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OceanaGold (New Zealand) Ltd (OceanaGold) has recently had declined an application under the Overseas Investment Act 2005 (OIA) to acquire 178 hectares of rural land for the purposes of use as storage of mine tailings (the Application). The establishment of the additional mine tailings capacity was to extend the life of the Waihi mine from 2028 until 2036 by allowing OceanaGold to proceed with its new mining project “Project Quattro”. The decline came as a surprise to the applicant and the industry and does raise some question marks...
OceanaGold (New Zealand) Ltd (OceanaGold) has recently had declined an application under the Overseas Investment Act 2005 (OIA) to acquire 178 hectares of rural land for the purposes of use as storage of mine tailings (the Application). The establishment of the additional mine tailings capacity was to extend the life of the Waihi mine from 2028 until 2036 by allowing OceanaGold to proceed with its new mining project “Project Quattro”. The decline came as a surprise to the applicant and the industry and does raise some question marks.
As the application was in respect of the purchase of land, section 24(1)(a) of the OIA required a decision to be made by the two Ministers. Minister Clark granted the Application but Minister Sage declined it, meaning that of necessity the Application was declined. The Overseas Investment Office itself had recommended the Application be granted. Under section 16A of the OIA, the Ministers must consider whether the Application meets the Benefit to New Zealand test. As the Application involved rural land, it was subject to the higher standard of a ‘substantial and identifiable’ benefit having to be shown, as against other counterfactual uses. When making their respective decisions, both Ministers considered a number of factors identified to be of high relative importance, including jobs; new technology or business skills; increased exports receipts; increased processing of primary products; and the oversight and participation of New Zealanders’. Minister Sage, in declining the Application, determined that converting the land into a waste-storage area for the by-product of a non-renewable extractive industry reduces any economic benefit from the Application. This determination led the Minister to conclude that the overall short term financial benefits are inconsistent with sustainable economic interests. The assessment of a net negative benefit to New Zealand is novel in the sense that here, the Minister has effectively deducted points for a use of the land that is contrary to government policy. Two different decisions by Ministers of the same coalition government will always raise questions of impartiality in decision making, but in this instance in particular questions have been raised by the mining industry body Straterra and the Hauraki District Council about the Minister’s history of activism against mining and have questioned whether she should have recused herself and delegated the decision making power, an option available under section 32 of the OIA. She has previously done so, on other grounds. As with any decision made by a Minister, OceanaGold has the option of judicial review of the decision. Predetermination of an outcome of a decision, or bias, can be grounds for a decision to be judicially reviewed as can an incorrect application of the Benefit to New Zealand test under the OIA. These are both avenues OceanaGold may look to take as it assesses the impacts this decision will have on its future expansion plans.
The Local Government (Community Well-being) Amendment Act 2019 (Amendment Act) came into force on Tuesday 14 May 2019. It amends the Local Government Act 2002 (LGA ’02)...
The Local Government (Community Well-being) Amendment Act 2019 (Amendment Act) came into force on Tuesday 14 May 2019. It amends the Local Government Act 2002 (LGA ’02).
The Amendment Act (accessible here) makes three primary changes to the LGA ’02:
On 5 April 2019, the Minister for the Environment released the long awaited National Planning Standards as part of his keynote speech at the NZPI Conference. The standards were gazetted on 5 April 2019 and take effect on Friday 5 May 2019...
On 5 April 2019, the Minister for the Environment released the long awaited National Planning Standards as part of his keynote speech at the NZPI Conference. The standards were gazetted on 5 April 2019 and take effect on Friday 5 May 2019.
In our previous article we provided an overview of the draft National Planning Standards where we accepted that the principle of standardisation had merit but raised concerns about the practicalities of implementing a one sized fits all approach.That view was shared by many submitters during the consultation period with a total of 201 submissions made on the draft standards (57 submissions were made by local authorities and 70 by business/industry). Of those submissions, two-thirds reportedly expressed support in principle or in part for the planning standards, however almost all submissions requested changes.The resultant changes are significant and we think they will provide real assistance in implementation. Some challenges will of course remain as is to be expected in a procedural shift of this nature but overall we are hopeful the advantages of standardisation will outweigh the teething pains. Of course with implementation over an extended period, it will be some considerable time before a judgement on that matter can be made.Read our full review here - https://app.box.com/s/8678u515gbxxt0vq5luby3rg1pa0lccp
A seismic event in NZ’s property market occurred in November last year. More like a slow slip quake than a sudden jolt, the November 2018 update to the guidelines for seismic assessment of existing buildings went largely unnoticed by many in the property industry. The effects, however, are now beginning to be felt, with the recent closure of Wellington Central Library and the assessment of its floors at just 20%NBS being one of the first publicly visible signs...
A seismic event in NZ’s property market occurred in November last year. More like a slow slip quake than a sudden jolt, the November 2018 update to the guidelines for seismic assessment of existing buildings went largely unnoticed by many in the property industry. The effects, however, are now beginning to be felt, with the recent closure of Wellington Central Library and the assessment of its floors at just 20%NBS being one of the first publicly visible signs.
To appreciate what has happened and where this will lead, it’s helpful to first understand the legal and engineering framework within which seismic assessments of buildings are made. The starting point here is the guidelines for The Seismic Assessment of Existing Buildings (Guidelines), which detail the technical basis on which engineers carry out seismic assessments of existing buildings. In basic terms, the Guidelines govern how seismic engineers review a building to arrive at a robust assessment of its “%NBS” – the all important percentage of the “new building standard” that an existing building achieves.This process and the outcomes are hugely important because a %NBS rating (almost universally misunderstood by property advisors and lawyers alike) has become a proxy for seismic safety. As a result, %NBS underpins acquisition, development and leasing decisions and is a key consideration for many Crown agencies and corporates in their property strategies and health and safety assessments. The Guidelines also form part of the EPB (earthquake prone building) methodology produced by the Ministry of Business, Innovation and Employment, by which territorial authorities are required to identify earthquake-prone buildings.When version 1 of the Guidelines was first released in July 2017 (superseding guidance from 2006), it was seen as a significant step forward. The Guidelines were an extensive revision by industry experts of earlier thinking and incorporated a wealth of research, knowledge and experience obtained from the significant New Zealand earthquakes between 2010 and 2016 – a period which included the Christchurch, Seddon and Kaikoura earthquakes. As such, and with one critical exception, the Guidelines represented the latest understandings on the seismic behaviour of existing buildings.That one critical exception was Section C5 of the Guidelines, a section governing the detailed seismic assessments of concrete buildings. With the timing of the general release of the Guidelines in mid-2017, it simply wasn’t possible to include new guidance on a range of matters, including assessing precast concrete floor systems to take account of new knowledge from the Kaikoura earthquake, and to respond to recommendations made in the Statistics House investigation. However, this was remedied in November 2018 with the release of a new Section C5 (version 1A), and the slow slip quake in the market began.The revisions to Section C5 are numerous, with changes addressing: material strength, “single crack” scenarios in concrete members, deformation limits due to buckling of walls and columns, limiting conditions leading to the loss of gravity support in columns, slab-column connections and walls, and strength degradation for lightly reinforced joints. None of that appears particularly reassuring to the untrained eye but, more significantly, there is also a complete revision of the guidance detailing the assessment of precast concrete floors – that is, precast concrete hollow-core, double-tee, rib and infill, and flat slab floor units, all of which have been relatively common methods of floor construction since the 1980s.In relation to precast floors, the new Appendix C5E records in unemotive engineering prose that, in an earthquake, it is possible for “unseating” of precast floors to occur (that is, precast floors may fall off their supporting ledges within the building frame) and that precast floors can be particularly susceptible to damage that has the effect of “compromising gravity load support” (that is, precast floors may collapse). Appendix C5E goes on to state that “For buildings with older support detailing, the limiting drift at failure of the precast floors is likely to be less than the limiting drift for the frame and may govern the earthquake rating for the building as a whole.” Translated, this means that precast floors may fail before the building frame itself and, if that is the case for your building, then its %NBS will diminish to that earlier point of failure.While the devil is very much in the engineering detail, the practical effect of the changes to Section C5 of the Guidelines is that the %NBS of many relatively new buildings with precast floors is likely to fall. There are many such buildings in New Zealand but, of the larger centres, Wellington, Napier, Hastings and Palmerston North are likely to be disproportionately affected due to their higher “Z-values”, being the seismic risk factors applicable to those regions.How much lower the %NBS numbers will go is, of course, a key issue, as is whether buildings remain safe. These assessments in turn depend on a range of factors relating to a particular building, including the type of floor and the flexibility of the building frame. You will need an engineer to tell you but, for some buildings, the %NBS drop may be significant. While it hasn’t been highlighted in reporting to date, Aurecon New Zealand Limited’s assessment of Wellington Central Library, is “that the hollowcore precast floor system… achieves a score of 20%NBS” – this for a building that opened in 1991.Of course, not all buildings will be affected like Wellington Central Library and, for some buildings, a small %NBS decrease may not be material. However, for owners, tenants, funders and insurers of a 70%NBS structure, a 15-20% drop may well have major ramifications. Where a change in %NBS crosses a critical threshold for a party, their options will, as ever, be constrained by their existing contracts and the availability of alternatives.Weaknesses in leasing documents will also be exposed. The standard ADLS deed of lease, for example, does not address seismic standards and a number of leases with negotiated seismic covenants require there to be an earthquake of a minimum magnitude before the tenant can even access rights related to the %NBS of the building. Neither position is advisable. However, even where a tenant has a contractual escape route, its options will be practically limited by the availability of alternative premises and business continuity requirements.A further issue is how or whether affected parties will even know that the %NBS of the building has fallen. In the absence of an earthquake, few tenants will have cause to consider the accuracy of historical seismic reports. The statutory framework also provides little comfort; while territorial authorities are tasked with identifying potentially earthquake prone buildings, these are only buildings below 34%NBS and, even then, for at least an interim period of 18-24 months, those “EPB” assessments must continue to be made using the old Section C5 of the Guidelines. This means that for earthquake prone building purposes there may well be “false negatives” – i.e. %NBS ratings above those supported by the latest engineering knowledge. Beyond the earthquake prone building framework, there is generally no incentive or legal requirement for landlords to seek assessments that may indicate things have changed for the worse, or to disclose these if they are obtained.Even less likely is that owners, outside local or central government, will close their buildings and, other than in the most extreme cases, there is no legal requirement for them to do so. In the case of Wellington Central Library, where engineers identified that “the potential loss of seating of the hollowcore units presents a significant hazard and potential risk to building occupants following a significant earthquake event”. Mayor Justin Lester observed that "We're not legally obliged to close this building, we are morally obliged”. Not all building owners will see it the same way.Those concerned about their buildings should seek information from engineers and owners and take engineering and, potentially, legal advice. Next steps can then be informed by reference to assessed risk, existing contractual positions and organisational health and safety policies and obligations.Doran Wyatt is a Partner with expertise in seismic matters, leasing and developments. He acts for a range of Crown agencies and institutional investors and is based in Greenwood Roche’s Wellington office. The content in this article is not legal advice. Our team would be happy to assist with any specific issues.
Lauren Semple, who leads our Resource Management Team presented at the Property Council Residential Development Summit in February 2019. ..
Lauren Semple, who leads our Resource Management Team presented at the Property Council Residential Development Summit in February 2019.
Some philosophical issues to sort out with an Urban Development Authority model based on our experiences in Christchurch. If coming to the end of the use of such powers in Christchurch is seen as a “return to local leadership” does it follow that the use of such powers in the first place is an affront to local democracy? And how does that fit with the intention to deliver national UDA legislation. Good conversation starter. Want to know more, please do not hesitate to contact Lauren Semple or our Resource Management team.
Lauren Semple presented a paper as part of the NZCLE Workshop on Subdivisions. This paper considers the wider context of subdivision and land development and reflects on some of the tools, requirements and alternative processes which can influence the way projects take shape. ..
Lauren Semple presented a paper as part of the NZCLE Workshop on Subdivisions. This paper considers the wider context of subdivision and land development and reflects on some of the tools, requirements and alternative processes which can influence the way projects take shape.
It first looks at a number of the alternative legislative schemes set up in recent years to fast track development (including subdivision), and considers some of the lessons from these examples which may usefully inform future legislation including the much touted but not yet here urban development authority approach. It touches on the role of, and tools available to, local authorities under the Local Government Act in relation to subdivisions, including the use of development contributions and development agreements to service growth and asks whether our preoccupation with new tools might prevent us from effectively utilising the tools we already have. Download the paper here - https://app.box.com/s/58174muot1x5y7b53t8imgxd4d5l5frd
For the past two years, we have been advising Regenerate Christchurch on the development of the Otakaro Avon River Corridor Regeneration Plan.
For the past two years, we have been advising Regenerate Christchurch on the development of the Otakaro Avon River Corridor Regeneration Plan.
The Draft Plan was released for consultation on 14 November 2018 with submissions due by 5pm on 19 December 2018. You can find a copy of the draft plan here - http://engage.regeneratechristchurch.nz/accessible-draft-oarc-regeneration-plan-homepage
We are pleased to continue to support the Property Council New Zealand Wellington Property People Awards which recognise and celebrate excellence in property in Wellington...
We are pleased to continue to support the Property Council New Zealand Wellington Property People Awards which recognise and celebrate excellence in property in Wellington.
Wellington Partner, Doran Wyatt had the honour of presenting the Greenwood Roche Supreme Award as part of the event on 11 October 2018.Congratulations to McKee Fehl Constructors Ltd, this year’s winner of the Greenwood Roche Supreme Award, for the Press Hall 80 Willis Street / 22 Boulcott Street project. What stood out for the judges was the ability of McKee Fehl to repurpose and modernise the Press Hall site. The end result is an iconic development that adds vibrancy to Wellington but also respects the heritage of the original building. The testimonials for this project summed it up:
The Government has confirmed the introduction of a national Housing and Urban Development Authority (HUDA) equipped with the tools to by-pass standard legislative processes and streamline urban development projects. The announcement follows numerous recommendations in various reports over the past decade and the release of the Urban Development Authorities: Discussion Document last year...
The Government has confirmed the introduction of a national Housing and Urban Development Authority (HUDA) equipped with the tools to by-pass standard legislative processes and streamline urban development projects. The announcement follows numerous recommendations in various reports over the past decade and the release of the Urban Development Authorities: Discussion Document last year.
Eligible urban development projects will include the provision of new public, affordable and Kiwibuild housing, as well as transport links, commercial and industrial developments, infrastructure and supporting community facilities (schools, pools, open spaces and libraries). The HUDA will also absorb the function of Housing New Zealand as the landlord for public housing in New Zealand. Read more here: https://app.box.com/s/2kjey5enswm7x08itfis3knzokz67t8o
The Land Transfer Act 2017 (Act) came into force on Monday, 12 November 2018. It repealed the Land Transfer Act 1952 (Old Act), and is intended to modernise, simplify and consolidate the Old Act and its amendments. The Act also made amendments to the Property Law Act 2007 (PLA), including the introduction of covenants in gross, with effect from 12 November 2018.
The Land Transfer Act 2017 (Act) came into force on Monday, 12 November 2018. It repealed the Land Transfer Act 1952 (Old Act), and is intended to modernise, simplify and consolidate the Old Act and its amendments.
The Act also made amendments to the Property Law Act 2007 (PLA), including the introduction of covenants in gross, with effect from 12 November 2018.
In the main, the Act is not intended to change our land transfer laws substantially. However, some controversy exists regarding the right of an owner to reclaim title under the manifest injustice provisions, arguably eroding the principle of indefeasibility of title. Also, not all changes promoted during consultation have been adopted, such as placing more onus on mortgagees to verify the identify of their clients, separately defining encumbrances from mortgages, and permitting senior legal executives to certify and sign instruments in Landonline. Some key changes are set out below. New terminologyThe Act includes new terminology aimed at modernising the language used. For example, a “certificate of title” and the clumsy “computer freehold/leasehold/interest register” has become the crisper “record of title”, and “registered proprietor” has become “registered owner”. There is also a concept of “replacement lease”, which is a renewed lease or a new lease in substitution for a prior lease between the same parties and relating to the same land. Withholding information for a person’s safetyThe Registrar-General of Land is able to refuse to provide a copy of an instrument or a record of title that identifies a person, or to include those details on the register in the first place, if the Register is satisfied that the information discloses or is likely to disclose the person’s location and prejudice their safety. CaveatsThere is now an express right for an owner of an estate or interest in land to lodge a caveat against their own title where there is a real risk of fraud. Guaranteed title searchesGuaranteed searches back up the security of the land transfer system, by providing a right to compensation if a purchaser of an interest in a land transaction suffers loss due to the registration of a competing interest. Under the Old Act, the purchaser had to obtain a “guaranteed search” within 14 days before settling the transaction, and had to lodge the transaction documents within 2 months after settlement. The Act updates these periods to reflect the electronic nature of land transactions by: