New Zealand Kiwifruit Growers Incorporated v Gisborne District Council [2021] NZHC 2198 (25 August 2021)

Last Updated: 8 October 2021

IN THE HIGH COURT OF NEW ZEALAND GISBORNE REGISTRY I TE KŌTI MATUA O AOTEAROA TŪRANGANUI-A-KIWA ROHE

CIV-2021-416-15 [2021] NZHC 2198

UNDER	the Judicial review Procedure Act 2016 and Part 30 of the High Court Rules
IN THE MATTER	of a rating decision by Gisborne District Council
BETWEEN	NEW ZEALAND KIWIFRUIT GROWERS INCORPORATED Applicant
AND	GISBORNE DISTRICT COUNCIL Respondent

Hearing:	20 August 2021
Appearances:	T Mijatov for the Applicant H P Harwood O Maassen for the Respondent
Judgment:	25 August 2021

JUDGMENT OF COOKE J

• [1] By application dated 13 August 2021 the Gisborne District Council (the Council) seeks to have these judicial review proceedings brought by the New Zealand Kiwifruit Growers Incorporated (NZKG) stayed, pending a determination to a valuation objection relating to a property in Bushmere Road, Gisborne (the Bushmere objection) presently before the Land Valuation Tribunal (the Tribunal). The application is opposed by NZKG.

Background

• [2] The judicial review proceedings brought by NZKG challenge the inclusion of Plant Variety Rights licences for gold kiwifruit, known as G3 licences, in the valuation

NEW ZEALAND KIWIFRUIT GROWERS INCORPORATED v GISBORNE DISTRICT COUNCIL [2021] NZHC 2198 [25 August 2021]

of growers’ land for the purposes of setting the rateable value of that land, and accordingly the rates.

• [3] Two claims are advanced. The first is that, as a matter of law, the licences are not within the value of the land in accordance with the definitions in the Rating Valuations Act 1998 (the Act). On that basis they are irrelevant to the assessment of the value of the land, and the Council is alleged to have erred in adopting valuations that include the value of the licence as part of the value of the land. The second claim involves a breach of natural justice. In essence it is alleged that a new policy was adopted by the Council as a consequence of the Valuer-General publishing a statement in January 2021 to the effect that the value of the G3 licences should be included in rating valuations. It is alleged that it was procedurally improper for the Council to adopt that policy without giving growers the opportunity to be heard on that question.

• [4] There are 49 growers with G3 licences in the Gisborne district with over 63 orchards.¹ Only one of those growers has pursued the objection procedures in the Act, with this objection (the Bushmere objection) is now before the Tribunal. There is a right of appeal from decisions of the Tribunal to the High Court.

• [5] These proceedings initially came before me at a telephone conference. At that stage the parties had presented a proposed agreed approach under which the Bushmere Road objection would be transferred by the Tribunal to this Court and heard together with this judicial review proceeding.² At the telephone conference on 5 August I raised two concerns about that approach. The first was that the High Court would be dealing with the objection proceeding removed to it without the benefit of a decision of the Tribunal. The second was that appeals from the Tribunal are heard by the High Court with the Court sitting with an expert valuer.³ But that valuer could not sit with the High Court Judge on the judicial review proceeding. I accordingly saw logistical difficulties with what the parties were proposing, and suggested they consider the matter further.

¹ The statement of claim indicates the applicant represents 2,792 kiwifruit grower members nationwide, and 90 kiwifruit growers in the Gisborne district.

² Land Valuation Proceedings Act 1948, s 22(2).

³ Section 13.

• [6] The parties did so and advised that they no longer pursued that suggested way forward, but rather that the Council’s application to stay the judicial review proceeding would be heard. In effect my initial resistance to what the parties had proposed moved them back to their earlier positions where NZKG wanted the judicial review proceeding to be heard first, and the Council wanting the Bushmere Road objection to heard first.

Assessment

• [7] I will not lengthen this judgment by recording the arguments advanced by Mr Harwood and Mr Mijatov, but I will endeavour to address the key points when setting out my reasoning.

• [8] In short, I have decided that the appropriate course is to stay these judicial review proceedings pending further order of the Court. This will allow the issues to be addressed by the Tribunal in the Bushmere Road objection, and then on appeal to this Court if necessary. Whether there remains utility in the judicial review proceedings can then be assessed.

• [9] I accept Mr Mijatov’s point that the starting point is that the growers have a right to peruse judicial review proceedings. Statutory powers of decision have been exercised, and affected persons may seek to challenge the legitimacy of the exercise of those powers. The right to apply for judicial review is a fundamental right, and is recognised as such by the New Zealand Bill of Rights Act 1990.⁴ This right exists even when the applicant has a right of appeal to the High Court. This is recognised by the Judicial Review Procedure Act 2016 which provides that the Court may give relief in a judicial review proceeding “even if ... the applicant has a right of appeal in relation to the subject matter of the application”.⁵

• [10] But judicial review is a discretionary remedy. As Cooke P said in Fraser v Robertson with respect to the legislative predecessor to the Judicial Review Procedure Act:⁶

⁴ New Zealand Bill of Rights Act 1990, s 27(2).

⁵ Judicial Review Procedure Act 2016, s 16(3)(a).

⁶ Fraser v Robertson [1991] 3 NZLR 257 at 260 (CA).

In New Zealand the judicial review jurisdiction under the Judicature Amendment Act 1972, Part I, is discretionary and it is established practice that, although the jurisdiction expressly extends by s 4(1) to cases where the applicant has a right of appeal in relation to the subject-matter of the application, relief under the Act will be refused if the remedy of appeal is more appropriate: see for instance Auckland Acclimatisation Society Inc v Sutton Holdings Ltd [1985] 2 NZLR 94, 103. ...

• [11] The earlier decision of the Court of Appeal in Auckland Acclimatisation Society Inc contemplated the “withholding of the discretionary remedy of review when an appeal is pending”.⁷

• [12] For the same reasons a stay may be entered in circumstances where the Court is satisfied that the more appropriate course is to allow the appeal to proceed. Indeed this has happened on two previous occasions when judicial review proceedings have been brought in relation to matters that are also before the Tribunal. In Telecom New Zealand Ltd v Christchurch City Council the High Court granted a stay of judicial review proceedings to allow an appeal to proceed before the Tribunal.⁸ It is true that the Court of Appeal subsequently criticised the Tribunal for then granting what were effectively judicial review remedies in the proceedings before it (as well as the High Court to the extent it had contemplated that this could happen).⁹ But the Court did not criticise the entry of a stay in itself. Later in Blair v Upper Hutt City Council the High Court again stayed judicial review and damages proceedings to allow the appeal before the Tribunal to proceed. Clifford J held:¹⁰

[15] All this leads me to the conclusion that the efficient and fair resolution of these matters would be best promoted if the decision of this Court on appeal from the Land Valuation Tribunal has been determined and is available before the review and damages proceedings, and associated strike out applications, are heard. I think that this approach is consistent with those decisions which indicate a preference for appeal rights being exercised in preference to judicial review claims, whilst at the same time accepting, particularly in light of the Telecom decision, that the appeal against the Land Valuation Tribunal’s decision may be unlikely, in this instance, to address all the concerns the appellant/plaintiffs have with the actions of the Upper Hutt City Council.

⁷ Auckland Acclimatisation Society Inc v Sutton Holdings Ltd [1985] 2 NZLR 94 at 103 per Cooke J.

⁸ Telecom New Zealand Ltd v Christchurch City Council HC Christchurch CP 68/02, 18 March 2003.

⁹ Telecom New Zealand Ltd v Christchurch City Council CA 25/04, 7 March 2005.

¹⁰ Blair v Upper Hutt City Council HC Wellington CIV-2005-485-1961, 21 June 2006.

• [13] I accept that the fact that stays have so been entered in two previous cases does not mandate a stay being entered in the present case. It all depends on the facts and circumstances of the present case, and what will lead to the most appropriate procedural path for disposal of the issues that are raised. There are circumstances that may distinguish both Telecom and Blair. So what is required is a careful consideration of the present circumstances.

• [14] The present case nevertheless involves processes before a specialist tribunal with valuation expertise established to deal with valuation disputes. For that reason it might be thought that there is an advantage, or even a presumption in favour of allowing the processes before the specialist body to proceed, and then addressed before the High Court on appeal.

• [15] The ultimate question involves the Court determining the way forward that best secures the fair and efficient consideration of the issues raised by these judicial review proceeding. I accept Mr Mijatov’s point that a stay should not be granted unless there are good reasons to do so. But it is also relevant that this is only an application for a temporary stay. The right to pursue judicial review will remain. The only question is whether the applicant’s appeal rights should be exercised first.

• [16] Mr Mijatov questioned what procedural powers the Court was being asked to exercise when considering the Council’s stay application. The Court’s procedural powers to control and give directions for a judicial review proceeding are to be found in ss 13 and 14 of the Judicial Review Procedure Act. These powers are given a broad interpretation. They allow the Court to apply other rules in the High Court Rules 2016 to facilitate the just disposal of judicial review proceedings. For example they allow an application for strike out to be pursued with the leave of the Court.¹¹ Similarly a stay can be entered under r 15.1 of the Rules, or in connection with the discretion as to relief and associated procedural powers in judicial review proceedings. Moreover s 14(2)(l) and (m) allow a Judge to fix the time for hearing the judicial review proceeding and to give consequential directions as necessary. The discretionary

¹¹ See Hauraki Coromandel Climate Action Inc v Thames-Coromandel District Council [2020] NZHC 3228 at [21]- [22]; Hauraki Coromandel Climate Action Inc v Thames-Coromandel District Council [2020] NZHC 444 at [15].

powers associate with judicial review proceedings may be most relevant in a case where the ultimate question is one directed to securing the most efficient, effective and fair disposition of the proceedings.

• [17] I agree with Mr Harwood that a central question is “whether the statutory objection process is capable of effectively determining the issues raised in the judicial review proceedings”.¹² As the Court of Appeal confirmed in Telecom New Zealand Ltd v Christchurch City Council the Tribunal has no jurisdiction to hear and determine judicial review challenges, or grant the kind of relief that the High Court in a judicial review proceeding can grant.¹³ But it is relevant to consider whether it will assess, or be required to assess, the substantive issues that are raised in the judicial review proceeding.

• [18] As indicated, the judicial review proceedings involve two claims, one directed to an alleged misinterpretation of the provisions of the Act, and the second alleging a breach of natural justice. I address both of those claims in turn.

Misinterpretation of the Act

• [19] The main issue of substance raised in the judicial review challenge is that the G3 licences are not an interest in land under the Rating Valuations Act. Part of that argument, as I understand it, is that the terms of the licences as issued effectively give the licence holder the option when selling the land to include the licence rights in the sale or not. That is the licence rights do not inherently run with the land, and they are not within the relevant defined terms associated with the relevant interests in land in the Act.

• [20] I accept Mr Mijatov’s point that this argument involves questions of law, and that these questions can properly be addressed by the High Court in a judicial review proceeding. But I also accept Mr Harwood’s argument that the issues are, or may be, mixed question of fact and law. It may be that it is rare for a G3 licence holder not to include the licence rights with the sale of the land on which the crop is planted. And

¹² Telecom New Zealand Ltd v Christchurch City Council, above n 8 at [23] per Chisholm J.

¹³ Telecom New Zealand Ltd v Christchurch City Council, above n 9 at [39].

if the licence rights do not get transferred with the land, there would remain a valuation exercise associated with the land planted with gold kiwifruit.

• [21] The Tribunal can be called upon to address such more complex mixed questions of fact and law of this kind. For example it did so in Ngāti Whakaue Education Endowment Trust Board v Rotorua District Council in relation to inalienable land,¹⁴ and is also called on to do so in other contexts, such as when land is subject to a lease.¹⁵ There is no specific statutory provision in relation to land subject to licences. But the point is that such questions are addressed by, and are within the expertise of valuers, and ultimately the Tribunal. So I accept Mr Harwood’s submission that it would be within the jurisdiction of the Tribunal to address the mixed questions of fact and law over what impact the G3 licences have on rating value. Indeed such questions would be regarded as squarely within this Tribunal’s expertise. The Tribunal is comprised of an Environment Court Judge and two expert valuers. Whilst the High Court could also address these questions in a judicial review proceeding, it would be of significant advantage to the Court to address those questions with the advantage of a decision of the specialist lower tribunal, and also given the assistance provided from the Court sitting with a valuer.

• [22] Mr Mijatov argued that the growers nevertheless wished to pursue the claim in judicial review because there were discrete questions of law that did not involve more complex factual evaluations, and that it was more efficient to obtain the High Court decision on those questions rather than proceeding before the Tribunal. As pleaded, the judicial review claim is advanced on the basis that the G3 licence rights are totally irrelevant to the land valuation exercise – in other words it is raised as an all or nothing question. So it is not advanced in a way that engages the more complex evaluation questions that might be said to arise.

• [23] But although the claim is advanced on this basis, it is not clear to me that the more complex questions can necessarily be avoided. At the very least they appear relevant. It creates potential difficulty for the High Court to consider those more

¹⁴ Ngāti Whakaue Education Endowment Trust Board v Rotorua District Council [2021] NZLVT 008.

¹⁵ See Rating Valuations Act 1998, s 21.

complex issues in a judicial review proceeding, even to evaluate whether they may arise at all, without the benefit of a decision of the Tribunal and an expert valuer on the Court. The position might be different if it was clear that the more complex, and evaluative, questions would definitely not arise for consideration in the judicial review challenge. But I am not presently persuaded of that. Faced with the choice, it seems to me that it would be far better for the High Court to address the issues raised in the judicial review proceedings with the fuller assistance that the statutory objection procedures provide.

• [24] Mr Mijatov argued that the judicial review proceeding was advanced by a significant number of the growers who are members of NZKG, and that only one of those members had the proceeding before the Tribunal in the Bushmere Road objection. But I accept Mr Harwood’s response on that point. The Bushmere Road party is part of the grower group, and it is represented by the same counsel. It can be expected to advance the same points that the group wishes to raise in the judicial review proceeding. Following the decision of the Tribunal, or this Court in the Bushmere Road objection the Council can effectively be required to reassess the rating value of other landholdings if an error in approach is identified. I understood Mr Harwood to accept on behalf of the Council that it would be obliged to do so. Moreover under s 16 of the Act any owner or ratepayer may request a revaluation, and then any new valuation, or a refusal to make one, itself becomes subject to the objection procedures involving the Tribunal and the High Court under s 16(4) of the Act. This means that the Bushmere Road objection can be precedent setting for all the other growers in the same, or a similar position. In addition given the judicial review proceeding is only sought to be stayed it could later be pursued if necessary.

• [25] I accept that there may be some delay for the growers in having the issue that they seek to have so determined. The affected growers will be obliged to pay rates at the higher levels set by the decisions they seek to have challenged in the meantime. But as Mr Harwood pointed out there is a right to have any excessive rate payments refunded, and with interest. So that mitigates the adverse effects involved.

The Natural Justice Allegations

• [26] Different considerations apply in relation to the natural justice claim.

• [27] I accept Mr Mijatov’s argument that it is clear that the Tribunal, and even the High Court on appeal, has no jurisdiction to address the natural justice challenge advanced in the judicial review proceedings by NZKG. But there is a related issue concerning that aspect of the challenge which goes back to the discretionary nature of judicial review relief. In Telecom New Zealand Ltd v Christchurch City Council the Court of Appeal addressed a similar situation where the High Court had stayed the judicial review proceedings to allow the related proceedings to proceed before the Tribunal.¹⁶ There the Court held:

[59] ... even if Telecom showed that the processes leading to the valuations were defective, it is highly likely that the High Court would have held that a hearing de novo before the tribunal would cure any deficiencies and that the High Court would have simply declined relief in its discretion under the Judicature Amendment Act 1972, s 4(3): Slipper Island Resort Limited v Number One Town and Country Planning Appeal Board [1981] 1 NZLR 143 (CA) at 145; Smith v Waikato County Council [1983] NZHC 103; (1983) 9 NZTPA 362 (HC); McNaughton v Tauranga County Council (No 2) (1987) 12 NZTPA 429 (HC); Commissioner of Inland Revenue v Dandelion Investments Limited (2001) 20 NZTC 17,293 (HC) at [57]. We accept that those cases involve in the main appeals in circumstances where it was argued natural justice had been denied at first instance. But in our view, the principle holds good by analogy. Indeed, it could be said the principle applies a fortiori here given that the tribunal’s hearing is de novo with none of the restrictions normally inherent in an appeal process.

• [28] More recently the High Court has declined to give interim relief in judicial review proceedings which raised allegations of procedural impropriety by the Tribunal including because the subsequent appeal to the High Court had the potential to cure such procedural deficiencies.¹⁷

• [29] Similar points may arise here. The Court will be in a much better position to assess whether there has been any procedural impropriety in the overall process once that process has been completed. It could conclude that any complaint that the growers should have been consulted before a change in rating policy should not give rise to a decision to set aside the rating decisions because the statutory rights to participate in

¹⁶ Telecom New Zealand Ltd v Christchurch City Council, above n 9.

¹⁷ Rongotai Investments Ltd v Land Valuation Tribunal [2019] NZHC 3040 at [25].

an objection procedure, including the rights of appeal, and the rights so exercised, mean that no such relief is necessary, or appropriate.

Conclusion

• [30] For these reasons I grant the Council’s application to stay the judicial review proceedings. The proceedings are stayed pending further order of the Court. I anticipate that the proceedings will be stayed at least until the decision of the Tribunal on the Bushmere Road objection, and possibly pending the outcome of an appeal to this Court. A stay pending further order allows the Court to reassess the position as events unfold. Both the parties have leave to apply to have the stay lifted given developments.

• [31] I discussed with counsel at the hearing that irrespective of the outcome of this application that costs should be reserved. This was at least in part because of the genuine attempt that has been made by both sides, and counsel for both sides, to try and work out the most efficient way forward for these matters. Costs will accordingly be reserved.

Cooke J

Solicitors:

Simpson Grierson, Wellington for the Respondent