This judgment considered the regime for the compulsory purchase
of land in the Christchurch CBD by the Minister for Canterbury
Earthquake Recovery (Minister).
Ace Developments Ltd owns land on Moorhouse Avenue
(property). The property is leased to Ace Sales
Ltd, which operates a car dealership.
After the Christchurch earthquakes, the Christchurch Central
Recovery Plan was prepared. The Recovery Plan identified a number
of precincts and anchor projects to be built in the city. The site
for one of the anchor projects, the Metro Sports Facility, includes
Negotiations took place between the Canterbury Earthquake
Recovery Authority (CERA) and Ace Developments as
to a possible purchase of the property, but the negotiations proved
The Minister has served a notice of intention to take land on
The claim and counterclaim
The Minister issued proceedings against Ace Developments,
asserting that the Crown is entitled to vacant possession of the
property. A dispute arose over whether the Crown was entitled to
possession of the property before compensation issues were
Ace Developments claimed that the Minister was required to make
a formal offer of compensation, and that the offer should be not
less than $3.3 million, being the amount of a valuation obtained by
Ace Sales claimed that it (in addition to Ace Developments)
should have been served with the notice of intention to take land,
and that it is entitled to remain on the property until
compensation is agreed.
Compulsory acquisition and vacant possession
The procedure for compulsorily acquiring land is set out in the
Canterbury Earthquake Recovery Act 2011 (CER Act).
It provides that the Minister can serve a notice of intention on
the owners of the land and on other people with a registered
interest in the land, and publish a public notice to that effect.
The Minister can then publish a Proclamation to compulsorily
acquire the land. Title to the land then automatically vests in the
Minister fourteen days after the Proclamation is published.
The CER Act then provides that if an owner or occupier fails to
give vacant possession of land specified in a Proclamation within
one month, the Minister may seek an order for vacant possession
from the High Court.
Associate Judge Osborne found that the process to take land had
been conducted properly. There was no requirement, as contended by
Ace Sales, to serve the notice of intention on a person with an
unregistered interest in the property (such as a lease). He decided
"The combined effect of s 55(6)
CER Act and the steps indisputably taken by the Crown is that the
property on 14 August 2014 became absolutely vested in fee simple
in the Crown and freed from all mortgages, charges, claims,
estates, or interests of whatever kind.
Section 57 CER Act entitled the
Minister to seek an order directing Ace Developments (as owner or
occupier) to give vacant possession of the property if, as owner or
occupier, it failed to give such vacant possession."
Compensation – offer or claim?
Again, the procedure for compensation is set out in the CER Act.
This provides that a properly completed claim form must be lodged
by the person seeking compensation, and the Minister will determine
whether compensation is payable, and the amount to be paid. This
procedure can be contrasted with that in the Public Works Act 1981
(PW Act), which has two alternative processes, one
for a claim to be made, and the other for an offer to be made by
the person acquiring the land.
In this case, Ace Developments and Ace Sales both asked for the
Minister to make an offer for payment of compensation.
Associate Judge Osborne decided that the CER Act procedure can
operate without incorporating the PW Act, and that the
"Minister is not required to make an offer of compensation to
He also noted that the Minister should not be bound to a minimum
compensation figure based on an earlier offer from CERA:
"the determination of
compensation is a matter which Parliament has entrusted to the
Minister... it is not open to this Court to conclude in a summary
judgment setting that a position which CERA was prepared to adopt
for the purposes of a negotiated settlement amounts implicitly to a
conclusion (or some form of informal determination) by the Minister
himself as to what constitutes the appropriate compensation by
reference to s 64 CER Act and to the relevant provisions of Part 5
Associate Judge Osborne therefore decided that the Minister was
entitled to an order for vacant possession of the property. Ace
Developments and Ace Sales should submit completed claim forms, so
that the Minister can determine their claims for compensation.
Please briefly describe the main laws that govern real estate in your jurisdiction.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).