Wairau Rd supermarket battle may go to appeal

Angela Bull says Foodstuffs is spending huge sums on traffic flow around the site. Photo / Greg Bowker

One of the country's most bitter property battles could have a sequel as supermarket giant Progressive Enterprises considers appealing the Wairau Rd Pak'n Save case.

If Progressive decides not to appeal, competitor Foodstuffs could finally open the store.

Last week, Progressive lost the case over Foodstuffs' 4899sq m North Shore supermarket built in 2005.

The property has been fenced off from the public since it was finished four years ago, as a number of courts ruled against it.

The store will employ 300 staff, has a line of 13 checkouts designed to cope with huge demand and a 334-vehicle carpark. It could have turned over about $70 million annually so the battle has cost Foodstuffs at least $280 million in lost revenue alone.

The latest decision went in the store's favour and against the rival food chain.

This week Progressive's general manager of property Adrian Walker and communications manager Bill Moore said no decision had been made by their company on whether to challenge the February 25 court ruling allowing the store to open.

"We are reviewing the decision," Moore said.

Progressive has until March 18 to lodge a claim against the decision over the store which Foodstuffs has planned for 20 years.

Angela Bull, Foodstuffs' general manager of property, said yesterday her company was spending millions on roadworks, installing traffic lights on the Archers Rd/Poland Rd corner, widening footpaths and improving traffic separation.

"Wairau Rd will still be four lanes wide but with solid median barriers through a stretch to improve traffic safety," she said.

Extensive work was being carried out on the store, carpark and roads to enable Foodstuffs to meet its early-May opening deadline, she said.

For Progressive to challenge the latest decision, it will need High Court approval to go to the Court of Appeal.

The case has been cited by the Government as one of the reasons to overhaul the Resource Management Act, particularly in regard to anti-competitive abuse of the law, although Progressive says the case is more about ensuring councils follow their own district plans.

The reforms, yet to be passed, are aiming to outlaw frivolous, vexatious and anti-competitive objections, reinstate the Environment Court's powers to award security of costs, increase filing fees for Environment Court appeals and incorporate a punitive regime for proceedings brought by a person against a trade competitor.

"Some of the highest costs are incurred in the so-called 'supermarket wars' where proponents and opponents have spent millions of dollars fighting each other and delays of years have resulted," the Environment Ministry says.

Progressive and Foodstuffs have been arguing over the new store for many years, taking their cases through a number of courts.

Last Wednesday, Justice Geoffrey Venning in the High Court at Auckland ruled against Progressive's appeal to the Environment Court decision, allowing the supermarket to open.

The ruling came from a hearing on February 4 when Progressive went to court against North Shore City Council, pleading to overturn the Environment Court decision late last year which allowed Foodstuffs to open.

Progressive's appeal to the High Court put that victory on hold so the store was barred from opening but Foodstuffs painted the shop bright yellow and went ahead with major roadworks at a nearby intersection.

Even though Foodstuffs now has the right to open the store, it cannot do so until 20 working days have passed, which will be around March 25.

In the High Court hearing, Christian Whata argued for Progressive that the Environment Court had not taken full account of traffic management provisions nor of the council's district plan. He said a precedent was being set by a supermarket getting council approval to open on that site.

Justice Venning said the court was satisfied that even with the increased traffic which would be generated by the new supermarket, the existing transport network would be able to cope.

Major roading changes had been made to the area, he said. The Archers Rd entrance to the new store had been altered. Cars would be banned from driving into the carpark by turning right on to the site from Wairau Rd.

The judge agreed with the council's lawyer Bill Loutit who argued that the Environment Court had taken account of the policies and objectives of the district plan.

Nor would traffic be made worse at the intersection of Wairau Rd and Tristram Ave, the judge said. The immediately surrounding roading network could cope with the store.

The judge did not agree with Progressive's argument that the store would set precedent in getting approval.

Whata said the Environment Court was wrong in failing to acknowledge that an increase in traffic delay and queue lengths of up to 20 per cent in peak hours on an intersection operating at capacity was small in magnitude.

Justice Venning said a future case where another applicant sought permission for a supermarket in the area would be decided on its own merits. The Pak'n Save case would not be used as the yardstick.

"There could be no precedent requiring consent to be granted based on the decision in the present case," he said, backing the Environment Court decision which he said had addressed all the issues.

"The Environment Court cannot be said to be wrong in coming to that conclusion and certainly not on the basis argued for by the appellant," Justice Venning said.

Even if there was a proposal on a different site which caused 20 per cent traffic delays, it would be an entirely new situation, he said.

In 1989, Foodstuffs bought the 2.02ha site with frontages to Archers Rd and Wairau Rd. In 1996, it bought an additional portion of land to give access off Porana Rd. In 1997, it applied for consent to develop a 6259sq m Pak'n Save. But in 2002, the Environment Court declined this because of traffic problems.

Foodstuffs' subsidiary the National Trading Company got resource consent for the store and a two-appliance Takapuna station and North Shore Fire District headquarters on the corner site.

But Progressive took the case to the High Court, asserting North Shore City was wrong to grant Foodstuffs non-notified consent. The High Court backed Progressive and ruled the consent was invalid.

Foodstuffs was about to take the case to the Court of Appeal but then abandoned that plan and instead took the unusual step of applying for consent for a building already finished.

In February 2004, the company lodged an application for the 4899sq m Pak'n Save and a fire station, although the fire service has long since abandoned plans to have a building developed near the new store.

The council processed this on a non-notified basis and granted consent on November 18 that year. But that consent was found to be illegal so in 2006 Foodstuffs decided to start right at the beginning once more.

It applied again and the council decided to process that with limited notification. Progressive lodged an application for a judicial review in the High Court.

The Government's RMA review said a 1997 study commissioned by the Ministry of Commerce revealed that 32 per cent of business applications attracted submissions from parties they considered competitors. In a further 25 per cent of the cases it was suspected that competitors were involved.

LAW SHAKE-UP
Resource Management Amendment Bill 2009:
* Will reduce trade competitors' powers.
* Third parties won't be able to front appeals.
* Will allow victims to recover big costs.