Compensation claims under the act must meet specific statutory criteria
The Court of Appeal dismissed an appeal seeking $3.67 million in additional compensation for losses during the "shadow period" before properties were acquired for a public works project.
The court reaffirmed that compensation claims under the Public Works Act must meet specific statutory criteria and rejected the appellant, Casata Limited's, claim for additional compensation of $3,670,900.
The dispute arose after Waka Kotahi (New Zealand Transport Agency) announced the Petone–Grenada Link Road project in February 2014, casting uncertainty over Casata’s properties in Petone. Casata claimed the announcement disrupted its ability to redevelop or sell the properties and reinvest, resulting in significant financial losses.
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Casata sought additional compensation beyond the agreed market value for the properties, asserting that the shadow period effectively suspended its property rights.
The court upheld earlier rulings, finding that Casata had failed to prove the alleged losses were compensable under the act. The court ruled that compensation under s. 60(1)(c) requires actual damage to the land resulting from the exercise of statutory powers, not economic impacts on the owner’s ability to use or sell the land. It emphasized that the “shadow period” effects did not constitute physical interference or damage to the properties.
The appeal court also highlighted s. 62(1)(c), which requires that land value assessments exclude any reduction caused by the prospect of a public work. This provision ensures owners are compensated based on unaffected market value, which Casata had already received.
The court found that Casata’s claim did not meet the criteria for disturbance payments under s. 66, which covers specific costs incurred due to displacement, such as moving expenses or lost improvements. Casata’s claim for business losses was deemed intertwined with the value of the land, which had already been compensated.
The court’s decision underscored the narrow scope for shadow period compensation under the Public Works Act. According to the court, claims must align with the statutory definitions of damage or disturbance, and losses tied to market value adjustments are generally excluded.