Fullers Bay of Islands Ltd and Anor v Otehei Bay Holdings Ltd and Ors Hc Ak

• Jurisdiction: New Zealand
• Judge: Williams J.
• Judgment Date: 24 September 2010
• Neutral Citation: [2010] NZHC 1735
• Docket Number: CIV-2009-404-7207
• Court: High Court
• Date: 24 September 2010

UNDER the Judicature Amendment Act 1972

IN THE MATTER OF a decision to renew a lease

Between

Fullers Bay Of Islands Limited

First Plaintiff

and

Intercity Group (NZ) Limited

Second Plaintiff

And

Otehei Bay Holdings Limited

First Defendant

And

Explore NZ (2004) Limited

Second Defendant

And

Minister Of Conservation

Third Defendant

[2010] NZHC 1735

CIV-2009-404-7207

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

Application for further interim orders — parties ran competing tourism businesses in the Bay of Islands — after defended hearing the applicant obtained orders that respondents' lease on Urupukapuka Island was unlawful — interim injunction granted that respondent could not deny applicant reasonable access across leased land — decision appealed — pending appeal, respondent would not allow the applicant's customers use of the facilities on the leased land — whether interim orders under r12 Court of Appeal (Civil) Rules (stay of proceedings and execution) were appropriate.

Counsel:

J D McBride and S R Holden for Plaintiffs

C N Whata and D J Minhinnick for First and Second Defendants B H Arthur and J. Somers for Third Defendant

• A. (1) The plaintiffs are entitled to a declaration that they, their employees and passengers as members of the public are entitled to access and use the jetty at Otehei Bay, Urupukapuka, on a reasonable basis – that is to say in a way which does not unreasonably impede Otehei's access — and not be debarred from so doing other than on payment of a fee prescribed by the Far North District Council or when extraordinary circumstances render such access and use unsafe; and

  (2) The plaintiffs would appear to be entitled to refund of the “notional landing fee” imposed by Heath J at an earlier stage of this case.

  (3) Leave is reserved to the parties to apply if those orders do not accurately define the parties' legal rights.

• B (1) The Crown and the respective lessees of DP19679 are declared to have been acting unlawfully since 1 October 1996 because the successive leases between them of that land constituted an “activity” within the meaning of the Conservation Amendment Act 1996 which applied to that land pursuant to s 59A of the Reserves Act 1977, such “activity” was in a “conservation area” and was not authorised by a concession under Part 3B of the Conservation Act.

  (2) All other relief sought – whether that the leases after 1 October 1996 should be removed from the Land Transfer title, and whether Otehei should be directed to apply for a concession to operate its “activity” over the land in DP19679 — are not granted because the result of any concession application Otehei may decide to bring for its “activity” over the land in DP19679 and the terms of any concession which may be granted cannot be known.

• C (1) The plaintiffs are entitled to an order making permanent the interim injunction debarring the first and second respondents from printing, disseminating or distributing any brochure or information – printed or electronic — which uses the words “exclusive”, “private”, “island”, “resort” or “stop” in juxtaposition to each other.

  (2) Leave is reserved to the parties to apply if those orders do not accurately define the parties' legal rights.

• D Costs are to be fixed as provided in para [207]

RESERVED JUDGMENT OF HUGH Williams J.

TABLE OF CONTENTS

	Paragraph
Introduction	[1]
Procedural	[9]
Brief History:
1. Lease	[10]
2. Wharf	[25]
First Dispute: Seaward of mean high water mark or mean high water springs:
1. Lease boundary	[32]
2. Claims/Submissions and Statutory Provisions	[33]
3. Discussion	[53]
4. Result on the first dispute	[77]
Second Dispute: Is the lease of the 4.8233 hectares unlawful?
1. Pleadings	[78]
2. Facts	[86]
3. Submissions and Statutory Provisions	[87]
4. Discussion	[140]
5. Result on the second dispute	[175]
Third Dispute: Misleading or deceptive conduct?
1. Pleadings	[176]
2. Submissions	[178]
3. Discussion	[182]
4. Result on the third dispute	[206]
Costs	[207]

Introduction

1 Part judicial review and part ordinary proceeding, this claim principally deals with access between commercial competitors to Urupukapuka Island in the Bay of Islands. Secondarily, it deals with what the plaintiffs (collectively called “Fullers” unless there is a need to differentiate between them) 1 say is deceptive or misleading advertising relating to Urupukapuka issued by the first and second defendants (collectively “Otehei” unless there is a need to differentiate). 2 The third defendant, the Minister of Conservation, is not party to the advertising issue.

2 Urupukapuka is the largest island in the Bay of Islands, lying close to its southern shore. Otehei Bay is in its south-western quadrant. A map of Urupukapuka is attached as Annexure A. 3 It outlines the lease of 4.8233ha of DP19679, of which Otehei is lessee and on which it runs a resort. 4 That lease is in contention in thes proceedings. Apart from the leased land (and small residual privately-owned parcels) the island is administered by the Department of Conservation (“DoC”) and includes three camping grounds, walking tracks, beaches, archeological sites and views of the rest of the Bay of Islands.

3 The wharf in Otehei Bay, which is also very much in contention in these proceedings, is towards the south-eastern lease boundary. Although it is possible to access Urupukapuka by other means – beach landings, private jetties and the like – it is by far the principal point of access to the island.

4 In Fullers' first cause of action it seeks a declaration that the plaintiffs are entitled to access and use the wharf in Otehei Bay and that they, their agents and passengers are entitled to access and use that part of Urupukapuka leased to Otehei and an order restraining Otehei from denying Fullers and the same persons access to the wharf and the leased part of Urupukapuka, whether physically or by imposition

of a fee. That relief was broadened in Fullers' submissions to include declarations that the 2006 renewal of Otehei's lease was unlawful, invalid and of no effect; its registration on the title was wrongfully obtained so the Registrar-General of Land should cancel that registration; and Otehei's resort operations are therefore unlawful and unauthorised. Fullers sought a direction that the Minister be required to comply with Part 3B of the Conservation Act 1987 in considering any Otehei application for a concession for its resort

5 Otehei disputes Fullers' entitlement to any of those orders and counter-claimed for a declaration they could charge a fee for Fullers' commercial use of the wharf by way of the latter accounting for any profit derived from such use.

6 The Minister supports Otehei's stance, though on different grounds.

7 Fullers originally also sought an order pursuant to s 43(2)(d) of the Fair Trading Act 1986 or an enquiry into damages requiring Explore NZ to pay damages it had sustained as a result of what Fullers claims is Explore NZ's misleading or deceptive advertising, but Mr McBride, leading counsel for the plaintiffs, abandoned that claim at the hearing and confined Fullers' claim under this cause of action to continuation of an injunction restraining Otehei from making representations in Otehei's advertising brochure or other material that the respondents could offer the public an “exclusive private island resort”, or “stop” (or similar wording) to Otehei's resort on Urupukapuka.

8 As mentioned elsewhere, this litigation grew out of an impasse between Fullers and Otehei over access by Fullers, a commercial competitor of Otehei, to the Otehei Bay wharf and the land leased to Otehei. However, Fullers' approach was not that usually found in competition law cases but to conduct a rigorous examination of every facet of Otehei's legal position. This judgment – in fact, as will be seen, effectively three separate judgments – therefore examines those legal issues in detail and says little about the many other issues raised by deponents including wharf safety, bio-security and sewerage concerns arising from significant increase in visitor numbers, timetable clashes and profitability and funding difficulties which may arise depending on the outcome.

Procedural

9 Prior to the hearing, the parties issued notices to cross-examine some of the many who swore affidavits in the proceeding and a further application for an order “facilitating inspection” by way of discovery of e-mail communications between DoC and Mr Goodfellow, director of Otehei and managing director of Explore NZ, concerning variations in the Otehei lease. But ultimately those applications were resolved in the sense that the e-mails were produced without cross-examination or order and the interlocutory matters proceeded on the basis that all the material could be considered by the court in the light of counsel's submissions and such use as appeared appropriate made of them. 5

Brief History:

1. Lease

10 A helpful affidavit by a Mr Rowan, an officer retired from DoC and one with extensive knowledge of Urupukapuka's history, said Otehei Bay became well known as the base for the American author and deep sea fisherman Zane Grey who set up camp there in 1927.

11 Mr Rowan said the original lease in 1927 of the 4.8233ha was to facilitate development of a deep sea fishing lodge and was a lease from the then owner, the Bakers, to a Mr Richardson. It was for five years from 1 October 1926, with a right of renewal for a further five year term on the same terms and conditions, thus effectively conferring perpetual rights of...