$1 for a lifestyle block
Frontline pandemic doctors battle for fair compensation after Hamilton City Council’s meagre offer for their land, writes Natalie Akoorie
On the outskirts of Hamilton, on a quiet country road flanked by prime farmland and sought-after lifestyle blocks, a battle is brewing.
As trees are cut down and surveyors mark the land where the narrow Peacockes Rd will be widened, some of the residents prepare to go to court.
On one of the blocks are doctors Scott Robinson and Cat Chang and their 7-year-old daughter, Maia Robinson.
The 2.4 ha property they bought in 2009 is an escape from their busy jobs at Waikato Hospital. Robinson, an anaesthetist and Chang, a respiratory specialist at Waikato Hospital, are on the frontline of Waikato District Health Board’s response to the Covid19 pandemic.
While Chang led the DHB’s critical incident management team set up to deal with the virus, Minister for Land Information Eugenie Sage and Governor-General Dame Patsy Reddy signed a land proclamation approving Hamilton City Council’s acquisition of almost 5000sq m of the couple’s land.
The council needs it to widen the road to make way for an 8000-house subdivision in the area, a 30-year project granted a $180 million, 10-year interest-free loan under the Government’s Housing Infrastructure Fund and supported by $110 million in NZ Transport Agency subsidies.
The new road will be a major arterial route in the Southern Links project — which includes a $150m bridge joining the southern end of the city to the suburb.
The council has now acquired land on 23 of the 39 properties affected by the road designation and expect two more properties to be settled by agreement within the next few days.
But the residents’ argument is not about the medium density subdivision planned for their quiet country road — there’s no doubting the need for affordable housing. It’s the fact vast chunks of private land are being taken by authorities without payment — or for little payment — a concept New Zealanders have been paying to set right for decades.
Robinson and Chang have been offered $1 by the council for a portion of their land big enough to be a lifestyle block on its own, despite the land’s potential worth of half a million dollars on the open market.
The case is so unusual that Sage has instructed officials to review the law that applies to compulsory acquisition next time the Public Works Act is renewed.
ROBINSON AND Chang are preparing to fight for compensation in the Land Valuation Tribunal.
Robinson acknowledges the need for the subdivision but says the $1 compensation for his land is shocking and distressing, saying it came out of the blue when the widened road was designated to cut across their 2ha property.
“We had to pay money to buy the land. We had to pay rates on it and we’ve farmed it. Suddenly someone can just take it off you and not pay anything at all and that’s fair and legal?”
He says it is insulting and alarming that a council can “get away” with taking land for almost nothing.
A valuation done for the council estimates Robinson’s remaining land would be worth $282,500 more than it is now, due to betterment, an increase in value thanks to the water and sewerage infrastructure to be built with the new road and the increased subdivision potential.
But the couple would have to sell the entire property or subdivide at a cost of $130,000 per lot, neither of which they want to do, to realise the value of the betterment.
Council strategic development manager Andrew Parsons says the council has worked with expert planners and lawyers to ensure the Public Works Act1981 has been followed.
The Act provides for the payment of compensation for losses arising from the acquisition of land by the Crown and its authorities.
Parsons says what the landowner chooses to do with the property in the future is not a matter for the council and outside the scope of the Act.
He adds that the cost of subdivision was factored into the valuation.
“The valuation shows the landowner has benefited from an increase in the value as a result of the public works.
“In this case, that independent valuation has determined the owners will receive an increase in their asset value of $282,500 due to the works done by the council, regardless of what they choose to do in the future.
“It is this value that has been used to assess betterment.”
He says the basic premise of the Act is that the landowner is not financially worse off through the land acquisition process. “In this instance the information the council has received indicates the landowners are substantially better off.”
The $1 offer, made on behalf of the council by The Property Group, is a nominal amount required by law to make any contractual arrangements binding.
He says the council has not received a valuation from the trust that owns Robinson and Chang’s property but the council has paid more than $30,000 toward independent, professional advice to ensure the owners are properly informed, as is required under the Act.
“In determining how much to pay for this land, council is mindful of its obligation to spend ratepayer funds sensibly, and in accordance with its legal obligations,” Parsons says.
DOWN THE road, Cam and Margot Buchanan’s sloping section looks out over a pool, a small vineyard planted by the previous owners, trees they have planted and stockyards their children played on as youngsters.
Below that is the road, which when widened will eat into almost a quarter of that space.
The couple are also fighting the council’s compulsory acquisition.
The Buchanans, both anaesthetists at Waikato Hospital and also involved in the Covid-19 response, say the council’s zero-compensation offer is farcical.
It initially wanted 1279sq m but has since offered to take less of the land and retain a tree of significance to the family.
“It feels like theft,” Margot says. “All landowners should be worried about this approach by our council. Who knows where they will attempt it next.”
The pair bought the 6605sq m block in 2005 and planted, landscaped, mowed, maintained and paid rates on it.
They believe the land in question is worth several hundred thousand dollars but the council maintains the road widening and infrastructure for the subdivision adds value to the property, also giving them a betterment.
“They say reticulated water and sewerage infrastructure means we will be able to subdivide our property, which makes it more valuable,” Margot says.
“But we’ve already got a road and we’ve already got water.”
Even if subdivision is allowed in the future, which is not guaranteed, the house sits in the middle of the property making development potential minimal, she says.
But the Buchanans’ lawyer, Thomas Gibbons — who is also acting on behalf of Robinson and other affected landowners — says the council has failed to show the connection between the works and any betterment, which is required under the Act.
Gibbons describes the planning advice the council used to refuse compensation as vague, flawed and fundamentally unfair and says the case could warrant judicial review.
A valuation done for the council, dated July 1, 2019, made a betterment assessment on the Buchanans’ property of $50,000 and gave before and after works valuations as $1.3m and $1.45m respectively.
Gibbons says it appears the council intended to acquire the whole of the roading corridor designated, even though not all of it was needed.
Any surplus land could later be sold back to land owners at market value.
“This allows a rather concerning inference that council intends to compulsorily acquire land from you for zero compensation, knowing that the infrastructure is of no real benefit to you, that you will suffer significant loss of amenity, that the council does not need all of the land and then intends to offer the land back to you at
market value.
“This would mean that council would essentially profit from acquiring land it does not need with no actual benefit to you.”
He said the “interests of all of council’s ratepayers” was not a recognisable phrase under the Public Works Act and nor was it all of council’s ratepayers who faced having their property compulsorily appropriated for a work of general public benefit.
“It does appear, however, that council is comfortable paying a range of consultants, presumably from ratepayer money, rather than making a reasonable offer.”
Cam Buchanan says it appears the Land Valuation Tribunal is now their only option.
“One of our objectives is to create some case law that deters Hamilton City Council and others from pursuing this option.”
THE COUNCIL has hired a Queen’s Counsel, Matthew Casey, to answer a technical question about the betterment, raised by the Buchanans and other affected property owners.
Parsons says the council does not have an agenda to pay the lowest compensation possible, or to treat any landowner unfairly.
He says the council does not doubt the new road and associated infrastructure would significantly add value to the Buchanans’ property.
The Buchanans invited chief executive Richard Briggs and mayor Paula Southgate to their home to understand the implications of the acquisition.
Southgate declined, accepted, and declined again saying it was not a governance matter.
“Unfortunately, it’s not a question of whether or not it’s fair,” she told the
in a statement. “Council must follow very clear legislative processes … and we have done that.
“I would note that council staff have been working with all property owners since late 2018 and in a number of cases have reached solutions with individual property owners and I have supported this.”
Asked if the council’s valuation of Robinson’s property is now unreliable because of the expected downturn in property prices due to Covid-19, Parsons says the council will review its valuation when the landowners provided their valuation.
“However, it is noted that the betterment value uplift already assessed by independent valuation is so large that it would take a considerable overall loss in value arising from economic impacts from the Covid-19 pandemic to offset the financial gains already established.”
PROPERTY RECORDS show the council purchased a house opposite the Buchanans’ in July 2017 for $820,000. The capital value of the 5084sq m property was $500,000 at the time.
Owner Jo Bailey says the purchase price was market value.
She and her husband had owned the house, the original Peacockes farm cottage, for 25 years and were married on the front lawn.
They did not want to leave what she says was a tight-knit community until the road designation carved it up, but the new road would have come within 4m of their house.
“We had expected our property to be our retirement plan but because of the road... It would have been our nest egg but it didn't turn out that way.”
Eighteen months later the council bought another property on Peacockes Rd, this time for $95,000 above capital value. The 2.1ha property was four times as big as Bailey’s, with a slightly smaller 140sq m house.
It had a capital valuation of $905,000 when the council bought it from elderly widow June Douglas for $1 million in January last year. Son Hugh Douglas tells the
Weekend Herald his 80-year-old mother always believed the 2ha property could be subdivided and her independent valuation had factored that in.
However, he said the council’s valuation, in complete contrast to those done on the Buchanan and Robinson properties, did not factor in subdivision potential — meaning the property, her nest egg for retirement, was worth less.
“The valuation couldn’t factor in any potential for development because there was no guarantee there was going to be a development, which is the opposite of what they told Cam and Scott. “We wanted Mum to go to court and fight it and we would support her, but she said, ‘I can’t have that sort of stress at my age’.”
When asked about the difference between the negotiations, Parsons says that under the Act, betterment was only relevant for partial acquisition, such as for the Robinson and Buchanan properties.
“Where an entire property is purchased, whatever the size, the compensation is based on current market value.”
SAGE SAYS it is “very unusual” for the application of the valuation provisions in the Act, including betterment, to result in a valuation where financial compensation is not paid.
In relation to the Robinson and Chang case, she said: “There are no immediate plans to review this specific part of the PWA but this is an unusual case where the land has been assessed as increasing in value because of the infrastructure and associated development.
“I have asked officials to ensure that the PWA’s requirement for the mandatory application of the concept of betterment is reviewed as part of any future review of the Public Works Act.”
Sage says she has carefully considered the case and was assured by information from the council that proper process had been followed, before putting forward the proclamations.
“In this case the ‘balance’ land retained by the affected landowners has been assessed by the council’s registered valuers as being worth significantly more after the project is completed and higher than the value of the land to be taken.”
She says the Act requires the increase in market value of the remaining land to be deducted from the compensation that would otherwise have been paid, and that usually the betterment was claimable by the council.
“I am pleased that the council has decided to waive its right to pursue payment of betterment from the landowners.”
The minister says she appreciates the difficult situation the doctors are in and asked the council to be mindful of Covid-19 in their negotiations.
FOR THE doctors, the situation is far from the peaceful havens they have built away from their hospital work.
The Buchanans suggested council build the road through more of Bailey’s former property, opposite them, since the council now owns it.
But mounting a legal challenge to the road designation would cost the couple tens of thousands of dollars.
“It is difficult to comprehend that a governing body in New Zealand would behave in this way,” Margot Buchanan says. “It’s like a totalitarian state.”
She believes the council’s position is “morally corrupt” and says the emotional stress, coupled with Covid19 in their day jobs, was so huge that they had considered selling the whole property.
“We love this place. We raised our children here.
“We don’t want to go. But we don’t want to look at land that has been stolen from us.”
We had to pay money to buy the land. We had to pay rates on it and we’ve farmed it. Suddenly someone can just take it off you and not pay anything at all and that’s fair and legal?
Dr Scott Robinson, who is also battling Covid-19