Developer takes Te Arai battle to court

Property developer John Darby is battling on with plans to create a coastal subdivision at Te Arai beach south of Mangawhai Heads, after it was blocked by Rodney District Council last year.

While objectors applauded the council move, the stalled development has left local Maori and a who's who of wealthy investors fuming over its failure to repay millions loaned to the project.

In an attempt to force a council rethink, Darby's company Te Arai Coastal Lands sought a judicial review and this week the process got under way at the High Court.

Judicial review allows someone affected by the exercise of statutory power, such as a council planning decision, to challenge it in the High Court on grounds of procedural failure, illegality or irrationality.

The development on 616ha owned by Te Arai Coastal Lands was originally planned to involve 1400 dwellings, along with a boutique thermal spa, golf course, visitor facilities and coastal park and campground. It was later scaled back to 850 and then 180 homes.

In rejecting the company's proposed plan change, the council said the development's adverse effects could not be mitigated without affecting the area's unique character.

And as the council was about to adopt a new district plan, it also withdrew a variation it had drawn up to potentially accommodate Mr Darby's proposal under the new plan. The council said it planned to defend its position in court.

Meanwhile the ongoing uncertainty has cut off a major source of income for the Northland hapu of Ngati Whatua - Te Uri o Hau - which has an interest in the development after acquiring land at Te Arai as part of a $15 million Waitangi Treaty settlement in 2002.

As well as owning 25 per cent of Te Arai Coastal Lands, the hapu is owed $9m by the company and has not received its annual interest of $720,000 since 2008.

A further sum, understood to be between $8m and $15m, is owed to a number of private investors, many of them friends of Darby and his business partner George Kerr, from a previous issue of bonds and equity warrants.

In a separate planning battle, Darby is seeking permission to create 20 residential properties at New Chums Beach in the Coromandel, ranked in the top 20 beaches in the world in 2006 by The Observer newspaper.

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