the land would be owned and developed. After the on-sale of part of the land to help fund the project, three of the remaining properties were developed. In addition, some works were undertaken towards the development of the five remaining lots and an access road.

8 NZTA (at the time known as Transit New Zealand) was in the early stages of planning for what has since become the State Highway 20 Extension which links to the North-Western Motorway through the Waterview Tunnel (the Avondale Extension). 5 However, there was uncertainty as to the route that the Avondale Extension would follow. Given that uncertainty, the appellants contacted NZTA asking it to consider possible acquisition of the land in November 2003.

9 After some negotiation, an agreement was signed on 29 August 2005 (the Agreement). It took the form of an offer by Aztek to sell the land to the Crown for use in connection with the Avondale Extension. The Crown became bound to purchase the land when the Agreement was signed by an authorised agent for the Crown acting under delegated authority from the Chief Executive of LINZ pursuant to s 41 of the State Sector Act 1988.

10 Ms Prujean and Mr Cull moved to Australia in 2008. The land had been Aztek's main asset. As the company no longer had any interest in the land, they ceased filing annual returns. Aztek was removed from the companies register on 31 March 2009.

11 After that point, Mr Cull observed the property from time to time on occasional visits back to New Zealand. He thought it appeared to be in use in relation to the Avondale Extension, referring to piezometers that had been installed on it and there being nothing to indicate that the land was no longer required. However, he monitored progress by looking at news websites, especially that of the New Zealand Herald. In 2015 he read that tunnelling had been completed and made inquiries as a result of which solicitors acting for Aztek and Ms Prujean wrote to The Property Group, which had acted on behalf of NZTA at the time the land was acquired. The letter, dated 8 July 2015, was in the following terms:

Dear James

Aztek Limited and Tresta Prujean — Probable Offerback Waterview Subdivision

We write to advise you we are acting on behalf of Tresta Prujean, whose company entered into a...