Lambton Quay Properties Nominee Ltd v The Wellington City Council

JurisdictionNew Zealand
JudgeJudge C J Thompson,K A Edmonds,D Kernohan
Judgment Date30 August 2013
Neutral Citation[2013] NZEnvC 238
CourtEnvironment Court
Date30 August 2013

In The Matter of an appeal under s120 of the Resource Management Act 1991

Between
Lambton Quay Properties Nominee Limited
Appellant
and
The Wellington City Council
Respondent

Decision No: [2013] NZEnvC238

Court:

Environment Judge C J Thompson

Environment Commissioner K A Edmonds

Deputy Environment Commissioner D Kernohan

BEFORE THE ENVIRONMENT COURT

Appeal under s120 Resource Management Act 1991 (“RMA”) (right to appeal) from a decision by Commissioners appointed by the respondent which declined an application by the appellant for a restricted discretionary resource consent to completely demolish the Harcourts Building on Lambton Quay — building classified as Category 1 under the Historic Places Act 1993 — appellant argued the building could not be strengthened for office/retail uses at a commercially viable cost — whether demolition was in line with relevant planning documents under s104(1)(b) RMA (consideration of applications) — what effects demolition would have on the environment under s104(1)(a) RMA (actual and potential effects on the environment of allowing the activity) — whether there would be a “precedent affect” in allowing the demolition.

Counsel/Representative:

C Anastasiou for Lambton Quay Properties Nominee Ltd

R M Devine & K M Krumdiek for NZ Historic Places Trust — s274 party

A E Smith for Wellington Civic Trust — s274 party

S F Quinn for the Wellington City Council

DECISION ON APPEAL

Decision issued: 07 OCT 2013

The appeal is declined and the Council's decision is confirmed Costs are reserved

Introduction
1

In a decision given on 25 February 2013, Commissioners appointed by the Wellington City Council declined an application by Lambton Quay Properties Nominee Limited for a restricted discretionary resource consent to completely demolish the building at 203–213 Lambton Quay and 30 Grey Street, Wellington. This is an appeal against that decision.

2

There is no formal application before the Council or the Court for a resource consent for a replacement building on the site. In an earlier decision ( Lambton Quay Properties Nominee Ltd v Wellington City Council [2013] NZEnvC 147) the Court expressed the view that such an application was not necessary to enable it to adequately evaluate the merits of the application to totally demolish the existing building. The broadly expressed intentions of the appellant for the site are noted later in this decision.

Background
3

The building in question, now known as the Harcourts Building is, as its address suggests, situated on the corner of Lambton Quay and Grey Street in the central city. It is an eight level office and retail building with a partial basement and a penthouse. It was originally constructed in cl928 for the Australian Temperance and General Mutual Life Assurance Society (T&G) as its New Zealand Head Office. Its structure is formed from a three-dimensional steel frame encased in concrete with reinforced concrete floor slabs. There are reinforced concrete walls around the lift shaft, the stair core and a single wall adjacent to the main stair in the centre of the building. The facades along Lambton Quay and Grey Street are a combination of concrete encasement of the steel columns and beams with areas of unreinforced brick masonry infill.

4

The building is on the eastern side of Lambton Quay, on land reclaimed from the harbour in the late 1850s. Its site area is 978m 2, although that is now subject to some encroachment by the neighbouring and much more recent (c2002) HSBC Tower which is presently in common ownership with the subject building (although they are on separate titles and we do not know if the encroachment has been formalised). The lifts and stairwell for the HSBC Tower were placed in what had until then been the north-facing lightwell of the building, meaning that the windows formerly facing into the lightwell had then to be infilled. Part of the HSBC Tower structure actually overhangs the roof of the building.

5

The T&G Building was registered with a ‘C’ classification under s35 of the Historic Places Act 1980 on 1 October 1982. In August 1989, the building's registration was upgraded by the New Zealand Historic Places Trust (NZHPT) to a ‘B’ classification. This classification was appealed to the High Court by the then owners. The appeal was declined on 7 September 1992, with the High Court reportedly noting the building to be … of very great architectural quality. The building was listed in the heritage schedule of the Proposed Wellington City District Plan in 1994. It is now classified as Category 1 under the Historic Places Act 1993. It became known as the Harcourts Building when, soon after the original Harcourts Building at 195–197 Lambton Quay was demolished in 1990, it was occupied by the Harcourts Real Estate company.

6

Mr Mark Dunajtschik, who is the sole shareholder and Director of the appellant company, first became involved in the ownership of the building and the adjoining HSBC Tower as a minority shareholder in the late 1990s. Mr Dunajtschik stated that at that time (1998/99) he was … not aware that the Harcourts building was registered and listed as a heritage building… and that it was not until … around 2007 when I first got the notice… that he says he learned of its heritage status.

7

Between 2002 and 2011 Mr Dunajtschik acquired the remaining interests in the HSBC Tower and the Harcourts Building, and the appellant company is now the sole owner of both properties.

8

Mr Grant Corleison is a qualified valuer and is a business associate of Mr Dunajtschik. Although he has no proprietorial interest in the building, he has been a tenant of it for many years and has been involved in many of the negotiations and proposals about it, and was also involved in the development of the HSBC Tower.

9

Mr Corleison makes it clear that the development of the HSBC Tower did not involve the transfer of any formal development rights under the RMA, or plot ratio under the former District Plan, from the site of the Harcourts Building. We note that the application for the resource consent to enable the construction of the HSBC Tower, granted on a non-notified basis in May 1999, contained a commitment to refurbish the Harcourts Building, and the consent contained such a condition. Mr Corleison advises that over the course of the next year or so, some $4.5M was spent in re-plumbing, rewiring, the removal of unreinforced brick internal partitions, and the redecoration of its interior and exterior.

The parties' positions
10

The appellant seeks a resource consent to enable demolition of the building, taking the view that in its present state it is unlettable, uninsurable, and a financial millstone around its owner's neck. It argues that all reasonable alternatives to demolition have been explored, and justifiably discarded, as being commercially unsustainable.

11

The appellant makes an argument that draws upon an analogy with s85 RMA (which does not apply to resource consent issues). It says, in summary, that it cannot make reasonable use of the property as it is, because it is seen as dangerous and it cannot be let. The building, it says, cannot be strengthened for office/retail, nor strengthened and adapted for other uses, at a commercially viable cost. For those reasons, it says that it should be allowed to demolish it and build a robust, efficient and viable replacement on the site.

12

As a possible offset to, or compensation for, the demolition of this building, Mr Dunajtschik has suggested that the appellant might make a substantial donation towards the seismic strengthening of St Gerard's Monastery in Oriental Bay, or perhaps some of the heritage buildings along Cuba Street. There was no formal undertaking or commitment, perhaps by way of a proposed consent condition, presented to us that could be reflected in an Augier condition. Given the overall view we have come to, we have not taken that possibility further.

13

There was also a suggestion that, again as a form of offset, the building might be memorialised by way of a scale model to be installed in a prominent place in any replacement building. Again, given our overall view, we have not taken that further either.

14

The NZHPT opposes demolition, arguing that experience with other broadly comparable buildings has shown that strengthening and refurbishment can produce a safe and commercially viable asset, and that every effort should be made to avoid the loss of the heritage values that the building undoubtedly has. It has not found Mr Dunajtschik's suggestion of an offset donation towards heritage retention elsewhere an attractive one. There are possibilities though that, admittedly as a second-best option, some form of facade retention might be acceptable to it. The Trust was clear though that only a retention of the existing facades would be looked at:—the replacement of them with a polystyrene and plywood replica would be an anathema. The Trust's management had the view that negotiation towards some acceptable resolution was not feasible because the appellant was not willing to accept anything short of complete demolition.

15

Ms Ann Neill, the General Manager of Central Region for the NZHPT, said that approval for demolition should at minimum be conditional that significant fabric of the Harcourts Building, facade and significant spaces are retained, accepting that it is simply the exterior which is listed in the District Plan and no internal spaces. She referred to streetscape and street frontages and large portions of the building, sufficient to keep the authenticity of the building, and did not like the word facade as this term means different things to different people. She gave the example of the Oxley Hotel in Picton where, as part of a negotiated outcome, the main front of the building was kept, the veranda was reinstated, and a sympathetic setback of the upper storey building provided, retaining the heritage features at...

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