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A generic shot of the Bay of Islands, many areas of which are deemed areas of outstanding natural beauty.
A 13-year-old consent to sell areas of the Bay of Islands deemed to be an “exceptional example” of outstanding natural beauty has been deemed valid by a judicial review.
The determination from Justice Churchman at Wellington High Court, delivered July 17, went against a decision by officials that the consent had been granted unlawfully.
One of the applicants in the judicial review was rich lister Craig Heatley, who became a multi-millionaire at age 27 in the late 1980s through a number of business ventures including Rainbow’s End theme park, but he is known to most New Zealanders for starting pay-TV company Sky TV.
The dispute related to land around the Ōmarino coastal block, located on the south side of Te Rawhiti Inlet and west of Parekura Bay.
The review found the decision to deem the consent unlawful some 12 years after it was granted in 2010 constituted officials effectively repudiating the practice of granting consent to “purchasing programmes”.
In this case, consent was granted through a vendor’s purchasing programme, meaning the seller was granted consent to the sale of multiple lots in a development to overseas persons, where the identity of such persons was not known at the date of the grant of consent.
The review stated purchasing programmes had been a long-established method of granting consents to foreign investment under the Overseas Investment Act.
According to the review, 36 purchasing programmes were consented to between 1983 and 2010.
The applicants were Craig Heatley and Hayley Pyle, as the trustees of the Bentzen No 2 Trust, and Grant Holdings Ltd, as the trustee of the Grant Trust, who together were the partners in the Bentzen Farm Joint Venture (Bentzen). Bentzen is the developer of Ōmarino.
In a declaration in court documents, Justice Churchman stated: “Because I have declined to set aside or quash the 2010 consent, it remains effective according to its terms.”
However, any sale was still reliant upon an investor test, referred to as special condition 2.
Among other things, condition 2 required the overseas purchases to provide their full name, date of birth, nationality, and residential address, a summary of the overseas person’s visa and permit status, and a curriculum vitae or biography of the person.
A description of the overseas person’s business activities was also required, as well as a summary of their assets, liabilities, and net worth.
If the sale was being made to a company or other entity, details of the persons in control or ownership were required.
A statutory declaration was also required that the overseas persons (or those linked to the purchasing entity) were of good character.
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The view from the bottom of Bentzen Dr in the Bay of Islands.
Court documents read: “I declare: An overseas investor may purchase a lot in the Ōmarino Development from Bentzen in reliance on the 2010 consent if they are able to satisfy the requirements of special condition 2. (which incorporate the investor tests in force at the date the consent was granted).”
Court documents state that the high costs, involved in developing the subdivision and the consequent high price of the lots meant that relatively few New Zealanders would be able to purchase them.
In 2022 Bentzen identified an overseas purchaser and contacted the Overseas Investment Office seeking confirmation that the 2010 consent could still be relied upon.
The OIO advised that the consent could no longer be relied upon as it was unlawful under the OIA.
The review found it appeared officials changed their minds about the lawfulness of purchasing programmes sometime in the second half of 2012, they did not notify Bentzen of that decision.
Neither did the OIO provide any opportunity to Bentzen to make submissions in respect of their change of position, court documents noted.
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