The Court of Appeal has overturned decisions made by High Court judge Mark Woolford in late 2018 affecting development land at Pokeno, Auckland’s growth centre on the south side of the Bombay Hills.
Especially affected is the Synlait Milk Ltd factory, nearing completion.
Synlait chief executive Leon Clement said in a short release today: “We will take some time to review the decision and consult with various advisors.”
Land specifically affected adjoins 297ha Winstone Aggregates Ltd got consent in 2002 to quarry and, in particular, the restrictive covenants Winstone was granted in 1998 & 2000 to protect the quarrying operation from neighbours’ complaints over noise & other quarrying effects.
Winstone never used the consent, but the covenants it obtained restricted use of 9.74ha on the 2 adjoining covenanted properties to grazing, lifestyle farming & forestry.
Those covenants remained in place after Winstone sold its land, in a total 29 parcels. Fast forward to 2017 and events involving subsequent landowners: Pokeno has been developed as an outlier village, growing from a population of 500 to a potential 5000 – and perhaps more, going on the success of the initial urbanisation. It’s also gained some serious industrial development, and some of this is intended to be built alongside the quarry site.
84.5ha of the quarry land is now owned by NZ Industrial Park Ltd (Ye Qing), which bought it in late 2018 from Havelock Bluff Ltd (Garreth & Melaney Harris).
In 2017, Stonehill Trustee Ltd (Julie & Peter Bishop) bought 28ha adjoining the Industrial Park land, and about a quarter of it is subject to the restrictive covenants. The balance is, like Industrial Park’s, part of the former quarry site.
In February 2018, Stonehill agreed to sell its land to Synlait Milk Ltd – conditional on Stonehill getting the covenants removed. If they weren’t removed, Synlait’s options included cancelling the agreement or settling without prejudice to its rights, including compensation.
Neither Havelock Bluff nor Mr Ye was interested in removing the covenants. Meanwhile, Synlait obtained development consents and began building its dairy factory, which is nearing completion. Its initial capital investment, on top of the land price, was $250 million.
In 2012, Waikato District Council’s plan change 24 came into effect, rezoning the covenant-affected land industrial 2 and other Pokeno land residential, to enable the growth of the village. But Industrial Park’s land remained zone for aggregate extraction & processing, and Mr Ye said the company might yet use that zoning to provide aggregates for the Pokeno urbanisation.
In May last year, the council approved privately initiated plan change 21, rezoning a block from rural to residential 2, but putting a large lot overlay in place to provide a buffer between it & the potential quarry.
In July last year, the council notified its proposed new district plan, including rezoning Industrial Park’s quarry site as rural, which would still allow extractive industry as a discretionary activity. Stonehill’s land would be rezoned heavy industrial.
In a submission on the proposed plan, Mr Ye asked for a residential zoning on part of Industrial Park’s land, plus some adjoining it, to allow for a comprehensive development allowing about 1025 residential lots, while retaining the ability to operate a quarry.
In the High Court, Justice Woolford made a number of rulings in 2 judgments, after concluding that the covenants should be modified. He found the use of the covenanted land had changed beyond recognition. It had been rezoned industrial 2 and the covenants prescribed a use inconsistent with its present zoning & use.
Change of use meant the covenants would have virtually no effect on any application to “build a quarry”, as the Appeal bench described it. Justice Woolford also found it incongruous to retain 8ha of grazing land in the middle of an industrial 2 zone.
However, the Appeal Court bench – Appeals judge Murray Gilbert with 2 High Court judges, Justices Ed Wylie & Susan Thomas – concluded Justice Woolford was wrong in his finding that extinguishing or modifying the covenants to permit the Synlait dairy factory to operate wouldn’t substantially injure Industrial Park if it decided to quarry.
The Appeal Court bench said air discharge consents would be harder to obtain because of the dairy factory’s sensitivity to contaminants, including dust, and ordered that the covenants be reinstated. Various rulings on costs & damages followed.
Court of Appeal, 9 May 2019: New Zealand Industrial Park Ltd v Stonehill Trustee Ltd
7 March 2014: Shanghai Pengxin’s Synlait Farms takeover goes unconditional
1 September 2013: Yashili gets consent for Pokeno dairy plant
28 December 2008: Council creates new plan change for Pokeno
9 December 2007: Pokeno growth MoU signed
Attribution: Judgment, Synlait release.