Westgate Town Centre Ltd (in Liquidation) v Auckland Council

• Jurisdiction: New Zealand
• Court: Court of Appeal
• Judge: Palmer J
• Judgment Date: 17 September 2025
• Neutral Citation: [2025] NZCA 474
• Year: 2025
• Docket Number: CA369/2023

Between

Westgate Town Centre Limited (In Liquidation)

First Appellant

and

Westgate Properties Limited

Second Appellant

and

Nzrpg Management Limited

Third Appellant

and

Westgate Town Centre (2017) Limited

Fourth Appellant

and

Westgate Properties (2017) Limited

Fifth Appellant

and

Nzrpg Management (2017) Limited

Sixth Appellant

and

Auckland Council

First Respondent

and

Auckland Transport

Second Respondent

[2025] NZCA 474

Court:

Goddard, Cooke and Palmer JJ

CA369/2023

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

Contract, Local Authorities — against decision that the respondents had not breached their contractual obligations — principles of contractual interpretation — implied terms

Counsel:

B D Gray KC, A I C Denton and G N M Tompkins for Appellants

R B Lange, L B Harrison and A G A Trask-Coombs for Respondents

• A The appeal is dismissed.

• B The appellants must pay one set of costs to the respondents for a complex appeal on a band B basis together with usual disbursements. We certify for second counsel.

JUDGMENT OF THE COURT

REASONS OF THE COURT

(Given by Palmer J)

Table of Contents

Summary	[1]
What happened?	[4]
General background	[5]
Proceedings	[14]
Contractual interpretation	[21]
Principles of contractual interpretation	[21]
The High Court's approach to interpretation and implied terms	[24]
Submissions	[25]
Contractual obligations here	[27]
Issue 1: Was Fred Taylor Drive required to be widened so as to integrate Original Westgate with the Town Centre?	[34]
What happened?	[35]
Judgment under appeal	[50]
Submissions	[54]
The contractual obligation regarding Fred Taylor Drive	[56]
Issue 2: Was there an implied term to construct Northside Drive East?	[65]
What happened?	[67]
Relevant law of implied terms	[69]
Judgment under appeal	[73]
Submissions	[76]
Contractual obligation regarding Northside Drive East	[79]
Issue 3: When was Maki Street South required to be upgraded?	[83]
What happened?	[83]
More relevant law concerning implied terms	[91]
Judgment under appeal	[94]
Submissions	[98]
Contractual obligation regarding Maki Street South	[100]
Issue 4: What were the obligations regarding the location of the bus interchange?	[107]
What happened?	[107]
Judgment under appeal	[110]
Submissions	[111]
Location of the bus exchange	[113]
Result	[122]

Summary

1 From 2002, Waitakere City Council (Waitakere City), developed a vision for a new metropolitan Westgate Town Centre (the Town Centre), to be located across Hobsonville Road (later renamed Fred Taylor Drive) from the original Westgate Shopping Centre (Original Westgate). 1 The New Zealand Retail Property Group (NZRPG) worked with Waitakere City to develop the Town Centre. The plaintiffs in the High Court, and the appellants here, are part of NZRPG. 2 Waitakere City and NZRPG entered something akin to a customised, relational public-private partnership over a prolonged period, as reflected through a number of planning and contractual documents.

2 In the middle of all of this, the Auckland “super city” was created, taking over Waitakere City's obligations. Auckland Council also entered into further agreements with NZRPG in relation to the Town Centre. NZRPG consider that Auckland Council and Auckland Transport took a fundamentally different approach to that originally envisaged, developing Fred Taylor Drive as an arterial route rather than a pedestrian-friendly town centre road, delaying upgrades to Maki Street South for nine years, failing to construct Northside Drive East, and failing to ensure construction of the envisaged bus interchange at an agreed location. NZRPG allege that this involved multiple breaches of various contracts entered into in relation to the Town Centre. Auckland Council and Auckland Transport consider their actions did not breach any applicable contractual obligations. NZRPG sued Auckland Council and Auckland Transport for breach of contract on several grounds. The High Court

held that NZRPG had not made out any of the contractual breaches it alleged. 3 NZRPG appeal

3 The contractual provisions relied on by NZRPG must be interpreted in accordance with well-established principles. 4 The aim is to ascertain “the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time” each of the contracts was entered into. 5 Adopting that approach, each of the four grounds of appeal fail:

• (a) The parties agreed from the outset that their shared vision for the Town Centre did not create binding contractual obligations in the absence of more specific agreements. Apart from anything else, this was a necessary qualification given the statutory functions of Waitakere City (and its successor local authorities). Contractual obligations were then spelled out in the subsequent contractual documents, but these were specific and limited, and did not create broader contractual obligations to deliver the shared vision. The contractual terms need to be interpreted in light of that context, which means there is limited scope for implied terms expanding the councils' contractual obligations beyond what was specifically agreed, or for interpreting the express terms to similar effect.

• (b) The contractual documentation did not specify the design standards for the design and construction of Fred Taylor Drive that NZRPG allege were expressly required. Nor did they provide an adequate basis for an inference that generic statements of vision about aspects of the Town Centre constituted contractually binding specifications of quality standards for the design and construction of Fred Taylor Drive.

  To suggest otherwise appears contrary to the commercial realities of risk allocation agreed to by the parties. The existence of an implied term to this effect is also contradicted by the express allocation of all responsibilities for the design and construction of Fred Taylor Drive to Waitakere City.

• (c) There was no contractual commitment by Waitakere City to construct Northside Drive East. Indeed, there was express contractual recognition that there was no such agreement. Against that backdrop, a commitment to fund and construct Northside Drive East cannot be implied based on express terms governing the development of Fred Taylor Drive, and an alleged need to construct Northside Drive East to make the contemplated redevelopment of Fred Taylor Drive possible. It is implicit in most contracts that neither party will take steps that prevent performance of the contract by bringing to an end circumstances on which that performance depends. But in the present case, construction of Northside Drive East was not necessary to avoid undermining the Fred Taylor Drive contractual commitments. If a commercial commitment of this scale and significance had been intended, it would have been provided for expressly. It was not. And it cannot be implied.

• (d) The contractual documents relating to the upgrade of Maki Street South initially left key details to be discussed and agreed by the parties. Once agreement was reached, the work was carried out by Auckland Council and Auckland Transport in a timely manner. There was no breach of an implied term to carry out agreed work within a reasonable time.

• (e) There was a shared understanding about the location of the bus interchange, but there was no contractual obligation on the parties to fund or construct that interchange until agreement had been reached by the parties and Auckland Transport on the terms of the relevant easements, the design and specifications for the interchange, a service level agreement, and funding for construction. In the absence of agreement on those matters, the failure to fund and construct the bus interchange was not a breach of contract.

What happened?

4 The factual context to this appeal is set out comprehensively in the High Court judgment and is not contested. We provide a high-level summary before considering the four more specific issues raised on appeal.

General background

5 There is a Westgate Shopping Centre, called Original Westgate in the High Court, near Massey, Auckland. 6 It is on land still largely owned by companies controlled by Mr Mark Gunton, which are part of NZRPG. 7 NZRPG originally considered developing a vertical mall, 8 which was submitted to be like that at Sylvia Park in Auckland.

6 In the late 1990s and early 2000s, a series of decisions were taken by central government, the Auckland Regional Council, Waitakere City, and other councils in the Auckland region to address expected growth. 9 From 2002, Waitakere City developed a vision for the Town Centre, to be located across the street to be known as Fred Taylor Drive from Original Westgate. 10 NZRPG submit they gave up pursuing a vertical mall at Original Westgate. They worked with Waitakere City to develop the integrated Town Centre instead. 11 In essence, Waitakere City and NZRPG entered something akin to a customised, relational public-private partnership over a prolonged period which depended on good working relationships.

7 In summary, the parties' vision was pursued through the following instruments: 12

• (a) In July 2004, Waitakere City signed a memorandum of understanding (the MoU) with one of Mr Gunton's companies, IMF Westland Ltd, agreeing to work together to achieve shared goals for the Town Centre. 13 The MoU recorded that it was not legally binding, and did not replace the need for a more detailed formal contractual relationship. 14 The MoU is part of the context of the subsequent contracts.

• (b) In March 2005, Waitakere City notified a...