Management and Sale of Local Authority Endowment Land

Management and Sale of Local Authority Endowment Land Management and Sale of Local Authority Endowment Land - Start

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Management and Sale of Local Authority Endowment Land - Description

Duncan Laing . 7 November 2013. Local Authority Property Association Conference New Plymouth. Introduction. What is endowment land?. How to establish . if land is endowment. Sale of endowment land. Statutory requirements. ID: 628341 Download Presentation

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Management and Sale of Local Authority Endowment Land




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Presentations text content in Management and Sale of Local Authority Endowment Land

Slide1

Management and Sale of Local Authority Endowment Land

Duncan Laing

7 November 2013

Local Authority Property Association Conference New Plymouth

Slide2

Introduction

What is endowment land?

How to establish

if land is endowment

Sale of endowment land

Statutory requirements

Reconciling overlapping / conflicting statutory requirements

Managing expectations of interested parties

Case study Junction Road

Slide3

What is endowment land?

A gift or bequest of property

Includes statutory vesting (often by Crown)Commonly derive income from land for application to a particular project or workProblem – inconsistent use of language to create trusts and endowments by Parliament

Slide4

How to establish if land is endowment

Current computer register – starting point only

The current computer register will tell you:Current ownersArea and legal description (but be careful)Current memorials and interests (appurtenant and subject)

Slide5

Current computer registers cntd…

The current computer register should tell you:

Nature of tenure: fee simple, leasehold, cross lease, unit title or company shareCo-ownershipLimitations on titleThe current computer register will not tell you:Former interests and memorials and past transactions

Former owners

Slide6

Current computer registers cntd…

The current computer register

may not tell you about:Purpose or statusAlways make additional checks

Slide7

Resources for additional checks and what to look for

Slide8

Sale of Endowment LandReconciling legislation

Slide9

Local Government Act 2002

Sections 140 and 141

Impose restrictions on the disposal of “property” vested in a local authority, including endowment landStarting point = section 140(3) must retain endowment for the purpose for which it was vestedSection 140(4)(a) = Local Government Minister can approve additional or different purposesSection 140(4)(b) = can sell or exchange and use proceeds for a different purpose unless vesting instrument expressly prohibits sale or exchange

Slide10

Local Government Act 2002 cntd…

Must establish the terms of the original vesting instrument to ascertain if sale is prohibited – requires research

Section 141(1)(a) = any sale proceeds must be used for a purpose that is consistent with the purpose of the endowmentIf the Crown was the donor of endowment land, the Minister of Land Information and Minister in Charge of Treaty Negotiations must be notified of the proposed sale or exchange

Slide11

Local Government Act 2002 cntd…

Ministers not obliged to take any action and no power to stop sale or exchange or to direct how proceeds are allocated (section 141(2))

If the Crown was not the donor the Council must:Make a reasonable attempt to notify donor or their successor of the intended sale or exchange;Provide them with a reasonable opportunity to commentIn the case of a reorganisation, proceeds applied to the new district or districts of which the former authority formed part

Slide12

Public Works Act 1981 and Local Legislation

Offer back obligation in section 40 – doesn’t expressly exclude endowment land

Many endowments result from Local Legislation specific to a particular endowment:Vests the endowment landSets limitations and restrictions on management and saleWording used by Parliament not always clear or consistent Specifically recognised in Waitara Leaseholders Association v New Plymouth District Council

LINZ inconsistencies

Slide13

Waitara title examples

Slide14

Waitara examples

“upon trust for”

missing

Consistent

Slide15

Reconciling legislation

General principles of interpretation

Overlapping statutory provisions – try to give effect to each provision without creating conflictIf conflict cannot be avoided:Must determine which of the conflicting provisions is dominantLater in time may impliedly repeal earlier

But special provision usually prevails over general provision

Slide16

Reconciling LGA and PWA requirements on sale

Tasman District Council v The Proprietors of Wakatu

Discussed relationship between LGA and PWAIt was argued that section 40 PWA overrides sections 140-141 LGACourt held:Section 140 of the LGA is a code imposing restrictions on disposalSection 40 does not trump sections 140-141Possible to give effect to both without conflict

Slide17

Reconciling LGA and PWA cntd…

Possible to follow requirements to exercise the power of sale in accordance with section 140-141 and also comply with section 40 and offer the land back to the donor (Crown or private party) or consider if exceptions to offer back apply

Sections 140-141 are silent regarding who the purchaser of an endowed property may be, so no obvious direct conflict with the requirements of section 40 to offer back to a previous owner

Slide18

Managing expectations of interested parties on disposal

Who are interested parties?

Former owners (Crown or private parties)Need to establish who an offer back (if necessary) might need to be made toPWA offer backs can be made to the CrownAcquisition history and analysis importantHow and why did the Crown acquire the landCurrent lessees – freeholding expectations?

Others?

Slide19

Case study – Junction Road

Vested in predecessor under Taranaki County Reserves Act 1966 as an endowment for County purposes

“vested …in fee simple as an endowment for county purposes…”Farm land subject to 25 registered ground leases21 year perpetually renewablePBLA leases

Vast majority of lessees expressed an interest in free-holding

Slide20

Junction Road cntd…

LTCCP 2009-2019 Council resolved intention to sell fee simple interest subject to:

Compliance with statutory requirements (including sections 140-141 LGA and section 40 PWA)Compliance with Council’s internal property sales policy

Slide21

Junction Road cntd…

Council resolved 2010 to approve sale to lessees with any land not sold in that manner to be sold on open market

24 of 25 lessees purchasedAcquisition historyLand originally confiscated from Maori owners by Crown in 1865 under New Zealand Settlements Act 1863 to quell rebellion and facilitate settlement

Slide22

Junction Road cntd…

First public works activity when identified as a reserve for the improvement of roads under Taranaki Waste Lands Act 1874

Vested in Taranaki County Council by Crown by Taranaki County Reserves Act 1877 (TCRA) for a public work (an income stream to fund the improvement of the “junction road”)

Slide23

Junction Road cntd…

Section 40 PWA conclusions

Unlikely any of the offer back exceptions would applyOriginally acquired by the Crown as “waste land” rather than a public workSuccessors to former Maori owners not entitled to an offer backLast owner of land before acquired for a public work was Crown so Crown potentially entitled to an offer backHowever, definition of public work at time of transfer to local authority narrower than now and required positive activity

Income generation not a public work at that time so Crown not entitled to an offer back

Slide24

Junction Road cntd…

Sections 140-141

No prohibition on sale in the TCRANotification given to Minister for Land Information and Minister in Charge of Treaty of Waitangi Negotiations that the intention to sell was included in the LTCCPNo set form of notification or timeframe in LGANo obligation on Ministers to respond - Ministers confirmed they had no issue with freeholding

Slide25

Junction Road cntd…

Use of proceeds of sale

Section 4 of TCRA sets out how income from the endowment land is appliedClear emphasis in section on rental income rather than being wide enough to cover sale proceedsDoes not contemplate sale so does not specifically apply to the proceeds of sale

Slide26

Junction Road cntd…

Section 141(1)(a) LGA requires use of sale proceeds to be consistent with purpose of the

endowmentClearest evidence of purpose is section 4 TCRAPurposes (sequential)Firstly, maintenance and improvement of that part of Junction Road located within the boundaries of Taranaki County and Inglewood County

Secondly, surplus applied to “other road works” in respective counties

Slide27

Junction Road cntd

Authorised to apply proceeds to periphery roads in vicinity of Junction Road (ie same geographical area of original counties)

Section 141(3) - does not apply retrospectively to reorganisations prior to LGA 02 coming in to forceInappropriate to apply proceeds to road works in wider New Plymouth DistrictNo ability to apply any proceeds to parts of Junction Road located outside New Plymouth District because TCRA limits application to road works within Inglewood and Taranaki Counties

Slide28

Junction Road cntd…

Also need to consider section 10 of LGA 02 (subject to relevant terms of the TCRA, LGA 02 and LGA 74)

Ensure that the application of funds comes within the scope of the purpose statement in section 10(b):to meet the current and future needs of communities for good quality local infrastructure, local public services and performance of regulatory functions in a way which is most cost-effective for households and businesses

Slide29

Questions


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