Taggart Earthmoving Ltd v Heritage New Zealand Pouhere Taonga

• Jurisdiction: New Zealand
• Judge: J E Borthwick,D J Bunting,K A Edmonds
• Judgment Date: 05 July 2016
• Neutral Citation: [2016] NZEnvC 123
• Court: Environment Court
• Docket Number: (ENV-2015-CHC-94)
• Date: 05 July 2016

In the matter of the Canterbury Earthquake (Historic Places Act) Order 2011 and of an appeal pursuant to cl 15 of the Order

Between

Taggart Earthmoving Limited

Appellant

and

Heritage New Zealand Pouhere Taonga

Respondent

Decision No. [2016] NZEnvC 123

Court:

Environment Judge J E Borthwick Environment Commissioner D J Bunting Environment Commissioner K A Edmonds

(ENV-2015-CHC-94)

BEFORE THE ENVIRONMENT COURT

Appeal against respondent's decision refusing permission for the appellant to demolish McLean's Mansion (a Category 1 Historic Place on the New Zealand Heritage List) which was extensively damaged during the Canterbury earthquakes — it was also an archaeological site, which could not be destroyed, damaged or modified without the prior authority of the respondent — the Canterbury Earthquake Recovery Authority had determined the building was dangerous and gave notice to the owners that the building needed to be demolished — the respondent believed that despite the damage caused by the earthquake, the building had retained its outstanding historical heritage values — whether “subject to” in cl 15(4)(b) Canterbury Earthquake (Heritage Places Act) Order 2011 (subject to the provisions of sections 20(4) to (6A) Historic Places Act, any appeal must be determined having regard to all of the purposes of the Canterbury Earthquake Recovery Act 2011) meant that the provisions of the Canterbury Earthquake Recovery Act 2011 (“CERA”) were subject to the Historic Places Act 1993 (“HPA”) — whether there was any inconsistency between the purposes (and principles) of the CERA and HPA — what was the relevance of the decision by the Chief Executive of the Canterbury Earthquake Recovery Authority to issue a notice stating the building was dangerous and to demolish the building under s38 CERA (works).

Appearances:

L J Semple and H G Marks for appellant

N McIndoe and F R Wedde for respondent

• A: The appeal is declined and the decision of Heritage NZ is confirmed.

• B: Costs are reserved.

DECISION OF THE ENVIRONMENT COURT

REASONS

Introduction

1 McLean's Mansion was extensively damaged during the Canterbury earthquakes.

2 The building is listed on the New Zealand Heritage List/Rarangi Korero as a Category 1 Historic Place. As it is also an archaeological site, no person may destroy, damage or modify the building without the prior authority of Heritage New Zealand Pouhere Taonga (Heritage New Zealand).

3 In July 2013 the Canterbury Earthquake Recovery Authority determined the building was dangerous and gave notice to the owners that the building needed to be demolished. It is common ground that demolition cannot occur without the requisite authorisation from Heritage New Zealand.

4 In September 2015 Taggart Earthmoving Limited, acting as agent for the building owners, applied to Heritage New Zealand for an emergency authority to demolish the building. The application was declined.

5 This decision determines Taggart's subsequent appeal against the decision of Heritage New Zealand.

Description of McLean's Mansion

6 Originally known as Holly Lea, McLean's Mansion is located at 387 Manchester Street, Christchurch and was built for Allan McLean. Born in Scotland, Mr McLean immigrated to New Zealand and made his wealth as a Canterbury run holder. He retired to Christchurch following the forced sale of his large estate at Waikakahi, near Waimate, under the Lands for Settlement Act 1894.

7 In 1899 Mr McLean commissioned an architectural firm, England Brothers, to design a house for him. Construction began in April 1899 and was completed in 1900. At the time of its construction McLean's Mansion was reputed to be the largest wooden residence in New Zealand; the building comprises 53 separate rooms, including 19 bedrooms. Built of rimu, this timber framed house features distinctive iron crested lead covered ogee topped twin towers. 1 Its Jacobean interior was unusual for Christchurch as at that time most large timber houses were designed in a more informal style.

8 The building's cultural heritage values are summarised in a heritage assessment undertaken by the City Council in 2014 and referred to by the heritage experts in evidence. This document succinctly describes the main features of the building as follows:

The Jacobean style, adapted by England to timber construction, was eclectic in its sources as can be seen in the variety of motifs found at McLean's Mansion. The interior of the building was richly decorated with many of the original features remaining in situ. The entrance hall has a double return staircase with an arcaded classical gallery at first floor level. The hall is lit from above by a massive glass skylight. Each of the principal rooms is entered through a doorway featuring a carved wood tympanum. The late 20th century adaptive reuse of the building brought about some limited alterations with the main interior spaces remaining intact. The upper parts of the chimneys were removed during the first half of the 20th century. 2

9 Mr McLean never married and lived in the building until his death in 1907. 3 The building was then occupied by Mrs Emily Philips, his long-serving housekeeper, who lived there until 1913. After she left, in accordance with the provisions of his Will, the building was used as a “home for women of refinement and education in reduced or straitened circumstances”. It remained in that use until 1955 when it was sold to the Health Department for use as a nurses’ hostel. 4

10 In 1987 the property was purchased by Alpine View Corporation. At the time of purchase the owners gave an undertaking that they would enter into a heritage covenant with the Historic Places Trust (now Heritage New Zealand Pouhere Taonga). The terms

of the covenant were not agreed, and the Historic Places Trust subsequently registered a caveat against the property's title. 5

11 The registered proprietors of the building have changed since the property was first purchased in 1987. While this was not adequately explained in evidence it appears since the Canterbury earthquakes two limited liability companies (Alpine View Corporation Ltd and Murray Educational Management Limited) 6 have owned the property on behalf of a family Trust, of which Andrew James Murray is a trustee and is authorised to give evidence in support of the appeal. Generically we refer to the registered proprietors as “the owners”.

12 After its purchase by Alpine View Corporation in 1987 the building was used as the head office of Academy New Zealand Limited and as an educational facility. Mr Murray is a former director of this company. Academy New Zealand is a NZQA registered private tertiary educator specialising in working with unemployed adults wanting to re-enter the workforce and young people wanting to achieve qualifications they have not been able to achieve in the traditional secondary school system. 7

13 Prior to the earthquakes the building underwent regular repair and maintenance. The owners restored significant artworks and antique furniture that were part of the McLean estate. They sponsored the writing and publication of a book about Mr McLean and the building. Artists were commissioned to paint the building and a photographic record of the building was also undertaken. In addition the building played host to regular public events and tours. 8

Events following the Canterbury Earthquakes

14 The September 2010 earthquake caused minor to moderate damage to the building and students and staff were relocated to another site. 9 The February 2011 earthquake caused extensive damage to the building and the Canterbury Earthquake

Recovery Authority (CERA) subsequently issued a notice initially prohibiting, and then restricting, access. While temporary stabilisation was added to the building in August 2011 to prevent its collapse, the building remains unsafe for occupation as it less than 33% of the New Building Standard (NBS). 10

15 The building was insured for $5,675 million (M). The owners have received an insurance payout, which they have reinvested. 11

16 In March 2012 the owners obtained a report from quantity surveyors, Davis Langdon, estimating the cost of repairs at $12.3M. If the insurance payout was applied to the cost of repairs this would have left a shortfall of $6.6M to restore the building. Upon receiving the Davis Langdon report the owners decided against undertaking restoration of the building, and instead put the property on the market and made its first application for an emergency authority to demolish the building. 12 This application was not progressed, and is not the subject matter of this appeal.

17 In the same year the property was put up for sale at its land value (some $2.8M to $3M), 13 and it remains on the market. As the owners do not propose to pass the insurance payout on to the future purchaser, any purchaser would need to fund the costs of restoration. 14 Upon request a copy of the 2012 Davis Langdon estimation of restoration costs has been provided to persons expressing an interest in the property. More recently, the owners have provided copies of the updated cost estimates dated February 2016 included in the joint witness statement of the quantity surveyors. These estimates of costs are significantly less than those contained in the 2012 estimate.

18 Before reaching the decision to demolish the building, the owners had considered the option of recouping their investment through restoring the building and renting it. In his evidence Mr Murray estimated the percentage rental return on a repair cost of $15M to be 2%, a return against which he said the owners’ bankers would not

lend money. 15 The $15M allows for an inflation adjustment of the 2012 Davis Langdon estimate of $12.3M. 16 In addition, if the value of the underlying land was included, Mr Murray said that the economic return would be less (1.8%)

19 Mr Murray agreed that the 2016...