In answer to your correspondent’s queries (Ring road compensation – a threat? Cook Islands News, November 16).
I act for Pa Ariki; I have done so, continuously, in respect of this land,
since 1997. The interests of the Lessee were initially represented by New
Zealand solicitors and, more recently, by Mr Tai Nicholas and Mr Brian Mason.
compensation become payable – speculative and hypothetical at this stage as the
Crown has made its position as to road relocation very clear – I would claim it
for Pa Ariki.
that speculative and hypothetical scenario, one or more of those lawyers would,
I assume, act for the interests of the Lessee; it would be for them to decide
whether they sue Pa, Government, or both; I think it more likely that Lessor
and Lessee would act together in this hypothetical scenario.
to the basis on which compensation is payable, your readers appear to be
unfamiliar with, or have forgotten, the history of this matter.
13 December 1989, the High Court was asked, by Government, to confirm a lease
in favour of a company wholly owned by the Crown. The Solicitor-General
appeared and evidence was given. The Court was advised by the
searching for the land, the advice government has received is that it should be
a substantial block of land having the right character to enable development to
be undertaken without going more than two or three stories high. It should
enable the rooms to be well spread; it should have a beach cite [sic; emphasis
added] and the corner of the island where it is located has always been desired
by developers, particularly because it has a view of the sunset.”
Court was advised as to public consultation as to the layout of the proposed
hotel and supporting documentation put before the Court (the relocated road a
prominent feature of the proposed improvements to the land). As your own
archives should confirm, the proposal from the very start was that the Land would
be leased precisely because it would become a beachfront property by way of a
relocated main road.
was the proposition put by the Crown:
the Court; and
those advising Pa.
Crown’s company was allowed to proceed – and the entire hotel site developed,
as everyone knows, with the beach as its focal point and outlook.
doubt as the legal effect of the Solicitor-General’s assurances from the bar
that day were laid to rest by Quilliam CJ in a 1998 declaratory judgment of the
High Court; those assurances were given to procure the execution of the lease –
to a certain extent and for well understood purposes, they bound, and continue
to bind, the Crown in its dealings with the Pa titleholder.
is more; for some 30 years, successive Governments held Pa to a commitment not
to allow the land to be developed in any way other than as a 4/5 star
internationally managed property.
those years a succession of alternative development proposals were turned down
by Pa because the Crown made its expectations around the development clear both
to her and to those with other ideas for the land
one occasion, famously, the Crown intervened at a High Court confirmation to
object to a lease because it was not in accord with those Crown expectations
for the land.
fairness to the Crown; in 2010, it confirmed its commitment, by signed Deed, to
Pa – to relocate the road; it promised to do so when the Hotel that the Crown
wanted built on the site was sufficiently advanced.
Deed is legal, valid and binding – Pa takes the benefit of its terms.
the run up to Covid, the Crown expressed doubts about whether it was in the
public interest to complete the Hotel as such, at least until island
infrastructure was improved. Land banking was proposed by the Crown and
preliminary discussions held with Pa around that idea.
doubts as to the need/desirability for such a Hotel intensified with the onset
of Covid. For obvious reasons, the suggestion of land banking was dropped. By
2021, the Crown was encouraging of Pa finding some alternative development
proposal. Pa has done so.
to legal binding commitments being made by Pa or by the Lessee, the Crown
assured both that they could move forward with the blessing of the Crown as to
an alternative, mixed, development – again, your newspaper featured the news at
the time. Specific enquiries were made, and it was confirmed that the 2010 Deed
would be honoured for Pa, in respect of the altered nature of the development.
It was further agreed that the Deed would be novated so that the Lessee would
take its benefit.
the face of those assurances, the Lessor, the Lessee and the Court all moved
ahead – the lease was confirmed; some millions of dollars have now been
committed by the Lessee to a project that – as in 1989 – will be financially
viable only as a beachfront property.
correspondent makes a comment as to sums derived by Pa over the period 1998 to
the present; I do not propose to enter into a public debate around that;
however, your correspondent is deeply mistaken.
fact, income derived over that 25 year period – if it were annualised would
represent a return considerably lower than the rentals thought appropriate,
even some decades ago.
a very real degree, Pa’s inability to maximise her return reflects Pa’s ongoing
agreement, with successive Governments, that she would not develop the property
for anything other than a 4/5 star hotel, internationally managed.
having acted, in good faith, in response to Crown expectations for the Land,
the Crown will be held to certain standards of conduct, moving forward. The
idea that the Crown could now renege on that ongoing relocation commitment,
without paying substantial compensation, is unsupportable.