Described as an attempt by under-bidder Winton Land to reopen negotiations for 69 hectares of undeveloped prime residential land sold near Havelock North, a challenge to Overseas Investment approval given for CDL Land’s $58 million purchase in 2020 was dismissed by the Court of Appeal.
Litigation followed sale by the Lowe family of a large block of land west of Havelock North. Following deaths of Mr and Mrs Lowe senior, family members had the land rezoned for intensive residential subdivision named as the Iona Special Character Zone. It was a valuable prize for developers.
Three potential buyers were in the running: CDL Land New Zealand Ltd, owned by listed company Millennium & Copthorne, being part of a Singapore-based corporate group; Winton Property Investments Ltd, owned by listed company Winton with majority control in the hands of interests associated with CEO Chris Meehan; and a Tumu Merchants/Greenstone Land joint venture.
The Court of Appeal was told Lowe interests sold to CDL Land for $58 million. As under-bidder, Winton Property made two signed offers: $32 million subject to due diligence; $25 million subject to board approval only.
CDL Land’s purchase required government approval under the Overseas Investment Act given the level of offshore ownership held through its parent company. Approval requires evidence that the overseas investment provides economic benefits not otherwise available through a local purchaser.
Winton Property sued six weeks after learning CDL had overseas investment clearance, seeking judicial review of government’s decision. Judicial review is not an appeal. It is a challenge to the process by which a decision is made.
Winton claimed a clearance report prepared by Overseas Investment Office for government consideration did not present a fair and accurate summary of the sale and its consequences.
In the course of its judicial review hearing, evidence surfaced that Winton attempted to sabotage CDL’s overseas investment application by submitting an anonymous complaint that CDL had failed to disclose the fact a New Zealand based entity (being Winton) was in the running and had made an unconditional offer to purchase the land.
The Court of Appeal dismissed Winton’s application for judicial review. The court said that even if there had been errors in process it would not have overturned CDL’s investment clearance. There was no realistic prospect of the Lowe family reopening negotiations with Winton Property; its best offer was barely half that offered by CDL. And Winton itself had caused or contributed to many of the issues raised on judicial review by failing to openly engage with Overseas Investment Office at time of CDL’s application.
Winton Property Investments Ltd v. Minister of Finance – Court of Appeal (15.08.23)
23.137