Winton Group is gaining a reputation for litigious behaviour but its chief executive says the courts are the only way to get things done in New Zealand
Property developer Winton is known for taking opponents, competitors and government agencies to court, but says it’s all par for the course for property developers.
Its chair, chief executive and majority shareholder Chris Meehan likens lawyers to diggers – an essential part of the property developer’s toolkit when dealing with the painstaking Resource Management Act process.
Obviously, litigiousness is contextual. In 2009 serial litigant Jonathan Lee-Riches attempted to sue the Guinness World Records to prevent it from granting him the record for “most litigious individual in history”.
Ultimately, his action against Guinness World Records was dismissed. The annual said it had not been tracking “world’s most litigious man” as a category.
Lee-Riches’ other legal activities (of which there are thousands) included a case where he claimed he had met infamous fraudster Bernie Madoff on eHarmony.
Large-scale property developer Winton Group has never filed lawsuits against Britney Spears, Somali pirates or its own mother, but nevertheless, the business’ legal behaviour has managed to raise a few eyebrows.
Last month a lawsuit Winton had launched against its Queenstown neighbours, in which it claimed their opposition to its Waterfall Park was “akin to extortion or blackmail”, was dismissed.
Winton was seeking damages of $7.1 million from the neighbours who had opposed the development at every step of the way, claiming they had been wrongly stymying the project to extract a financial benefit.
The judge concluded that the proceedings were filed not to seek damages for a loss for which they could argue the neighbours are liable, but to “impose the burden” of having to defend such a big claim in what were strong words for a civil case.
“I am satisfied Waterfall Park did that to deter the Hadleys [the neighbours] from continuing to oppose Waterfall Park’s attempt, through their appeals, to obtain relief from the Environment Court which would allow Waterfall Park to develop the Ayrburn land in the way it wants to.
“I am satisfied that is Waterfall Park’s ulterior and predominant purpose of the civil proceedings.”
In September last year, Winton filed for a judicial review of an Overseas Investment Office Decision allowing a rival property developer to purchase land in Havelock North it also wanted to buy.
The review was shut down by High Court Judge David Gendall on all six grounds claimed as illegal by Winton.
The 42-hectare parcel of land was sold to CDL, also listed on the NZX, for $58m. The second highest bidder had offered $49m, while Winton had offered $32m conditional or $25m unconditional for the land.
The vendor’s affidavit called Winton’s offers “offensive”.
Last week Winton announced it was taking legal action against government housing agency Kāinga Ora, alleging it had engaged in anticompetitive conduct by refusing to fast-track the approval process for a substantial Winton development in South Auckland.
The Sunfield development is planned as a 15-minute neighbourhood comprised of 4,400 homes, three retirement villages, and substantial commercial and town centre developments.
The project had also been turned down as a Special Development Project by Housing and Urban Development Minister Megan Woods.
Winton alleged Kāinga Ora was reserving its Urban Development Act (UDA) powers for its own developments, putting other developers at a competitive disadvantage.
Winton said Kāinga Ora had said it was too busy to consider new applications while actively processing its own.
It is seeking substantial damages as well as consideration under the UDA, though acknowledges it could go on for years.
Winton’s Chris Meehan told Newsroom being in and out of the courtroom was the reality of being a property developer in New Zealand when dealing with the RMA, with large projects often contested and facing costly environment court hearings and subsequent appeals.
“We wish it wasn’t the case but it’s just the way it is. It’s not specific to Winton, I don’t think it’s ever changed, it just happens that now we’re a public company people seem to be more interested in it.
“It’s a bit like if you’re an earthmoving company you need to use a digger to move the earth as part of your fundamental toolkit, if you’re a property development company you need lawyers and the courts.”
Asked about decisions such as Waterfall Park that appeared to go beyond what you’d expect of a developer, Meehan said if the business ever felt a neighbour or opponent was trying to “greenmail” it, it had no choice but to go to court.
In its product disclosure document issued before its December 2021 IPO, the business forecasted for administrative costs of $10.9m in its 2022 financial year, but it ballooned to $13m because of higher legal fees.
Meehan said it was important to look on the “other side of the ledger” and the long-term benefits of having consents in place.
New Zealand Shareholders’ Association chief executive Oliver Mander said companies needed to retain the support of the community in which it operates.
This is particularly true for Kāinga Ora which, like it or not, Winton will have to continue to work with in the future.
“While Winton may have felt justified in pursuing these cases, there may be longer-term reputational issues that reduce long-term value for shareholders.”