Resource Management: Kawarau Jet v. Queenstown Lakes

Kawarau Jet Services fought hard to prevent a competitor breaking its monopoly on tourist operations down the Kawarau River near Queenstown.  It successfully challenged approvals given to a rival.

Over the last twenty years, jet boat operations on the Kawarau have been consolidated.  The High Court was told that Kawarau Jet Services has spent over three million dollars to buy out competitors.  The company runs eight boats on the river, and has approval to operate up to 19 boats.

In 2008, Queenstown Lakes District Council granted to newcomer, Frontier Adventure Tours, a consent to run four commercial sightseeing tours per day on the river.  This consent proved to be unlawful.  By an oversight, the Council did not send details of the application to Kawarau Jet who was entitled to be told as an “affected person”.

Jet boat operations on Queenstown rivers can be dangerous; three people were killed in 2008.

On hearing of the new rival, Kawarau Jet moved swiftly.  It contacted Maritime New Zealand to have Frontier’s consent suspended and asked it to assess safety issues potentially arising with multiple operators on the river.  Maritime New Zealand lifted the suspension after being satisfied that radio protocols between the two companies could prevent collisions.  Frontier then started operations.

The High Court was then asked to rule whether the otherwise unlawful consent granted to Frontier should be validated, or should Queenstown Lakes be required to rehear the application.  

Kawarau Jet argued that its operations were seriously compromised by having Frontier on the river.  It had to reduce the frequency of its trips to minimise the likelihood of collisions and it was unable to exercise the full number of trips allowed by its own consents.

Frontier argued that requiring the Council to rehear its application would close down Frontier’s operations despite Maritime New Zealand having approved the safety protocols.

The High Court ordered that the Council rehear the application.  There were serious safety issues.  There was evidence that Frontier had specifically told the Council that prior written approval from  Kawarua Jet was not required.  And Frontier had decided to push on and purchase a boat after it had been warned that Kawarau Jet would be taking legal action.

Kawarau Jet Services v. Queenstown Lakes – High Court, Invercargill (09.03.09)

08.09.002

Real Estate: Stevens v. Premium Real Estate

Auckland real estate firm Premium Real Estate was ordered to pay $660,000 damages and refund commission of $67,000 for failing to tell its client material information about a prospective purchaser.

During sale negotiations it was impressed on the client that the purchaser had fallen in love with the North Shore cliff-top property and wanted to occupy the home, while the agent knew that the purchaser was looking to make a quick resale at a profit.  After buying for $2.575 million, the purchaser sold five months later for $3.555 million.

The court ruled the agent’s collusion in supporting the purchaser’s buying strategy was a breach of the real estate agent’s duty of loyalty to a client.

Damages were calculated on the difference between the two sale prices, after netting out the commission deducted on each sale.  In addition, the real estate agent was ordered to refund the commission received on the first sale.  The court ruled the agent breached a duty of trust owed to the client by deliberately and dishonestly misleading the client about the purchaser’s motives.

In a subsequent hearing before the Supreme Court, the agent wanted to revisit the calculation of damages.  There had been earlier evidence that the purchaser made improvements to the property before reselling and that in the five month period between sale and resale the market for similar properties was booming, rising at a rate of 15%-16% per annum.

The court refused a further hearing.  The real estate agent had the chance to argue these points at the first Supreme Court hearing, but did not.

Stevens v. Premium Real Estate – Supreme Court (6.3.09 & 3.4.09)

08.09.003