About

The sale follows an about-face on Alinta’s delayed public float, which itself followed an earlier inconclusive sale process.  The deal remains subject to foreign investment approval in Australia.

In New Zealand, the Alinta assets include the Glenbrook Steel Mill cogeneration plant.

Chow Tai Fook is a privately-owned holding company with existing investments across 50 countries, straddling hotels, retail, property and jewellery businesses.

- Photo courtesy of Alinta Energy

These two projects are estimated to cost Watercare $800 million. The Northern Interceptor wastewater project will be constructed in various stages with construction to begin soon on stage one to service the growth areas in Massey North, Whenuapai, Hobsonville, Kumeu, Huapai and Riverhead. The North Harbour No.2 watermain will service the new Albany reservoir and will replace the existing watermain which cannot be maintained without disrupting local water supplies.

Hadleigh Yonge is leading Greenwood Roche’s team which is advising Watercare on all aspects of these projects, including providing strategic advice, negotiating and acquiring property rights, and advising and dealing with issues relating to compensation.

Austria-based Andritz was awarded the contract to provide work on three generating units at the 78-MW Aratiatia hydroelectric station.

The Greenwood Roche team for this project comprised partner Barry Walker and special counsel Adrian Doherty.  Barry and Adrian are experienced international construction project lawyers, comfortable using a variety of international standard documents, including FIDIC, to assist in smooth cross-border negotiations.

Greenwood Roche acted for Mitre 10 in respect of the procurement and engagement of the contractor and consultant team for its new head office and support centre in Albany.

The facility will comprise approximately 7,000 m² at 65-67 Corinthian Drive, Albany, Auckland. It is being developed by Mitre 10 itself and is due for completion in late 2016.

The Greenwood Roche team for the project included partner Barry Walker and special counsel Adrian Doherty.

Alas, with oil prices falling below US$40 per barrel for a sustained period, Mosman and its joint venture partners were forced to cancel the sale and purchase agreement.  Reportedly, the assets may still be available for purchase.
Partner Brigid McArthur and solicitors Susan Baas and Kurt McRedmond worked with Mosman on its acquisition project, including on its due diligence, sale and purchase negotiations and applications for New Zealand Petroleum & Minerals and Overseas Investment Office consents.

Partner Brigid McArthur recently acted for Ecotricity Limited on the establishment of the joint venture, by way of limited partnership, with Pioneer Generation Limited.  Pioneer owns and operates some significant renewable generation projects in the South Island.  The Ecotricity Limited Partnership is also investing in electric vehicles and associated infrastructure.
Together, Ecotricity and Pioneer are championing the case for investment in renewables and we congratulate them on their venture.  They are at the forefront of what is a growing trend away from conventional fossil fuel based technologies.  Your support can be enhanced by visiting the Ecotricity website and checking the deals on offer.  www.ecotricity.co.nz

Background

The mechanism for allowing central government to design and implement standards which could be applied nationally or for specific localities or regions was introduced in 2017 among a suite of other changes to the Resource Management Act 1991 (RMA). 

The change sought to recognise that while the RMA is necessarily a devolved system in which councils have the ability to tailor their individual regional and district plans and policy statements, the large amount of variation that has consequently occurred has made these documents harder to prepare and use (impacting on efficiency) and has detracted from councils’ ability to invest more time and resource into addressing truly local planning matters.  Some basic standardisation of these documents led by central government is considered to assist in addressing these issues, in addition to creating better alignment and information sharing between councils, and increasing navigability of these documents for professionals and plan users. 

To qualify for standardisation, the Minister for the Environment (or Minister for Conservation if the matter relates to the coastal marine area) must consider that the matter in question:
 

• requires national consistency;
• is required to support the implementation of a national environmental standard, a national policy statement, a New Zealand coastal policy statement or regulations made under the RMA;
• is required to assist people to comply with the new procedural principles set out in section 18A of the RMA.

• The structure standards set a common framework for plan provisions that all plans must use.  The structure is made up of parts, then chapters then sections.  Some chapters are required in all plans, while others are only required if they are relevant to a district or region.  Most notably, a set of 27 zones (divided into ‘zone families’) will be standardised, and will include a purpose statement for each of the zones which guides what it does and their colour(!).  Councils may still create special purpose zones but only in specific circumstances where they do not overlap with the purposes of other zones.  Because Councils have discretion over which zones they will include, a Schedule 1 RMA process must be used to make these changes.
• The form standards are principally concerned with:
  • improving the electronic accessibility and functioning of plans across New Zealand;
  • standardising mapping formats (colours and symbols) and the use of specific spatial planning tools such as zones, overlays, notations, precincts and structure plans; and
  • combining objectives and policies with rules which are to be included in a table format.

In the case Minister of Education v H Construction North Island Limited (formerly Hawkins Construction North Island Limited), compelling evidence of buckets collecting rainwater in classrooms at Botany Downs Secondary College set the scene for a significant judgment.  The Minister alleged that nine buildings leaked due to a raft of construction defects for which the builder was liable.  While Hawkins accepted that there were issues with the buildings related to poor workmanship, it contended that the law has not recognised a duty of care in this context and claimed that the building contract precluded any liability in negligence.
 
The Court found Hawkins liable to pay the cost of remedying over half of the alleged defects, at a total cost of $13.4 million.  The decision confirms a clear trend in recent cases that the scope of a builder’s duty of care to building owners is to comply with Building Code standards.  Importantly, it confirms that a contractual relationship between well-informed and well-advised parties is unlikely to exclude the builder’s tortious duty of care unless the contract expressly says so.
 
Central to Hawkins’ defence was that, under the terms of the contract, the architect assumed either the exclusive or primary obligation to comply with the Building Code, and that it would be wrong to interfere with the agreed allocation of risk and commercial certainty.  This argument was unsuccessful, in part because of the notable absence of the architect as a party to the proceedings, but ultimately due to the absence of any express contractual exclusion of Hawkins’ tortious liability.
 
Contractors and claimants should note the following comments on establishing a breach of the Building Code:

• Moisture meter readings should be approached with caution when used for substantiating a breach.  A lack of evidence of moisture damage or a low moisture meter reading will not necessarily be treated as conclusive.
• Proof of widespread “actual damage” is not required to establish a breach.  The intention of the Building Code is to prevent damage, and therefore a breach can include “potential damage”.
• A complete lack of damage after an extended period will likely be fatal to a claim.  The Court found that, on the basis that the school buildings were now 15 years old, any real risk of damage should have become apparent.  Accordingly, a lack of evidence of damage was treated as conclusive.

Recognising the decision of the Diocese, the strategic importance of the Cathedral to the regeneration of the city, and the threat that continued challenge to the reinstatement would present, the Government has proposed legislation which seeks to streamline the process of reinstatement and provide a higher degree of certainty that it will occur.  We have summarised the key elements of the Bill (which was presented to the House in early December) below. 

In brief:

• The Bill will allow the Governor General, on recommendation by the appropriate Minister, to issue Orders in Council (OIC) to grant exemptions from, modify (which includes suspending, or excluding the jurisdiction of the court) or extend statutes listed in Schedule 2 of the Bill.  Perhaps most significantly, the subject statutes currently include the Resource Management Act 1991 (and plans or rules made under it) and the Heritage New Zealand Pouhere Taonga Act 2014 (Heritage Act).  In effect, an OIC issued under the Bill could substantially alter or indeed suspend the processes under both of these statutes which if left unaltered could allow for further public, Council or Heritage New Zealand input which might further delay the reinstatement. 

• The Bill also contains a mechanism (utilising OICs on the recommendation of the Minister) to add statutes to Schedule 2.  However, the proposal (via an OIC) to include further statutes in Schedule 2 is made subject to confirmation by the House of Representatives.

• The application of OICs is geographically bound, only applying to the Cathedral area. 

• The supervisory jurisdiction of the High Court through judicial review is proposed to be time bound, requiring applicants to lodge a statement of claim within 28 days of the relevant decision being made.  The justifications for the proposed limit on this crucial constitutional role are the risk and delay to the project, should parties have an open ended right to request review of decisions made under it, and the reduced risk of review given the airtime (both through broader consultation and litigation) already given to affected parties to express their views and concerns.  The limiting of the supervisory jurisdiction of the High Court by the legislature and/or the executive branches has rarely gone down well with the judiciary.  However given the nature of the limit (timing of bringing a claim) and the history of the Cathedral, it may be considered justified on this occasion. 

• Perhaps more interestingly, clause 17(2) of the Bill provides that even where review is requested in good time and the exercise of power is found by the High Court to be invalid, any such determination does not affect the validity or effectiveness of any action already taken under or in reliance on the exercise of power.  Although, the Court retains a discretion to order that that the subsection does not apply this section reinforces to need to act quickly to challenge a decision.  This is both in order to meet the time restriction, but also to mitigate or avoid the risk of what would essentially be a meaningless claim if the action to which the decision relates is already carried out and cannot be “undone”. 

• The recommendation of Minister to the Governor General to issue an OIC in respect of a Schedule 2 statute must satisfy the following pre-requisites before it may be made:

• The Minister must be satisfied that (among other matters) the OIC is necessary or desirable for the purposes of the Act (described below).

• The terminology “necessary or desirable” seems to be a deliberate deviation from the requirement included in both the (now repealed) Canterbury Earthquake Recovery Act 2010 and the Greater Christchurch Regeneration Act 2016 of the Minister to only exercise his/her powers where he/she “reasonably considers it necessary”.  That requirement was subject to a prescriptive judicial interpretation by the Court of Appeal in Independent Fisheries, instituting it as a very high bar for the Minister to meet (1).   Confirmed in that same decision, “desirable” on the other hand sets a much lower bar (2).
•  A draft of the OIC has been reviewed by a Panel established to review the OICs and the Regulations Review Committee.
• The Minister has had regard to the Panel’s recommendations on the OIC and the comments of the Committee.
• The Minister has consulted with the Minister for Arts, Culture and Heritage (if the OIC relates to the Heritage Act), or the Minister for the Environment (if the OIC relates to the RMA).
• The statutory engagement process has been followed.
• In short, this process requires the Minister to “make available” an explanation of the aim of the proposal, the effect it will have, and why the Minister thinks it is “necessary or desirable” to persons the Minister thinks appropriate given the proposed effect of the Order, or to the public generally.  Those persons have 20 working days to provide written comment on the proposal, and the Minister must have regard to those comments. 

• The requirement to exercise statutory authority in accordance with the purposes of the authorising legislation provides a critical “check” on the exercise of power by public bodies. The purposes of the Bill is to facilitate the reinstatement of the Cathedral and, in particular;

• To facilitate the rein-statement in an expedited manner compared with processes and requirements outside the Act; or
• To provide cost-effective process for reinstatement compared with processes outside the Act; or
• To achieve earlier or greater certainty for the owner of the Cathedral and the Christchurch community generally as to the reinstatement of the Cathedral than would be likely under processes and requirements outside the Act.

Interestingly, in order to meet any of those purposes, the proposal (to which the exercise of power relates) must meet both the definition of “re-instatement” and “Cathedral” in clause 4.  Both definitions are broadly drawn.  “Cathedral” includes all ancillary structures and improvements proximate to, and directly associated with, the Cathedral.  “Reinstatement” includes 1 or more of a wide range of other actions, including “demolition of any part of the Cathedral”.  There are, in other words, a plethora of actions as part of reinstatement that this Bill will seek to provide for.  As currently drawn, we do not however consider that, should the decision to reinstate be changed to demolish and replace, the Bill would provide for this. 

General Comment

The discretion afforded to the Minister and the proposed absence of substantive public process will undoubtedly raise concerns as the Bill progresses through the House.  As alluded to, any limitation on the supervisory jurisdiction of the High Court will also attract controversy.  On that basis we would expect to see some amendment to the Bill.  However this is a very specific context and the legislation is designed to address a very specific mischief, being to accelerate the resolution of what has been a very long, expensive and contentious matter.  Further, legislation to facilitate whatever outcome was determined for the Cathedral was also indicated from the former Government, and as such, we could expect general support from both sides of the House. 

Greenwood Roche’s resource management specialists have unrivalled experience with delivering large scale project developments across New Zealand (and particularly in the Canterbury context) using fast track planning legislation.  Our team is following the development of this legislation closely and will provide updates as they come to hand.

Congratulations to Fiona Short of Warren and Mahoney, this year’s winner of the Greenwood Roche Young Achiever Award.  Fiona is a very deserving winner of this award.  She has recently become an Associate in the Christchurch Warren and Mahoney office, recognising her contribution to the Canterbury Rebuild.  Moving to Christchurch months after the Canterbury Earthquakes, Fiona quickly found her stride working on a wide range of architectural projects.  Her work on the Mary Potter Apartments went on to win a New Zealand Institute of Architects Canterbury Architecture Award. 

Fiona has a clear passion for sustainability, leading the sustainability portfolio group within Warren and Mahoney.  This group has been instrumental in creating documents to redefine what sustainability means to the architecture practice.  Fiona has also played an active role in conversations about diversity and inclusion in the construction industry, including being part of the team responsible for organising the Architecture + Women exhibition aimed at increasing the visibility of the work in the rebuild undertaken by Christchurch women architects.

Congratulations Fiona, we look forward to seeing where your career takes you and to working with you in the future.

Feedback was sought on the overall Proposal, but also on the specific components of the Proposal which was divided into 169 component parts.  In addition to public consultation, MBIE held 45 separate meetings with key stakeholders from both the public and private sectors, and with various Māori groups (including iwi and interest groups). 

350 submissions were lodged during the three month consultation period and, while certain aspects of the proposal were almost unanimously opposed, the Proposal generally received support from over half of the submitters.  Perhaps unsurprisingly, the key aspects opposed including the extent of public consultation; the loss of traditional rights of appeal; the demotion of Part 2 of the RMA; and the transfer of consenting authority to a UDA.  The limited involvement of regional councils was also broadly opposed.  These matters proved less troubling to the development community, who broadly identified that while these matters diverted from traditional pathways, opportunity for effective engagement remained and the diversion could be justified by the increased efficiency and certainty the alternative proposal offered.  Infrastructure was also a core focus of the submissions, which generally identified that it needed to be addressed in a more holistic manner taking into account existing infrastructure and infrastructure providers, and the allocation of capex and opex.

MBIE has produced a useful “summary of the summary”, which can be found here http://www.mbie.govt.nz/info-services/housing-property/urban-development-authorities/document-image-library/Summary-of-submissions.pdf.

It is not clear where the UDAP will go from here.  The new government campaigned on, and has subsequently discussed the establishment of, an Affordable Housing Authority which would be an urban development authority with a focus on delivering housing.  However, whether the UDA model proposed earlier this year will form the basis for the establishment of that authority remains to be seen.  We are following this closely and will keep you informed as news comes to hand.

From the London Docklands to Singapore’s Marina Bay Sands, urban development authorities have been responsible for the delivery of many of the world’s most impressive municipal projects.  In February 2017, the National government released a proposal seeking to bring these entities to the New Zealand context.  During the recent elections, Labour campaigned for the establishment of a similar housing focused entity.  In an article recently published in the Resource Management Law Journal, Francelle Lupis and Rachel Murdoch take a closer look at the opportunities that urban development authorities present for the sustainable and innovative growth of our urban centres

The proposal

The UDA proposal is one of a number of measures the Government has proposed in recent years to address housing supply and affordability, encourage economic growth, and elevate issues associated with urban development within an RMA framework that largely ignores the success of our cities in favour of the preservation of natural resources. 

While Auckland’s “housing crisis” may be a particular impetus for these measures, the proposal has much wider scope – namely, the revitalisation of urban areas across the country through partnership between the private and public sectors.  In brief, the urban development authority model offers an opportunity to engage the core competencies of the private and public sectors, combining the efficiency of market discipline with the benefit of public direction, assets and regulatory control.  

Broadly, it is proposed that central government will work together with local authorities to identify potential areas for urban development, which will be led by an urban development authority (UDA).  UDAs may then act as the developer to deliver the project or, alternatively, may delegate those functions to a lead development entity.  An Order in Council would identify each project and its strategic objectives (which become the primary consideration for decision making) in addition to establishing the UDA and allocating its development powers, which are to be selected from a “tool kit” of available powers including land acquisition, planning powers, powers relating to infrastructure and access to financing tools.  The UDA would then engage with the community to draft a development plan to govern the project’s implementation. 

Public consultation on the proposal closed in May this year and, subject to September’s election, we anticipate a Bill early next year.  With the Bill yet to be drafted, and several reviews of the discussion document already in circulation, this article does not purport to closely examine the detail of the proposal.  Rather, the intent of this piece is to consider the opportunities the proposal presents, drawing inspiration from recent examples and successful alternative proposals both locally and further afield.  

The opportunity

The advantages for a nation when its cities are successful are myriad.  Thriving cities invite international investment, attract and retain highly-skilled workers, support industry, draw tourism, encourage arts and culture, and create opportunities for education, research and innovation. The result is a stimulated economy.  Less often acknowledged are the environmental benefits – compact cities reduce pressure on ecological systems overall, create efficiencies, and enable a more sustainable consumption of resources than can occur in a widely distributed pattern of settlement.



Within the existing RMA framework, however, it has been difficult to acknowledge these benefits and to address the pressure that population growth is placing on our cities.  While recent Productivity Commission reports and other Government initiatives (including Special Housing legislation, amendments to the RMA and the NPS-UDC) have served to highlight the challenges, questioning the ability of the RMA to successfully deliver large scale urban projects is not unique to the present Government.  The possibility of urban development authorities has been raised on numerous occasions over the past decade.  Reports in 2006, 2008 and 2009 (commissioned by the Labour-led government) all broadly identified the prospect of such entities designed to co-ordinate large-scale, integrated development – both to respond to challenges associated with New Zealand’s growing (and increasingly urbanised) population and to maximise opportunities for economic growth as our cities begin to compete on the world stage.  As part of its current election campaign, Labour is also proposing the establishment of what is essentially a housing specific urban development authority, known as the “Affordable Housing Authority”.  

The difficulty with the existing framework is the sheer breadth of issues that the RMA and its subsidiary documents seek to address.  Historic heritage, Te hononga a te iwi Māori me to taiao, the natural environment, infrastructure, effects associated with built form and development – the RMA and the various plans developed in accordance with its purpose and principles attempt to serve many masters. 

Recent plan development processes in Christchurch and Auckland demonstrate this challenge all too well.  Considering Auckland’s recently operative Unitary Plan, the end result of a condensed process involving input from thousands of individuals and interest groups, one must acknowledge that the final product was a significant achievement in itself.  However it cannot help but be general in its application – the ability to achieve strategic site specific goals throughout the process was very limited (particularly given that very little time was allocated to consider submissions relating to individual sites or precincts).  Rather than replacing or eroding the existing RMA framework, or carefully developed plans such as this, the UDA proposal offers an opportunity to introduce a supplementary planning regime which can be deployed when the need to elevate strategic objectives in the urban context can be justified.  

While the proposal would shift the balance of assessment towards the strategic objectives of the particular project (with those objectives prioritised over Part 2 and section 104 matters), it does not necessarily follow 
that environmental or community outcomes would be compromised as a result.  Instead, the often prohibitive complexity generated by the prioritisation of RMA matters over other important objectives in the delivery of urban regeneration projects is precisely the mischief that this proposal is seeking to address.  Provided (among other matters) opportunities are afforded for appropriate public participation (a matter we discuss further below), there are, in our opinion, instances where it may well be appropriate for local and central government to determine that a particular strategic outcome needs to trump other concerns – whether that be the regeneration of an earthquake affected city, a housing shortage affecting thousands, the slow decline of an urban centre, or the need to support a significant transport project with co-located intensification. 
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International experience has shown there are a number of key “ingredients” required for a project to be successfully undertaken by an UDA and, as such, these should inform (and ultimately limit) the instances where the use of the UDA model is appropriate.  Identified by a Brookings Institution report as a global model for achieving urban renewal, the Copenhagen City and Port Development Corporation is currently leading the large scale regeneration of a section of Copenhagen’s waterfront called Nordhavn.   The Corporation is jointly owned by the city of Copenhagen and the Danish national government.  In addition to Nordhavn, the Corporation has successfully led the transformation of a number of formerly dilapidated urban areas throughout Copenhagen (including Ørestad pictured above), contributing to well over half of the regeneration projects in the city.  The model it has adopted generally operates as follows:

• National and local government transfer available assets (usually land) to the Corporation.  
• Local government rezones the land for the appropriate use (i.e. residential or commercial).
• The land increases in value.
• The Corporation leverages low cost financing (enabled by the City’s strong credit rating) against the increased value of the land.
• Financing is used to install infrastructure (or in some instances transit) to enable development of the land.
• Development of the land is facilitated through various mechanisms including land sales, lease agreements with developers and, in some cases, development of the land by the Corporation itself.  
• Development generates revenue to service debt.

• Local authorities must agree with central government that a qualifying project should proceed in their district.  The investigation of a potential project can be initiated by the private sector or even by a community group, for example in the case of local project with widespread support.
• During the initial assessment of a potential project, early engagement will occur with landowners, iwi and other stakeholders.
• If the initial assessment makes a case for a proposed development project, pre-establishment consultation will occur, to seek the public’s feedback on, amongst other things, the strategic objectives of the project and any specific public good outcomes.
• Once a project is established, the UDA must develop and publish a draft development plan, and can amend the draft development plan in response to public submissions.
• Affected persons can object by way of written submission to the final recommended development plan.