SUPREME COURT Park Board case sent back to Magistrate

Press, Volume CXI, Issue 32779, 2 December 1971, Page 17

SUPREME COURT Park Board case sent back to Magistrate

In a unanimous decision, the Court of Appeal has referred back to the Christchurch Magistrate’s Court an action between the Mount Cook National Park Board and Mount Cook Motels, Ltd, as to whether the board has jurisdiction to charge the company a licence fee of 6d (six pence) per night per person accommodated. The previous licence fee was £lO a year.

The case has been remitted to the Magistrate’s Court to determine whether the new licence fee fixed by the board amounts to a derogation from the grant contained in the The Court of Appeal heard the matter when sitting in Christchurch on October 18 and 19, and reserved its decision. The Court comprised Sir Alfred North (president). Sir Alexander Turner, and Mr, Justice Woodhouse. Messrs N. W. Williamson and G. K. Panckhurst appeared for the appellant board, and Mr C. B. Atkinson for the respondent company. DECISION REVERSED The board’s new licence fee was upheld in a decision given in the Christchurch Magistrate’s Court by Mr E. S. J. Crutchley, S.M., but was reversed by Mr Justice Wilson in the Supreme Court, on appeal. The new licence fee amounts to about $7OO a year, the previous one amounting to $2O a year. The final decision in the case will determine the basis on which all national park boards in New Zealand will levy such licence fees for commercial trading in a national park.

“I am of the opinion that the real question in issue in this case was not raised by counsel, either before the Magistrate or the Judge,” said Sir Alfred North. “Therefore, in my opinion, the case must be remitted to the Magistrate to determine the question whether what the

appellant has attempted amounts to a derogation from the grant contained in the lease. “Ulis being the opinion of u* all, the appeal is alloWed, the judgments in the Supreme Court ahd in the Magistrate’s Court are both vacated, and the: case is remitted to the Magistrate for further consideration on the lines proposed by Woodhouse

“It . being a term of the granting of leave to appeal to this Court that no order for costs would be sought by the: appellant, there will be no order as to costs,” Sir Alfred North said. DECISION OF WOODHOUSE X “I suspect that the extended litigation in this case could have’ been avoided if Mr and Mrs Ashurst, who are the principal shareholders in the respondent company, had been willing to go at least part of the way to meet the board’s suggestion that henceforward a fair commercial price should be paid for a trading concession which was carrying only a nominal charge,” said Mr Justice •Woodhouse, m his decision. “The Magistrate thought they were influenced by the belief that the proposed charges Were not to be levied against the Tourist Hotel Corporation or the clubs with

accommodation in the area, but he noted that Mrs Ashurst ‘would not go so far as to say that the 6d (six pence) fee was in itself excessive.’

“And Wilson J. remarked in his judgment that he could find nothing unfair or unreasonable in the proposal that ‘the holder of the valuable trading right conferred by the licence should contribute to the board’s funds’ on the principle (as he put it) of ‘the user pays.’ His concern was simply *whether Parliament had conferred clear and distinct authority to do this.’ “That was the single point taken on behalf of the company. It was said that the board had no power to fix a revenue-producing fee; that it must disregard the virtual monopoly and limit the size of the fee merely to the administrative charges associated with the cost of the issue of the licence and its regulation,” Mr Justice Woodhouse said.

In his careful judgment, the Magistrate had rejected that contention and had held that it Was irrelevant, said Mr Justice Woodhouse. He was satisfied that the Magistrate’s decision upon the point was right.

He was satisfied that the act provided the various national park boards with clear authority and a wide discretion to impose commercially realistic charges for trading concessions at their disposal, and he agreed with Wilson J. and the Magistrate that there was certainly nothing unreasonable in that. MATTER COMPLICATED

“However, the matter is complicated in the present case by the associated lease. Does the grant make a difference? The doctrine of derogation was not discussed before the Magistrate or on appeal before Wilson J., and in this court it arose as the result of a suggestion from the Bench. “But in the peculiar circumstances of this case, I think it has a somewhat special application. It is relevant to the fact that the lessee's interest is made to depend upon a licence which can be issued only by the board itself. “Clause four of the lease provides that the land will be

used solely for,the erection of motels; and there is the accompanying condition that the lessee must hold and obtain renewals of a licence to trade within the Mount Cook National Park.

“Quite plainly, the lease was given and taken for the express purpose of establishing a motel business upon the land. The business could not be conducted without the licence, and in my opinion the implication is inevitable that proper steps would be taken on both sides to see that the licence was issued and its conditions observed. “On one hand, it was not to be withheld on some arbitrary basis by the ‘board. On the other, its terms and conditions could not be capriciously rejected by the company,” Mr Jiistice Woodhouse said.

“The general rule is that a lessor must not voluntarily prejudice the rights which he has created and he will not be permitted to do anything which is inconsistent with the purpose for which the demised premises are let. In a word, he may not derogate from his grant “UNUSUAL POSITION”

“In the present case, the board is in the unusual posi-tion-of being at one and the same time both lessor of the land and licensor of the trading concession. But for the purpose of applying the rule I am satisfied that it is quite impossible to isolate one identity from the other. "If the board arbitrarily withheld the licence, it could hardly deny that it had voluntarily frustrated the whole purpose for which the lease had been granted. That, in my opinion, would be the clearest possible derogation from its grant.

"And the same result would follow from an imposition by it of terms for removal of the licence which would be unacceptable to any willing licensee dealing with a willing licensor in respect of the same subject matter.

"The question is not to be determined simply by reference to the fact that the company might be faced with substantially increased expense in carrying on its business by reason of an addition to the cost of its licence.

“The issue is whether the demand really amounts in a practical sense to a frustration of the purpose for which the lease was granted,” Mr Justice Woodnouse said.