Choong Huat Lai and Luan Joo Tan (ENV-201O-AKL-OOO160) v Auckland Council (formerly Waitakere City Council) The Trust Community Foundanon Incorporated s274 party

 
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[2011] NZEnvC 207

BEFORE THE ENVIRONMENT COURT

Court:

Judge M Harland

Commissioner P Catchpole

Commissioner M Oliver

IN THE MATTER of the Public Works Act 1981 and objections under section 23(3) and section 24 of the Act

Between
Choong Huat Lai And Luan Joo Tan (ENV-201O-AKL-OOO160)
Objectors
and
Auckland Council (formerly Waitakere City Council)
Respondent

and

The Trust Community Foundanon Incorporated s274 party
Attendances:

M Casey QC & A Davidson for the Respondent

N D Wright for the Objectors

REPORT OF THE ENVIRONMENT COURT

TO The Auckland Council

COPIES TO Choong Huat Lai, Luan Joo The Trust Community Foundation Incorporated

TABLE OF CONTENTS

Introduction

3

Legal Framework

5

The Public Works Act

5

Section 18 argument

9

Fairness

9

Factual Background

11

The site in context

11

Context for the proposed work

11

Design charette (or workshop)

12

Proposed Plan Change 17

12

The New Lynn Transit Oriented Development Project.

13

The New Lynn Urban Regeneration Framework

13

New Lynn Urban Plan 2010

15

The Involvement of Infratil

15

Chronology of Events

16

The Council's objectives

25

The arguments

25

Overall conclusion in relation to objectives

26

Adequacy of consideration of alternatives

27

The tests to be applied

27

The arguments

29

Conclusion in relation to alternatives

31

Bad faith

34

Was the taking fair, sound and reasonably necessary for achieving the Council's objectives?

38

Is the taking fair?

38

Good faith negotiations

39

Disclosure

41

Resource consents for the proposed work

42

The 2006 consent and subsequent development

42

Conclusion in relation to fairness

43

Is the taking sound?

43

Involvement of Inftatil

44

Is the proposed taking in this case within the Council's powers?.

46

Section 40 expectations

49

Overall conclusion in relation to soundness

49

TTCF's position

49

Is the taking reasonably necessary?

52

Court's discretion

52

Conclusion

53

Introduction
1

The Auckland Council (“the Council”) as successor to Waitakere City Council, has given notice to the objectors that it wishes to acquire their commercial property at 30 Totara Avenue, New Lynn, for a public work. The objectors have objected to the acquisition. This case concerns whether the Council has followed the correct procedures under the Public Works Act 1981 (“the PWA”) for the acquisition of the objectors' land.

2

The Council contends that the public work for which the objector's land is required is an important stage in the regeneration of the New Lynn Township in West Auckland. The land is right next to the New Lynn transport interchange, which includes both bus and rail stations, and it is proposed that the objector's land will be used to construct a new building, housing three storeys of public car parking with a ground level retail development. A small section of the land is intended to be used to form part of an extended bus bay.

3

The objectors' family trust owns the commercial properties at 30 and 30A Totara Avenue New Lynn which comprise two blocks of ten retail shops. From one of the shops, the objectors operate their own business, (the Hong Kong Restaurant) and others (albeit not all of them) are tenanted to other small businesses. Between 2006 and 2008 the objectors extensively redeveloped this property into a new single storey retail building, with the existing commercial building being refurbished. In 2009 the property was subdivided into two lots, one for the new building and another for the refurbished old building, now known as 30 and 30A Totara Avenue. 1

4

Whilst more will be said of this shortly, the Court must conduct an inquiry into the objection and the intended taking 2 and in so doing is required to:

  • (a) ascertain the objectives of the Council;

  • (b) examine the adequacy the Council's consideration of alternatives; and

  • (c) decide and report on whether the taking is fair, sound and reasonably necessary to achieve the Council's objectives.

5

Although the objectors' opposition to the taking was couched in their second Notice of Objection as being in relation to the matters outlined in paragraph 4 (c) above, it was clear from the way the case was argued that they in fact challenge the stated objectives of the Council and they also contended that the Council's consideration of alternatives was inadequate.

6

Underlying the various strands of the objectors' argument was a theme that the decision to acquire the objectors' land was motivated by commercial rather than public purposes, because the Council has entered into a public/private arrangement with Infratil Properties Ltd (“Infratil”) to operate the building in which the new carpark is proposed, an arrangement from which the Council stands to profit. The inference we are asked to draw is that the Council's objectives, whilst stated to be for roading, parking and urban renewal, have a significant commercial motivation which they submit is contrary to the purpose of the taking of private land for a public work. In addition the objectors challenge that the land is being taken for urban renewal, given that the objectors' recent development of the site was recognised by the Council as being for exactly this purpose.

7

The objectors also submitted that Council officers (but particularly Mr Drake), acted in an arbitrary and capricious manner and/or bad faith when they recommended to the Council the option which resulted in the objectors' land being required and other alternatives being discounted. The Court is asked to draw the inference that the ability to profit from the Infratil joint venture improperly influenced the decision to select the option favouring the acquisition of the objectors' land over other alternatives.

8

Mr Lai and Ms Tan are supported in these proceedings by the Trusts Community Foundation Incorporated (“TTCF”). TTCF is the licensed operator of a number of gaming machines situated at 30 Totara Avenue 3. It supplies eighteen (18) gaming machines to the premises which generate in the order of $500,000 per annum (from a turnover of around $1.3m per annum). 4 The funds received are distributed by TTCF generally for charitable purposes within the local community.

9

TTCF was concerned that if the compulsory acquisition of 30 Totara Avenue proceeds, and the business currently operated at the premises was required to relocate, a new operating licence would be required with the current maximum of nine (9) gaming machines permitted. 5 This would result in a reduction in TTCF's turnover and the funds available for distribution to charities.

10

We heard evidence in this case for the objectors from Dr Francis Lai a qualified chartered surveyor (both in property valuation and quantity surveying) 6...

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