The Parnell Terraces development has been plagued by leaks, then litigation. Photo / Michael Rehm
The Parnell Terraces development has been plagued by leaks, then litigation. Photo / Michael Rehm
The Court of Appeal has ruled in favour of a Māori landowner and against Parnell Terraces’ apartment owners in the latest decision in the long-running battle over leasehold payments for the once-leaky units that have since been remediated.
Today, Justice Edwin Wylie gave reasons why he,Justice Cameron Mander and Justice Pheroze Jagose allowed an appeal by Whai Rawa Railway Lands LP in the fight over rent for the 7054 square metres of land fronting Ronayne St, The Strand and Ngaoho Pl, where the 81-unit Parnell Terrace units stand.
The three judges struck out High Court proceedings brought by Body Corporate 201036 to either set aside or vary rent on the basis that it was either harsh or unconscionable, or had been used in a harsh or unconscionable manner.
Whai Rawa Railway Lands LP is part of Ngāti Whātua Ōrākei Whai Rawa, the commercial investment arm of Ngāti Whātua Ōrākei Trust, which bought many hectares of Quay Park and Parnell land as part of its Treaty of Waitangi settlement last decade.
The ground rent beneath Parnell Terraces is calculated at 6 per cent of the unimproved land value annually but the body corporate has challenged that, saying it’s too high.
The 150-year lease was entered into in 1997 between Whai Rawa’s predecessor, Ngāti Te Whātua Ōrākei Māori Trust Board, and Magellan Orakei, which sold the lease to Broadway Development, which developed Parnell Terraces.
The ground rent had been $740,000 a year, shared among the 81 owners, but in August 2018 that nearly doubled, hitting $1,375,530. The average annual ground rent per unit is now $16,982, owners complained in a previous court case.
Parnell Terraces are on the corner of The Strand and Roynane St. The ground beneath them is leasehold.
In April 2022, the High Court heard that case, in which Whai Rawa responded to the body corporate by applying for summary judgment against the townhouse owners. Whai Rawa lost, with the court ruling Whai Rawa had not established that the body corporate’s claims were speculative and without foundation, nor that they were utterly baseless on the evidence.
Dissatisfied with the decision, Whai Rawa sought leave to appeal last year, with its legal team headed by Davy Salmon, KC.
No substantive hearing has yet occurred
Nor did a full hearing take place in 2022 in the High Court. The judge there said the issue needed to be dealt with through discovery as part of a more substantive proceeding.
Last year, Whai Rawa argued in the Court of Appeal that there was no clear statute in law to rule on the interpretation of the body corporate’s claims. Arguments were put about whether the Residential Tenancies Act or the Unit Titles Act applied.
Dr Michael Rehm, chairman of the Parnell Terraces' body corporate and an Auckland University academic. Photo / Michael Rehm
The Court of Appeal decision released today, from an April 15 hearing, said: “We are satisfied that the High Court has no jurisdiction to grant any of the declarations sought by the body corporate in its proceeding. The issue is purely one of statutory interpretation and whatever the facts proved or arguments and policy consideration advanced at trial, the body corporate’s case is, in our view, bound to fail.
“There is no reasonably arguable cause of action disclosed by the proceeding, or case appropriate to the nature of the pleading. Accordingly, we allow the appeal and strike out the body corporate’s proceeding.”
Dr Michael Rehm, Parnell Terraces’ body corporate chairman, said today in response to the ruling: “All this has clarified is that New Zealand law has no avenue for a ground lessee like us to challenge what we feel is a grossly unfair and unjust ground lease arrangement.
“Really, this was our only hope to get a day in court. The same issues are happening with other lessees throughout Quay Park and in other leasehold situations throughout New Zealand. But as the Court of Appeal has made clear, they interpreted that this action should not be allowed. Parliament never intended us to use provisions in the law to be able to challenge things like our lease agreement.”
