Woolworths NZ's site is at 201 Halswell Rd, Christchurch. Photo / supplied
A Christchurch business which opposed one of New Zealand's largest supermarket chains has been ordered to pay a "landmark" $325,000, one of the largest awards made against a party ruled to be a trade competitor.
Justices Laurie Newhook and Prudence Steven in the Environment Court at Christchurch this month released their decision against Spreydon Lodge, which owns land next door to the Woolworths site where the $300 million scheme is consented.
Retired Christchurch lawyer Simon Mortlock MNZM is a Spreydon Lodge director but maintained today the business "would not normally be regarded as a trade competitor".
The Resource Management Act prohibits anti-competitive behaviour by parties who stand to gain from winning legal actions blocking a new entrant. The law limits the ability for trade competitors or other potentially frivolous or vexatious parties to participate in objection and appeal processes.
Mortlock's business and the local authority opposed Woolworth New Zealand's plans for 21ha of Halswell land. Mortlock's business itself plans the development of neighbouring land.
The opposition failed, Woolworths won approval for a new town centre at 201 Halswell Rd on land now used for farming and its opponent has been ordered to pay.
Allison Arthur-Young, a Russell McVeagh partner, acted with associate Lauren Rapley for Woolworths, winning what property insiders today called a "landmark award".
The $325,000 ruling is one of the largest cost awards against a trade competitor, legal experts said.
"As far as we can tell, there has been nothing this significant before," said one.
Mortlock also acknowledged the sum was large but said the company did not regard itself as a trade competitor of Woolworths.
"It was unfortunate. We're a reputable company. We don't engage in anti-competitive behaviour. That's the opposite of the way we work and anyone who has dealt with us in the past knows we don't act like that," Mortlock said today.
A decision had not yet been reached about whether an appeal would be lodged, Mortlock said.
Christchurch City Council was successful in getting costs from Woolworths but was far from recouping all the expenses it had gone to in arguing against Woolworths' plans.
The council was granted costs of $155,000 but the court was not impressed with how the council acted in the matter. The authority spent at least $197,000 on the case opposing Woolworth's application.
That was, however, only the costs of hiring experts in the matter, not legal costs, so the total amount was higher.
The court said the council wanted those costs back and allowed it but did not grant the full amount spent.
The court said it was not assisted in making its decision by the council's actions or arguments. It called some of the council evidence "blameworthy".
"We were not assisted by the position taken by the council nor with the evidence of the experts," the judges wrote.
Spreydon Lodge raised wide-ranging grounds opposing Woolworth's proposal on scale, scope, composition, location and orientation of the development.
Mortlock's business had argued the supermarket owner's plans would "seriously undermine the orderly development of the north Halswell key activity centre and result in significant adverse economic effects to the Halswell community".
The council wanted amendments to the proposal which Woolworths had successfully opposed.
Mortlock is a Christchurch lawyer, formerly of Mortlock McCormack Law. That firm said today he was retired.
Even the court acknowledged the award was "large".
"We make an order for payment of costs by Spreydon to Woolworths of $285,581.23," it said, adding the further $39,297 excluding GST.
"While seemingly large, we are satisfied that all the costs incurred by Woolworths are entirely explained to the court's satisfaction by the lengths Woolworths was forced to go in meeting the case by Spreydon. For all the same reasons, we find that it is reasonable to order Spreydon to pay 50 per cent of the Crown's costs otherwise payable by Woolworths of $39,297 exclusive of GST," the decision said.
Mortlock's Spreydon Lodge had argued it was not a trade competitor but in the costs decision, the judges said the business now acknowledged that the court had found it was.
The Resource Management Act takes a strong stance against the involvement of trade competitors motivated by anti-competitive imperatives, it noted.
"The opposition raised by Spreydon to the Woolworths' proposal was found to be wholly without merit, to an extent that we question whether Spreydon would have opposed any aspect of Woolworths' proposal at all had it not been in competition with Woolworths, such was the weakness of every element of its opposition on the merits," the judges wrote.
In 2019, Mortlock of Lyttelton was made a Member of the New Zealand Order of Merit by former Governor-General Dame Patsy Reddy, for services to the community and education.
As a founding partner of the law firm Mortlock McCormack Law, he devised and oversaw the development of the Launchpad scheme, aimed at school leavers whose academic achievements might have otherwise limited their options, according to the citation released three years ago.
Woolworths is now selling the Halswell land, but with all the necessary planning work undertaken for a new town centre to rise there.
Up to 250 new homes, 32 apartments, that pre-committed Countdown, offices, medical centre, childcare, gym, cinema and food and beverage operations are elements of the scheme for the land.
Environment Court consent that came out last September allowed for the new hub on Christchurch's edge. That took three years to win.
In 2018, Woolworths sought consent for the mixed-use development but it was not until last September that it won that application to have resource consent granted for the scheme at 201 Halswell Rd/State Highway 75.
Getting the Environment Court case across the line increases the value of that land substantially.
Website 201halswell.com showed that potential for development.
Agents CBRE took the entire mini-farm to market in a deadline sale that closed on March 24.
"Anchored by a long-term lease to a Woolworths NZ subsidiary and with resource consent in place, the time is right for a capable developer, with a strong track record, to take the project forward. With subdivision consent providing for two mixed-use retail super lots and 10 residential super lots expected to accommodate at least 250 residential dwellings, this is a rare opportunity," CBRE advertised.
“It’s not an award for us, it’s an award for the industry.”