Faloon v Attorney-General CA255/00 [2001] NZCA 453 (23 July 2001)

Last Updated: 11 June 2023

IN THE COURT OF APPEAL OF NEW ZEALAND CA255/00 CA280/00

BETWEEN CLARENCE JOHN FALOON

First Appellant

AND RUTH ENID FALOON

Second Appellant

AND CENTRAL EQUIPMENT COMPANY LIMITED

Third Appellant

AND THE ATTORNEY-GENERAL

Respondent

Hearing: 16 July 2001

Coram: Keith J Blanchard J McGrath J

Appearances: First Appellant in person

J A L Oliver and S D Barker for Attorney-General

Judgment: 23 July 2001

JUDGMENT OF THE COURT DELIVERED BY McGRATH J

[1] The appellants have applied under Rule 10 of the Court of Appeal (Civil) Rules 1997 for an extension of time to apply for a fixture and file the case on appeal in respect of an appeal against a judgment of Gendall J delivered on 5 October 2000 and an associated application under Rule 264 of the High Court Rules for a review of that judgment.

[2] On 5 October 2000, Gendall J delivered a reserved judgment striking out the statement of claim and dismissing this proceeding. Initially Mr Faloon applied for a review of the decision of the High Court under Rule 264 of the High Court Rules. On 20 November 2000, McGechan J, on his own motion and under Rule 264(4), removed that application into this Court. However, in case this Court considered it inappropriate to deal with a challenge to a considered decision of the High Court under Rule 264, the judge also suggested consideration be given to a substantive appeal to this court. The time for bringing appeals under Rule 5 of the Court of Appeal (Civil) Rules had expired, so that an application for special leave to appeal out of time would have to be filed. Counsel for the respondents however indicated he would not oppose a prompt such application and special leave to appeal was granted by this Court on 11 December 2000. In granting leave the Court indicated that the application for special leave could also be treated as the formal Notice of Appeal and as having been filed on 11 December 2000. In terms of the Court of Appeal (Civil) Rules it follows that this is the date at which the appeal was brought.

[3] Rule 10 provides:

Appeal Abandoned if not Pursued

• (1) An appeal is to be treated as having been abandoned if the appellant does not, within 6 months after the appeal is brought, either-

  (a) Apply for a fixture and file the case on appeal; or

(b) Apply for an extension of time for applying for a fixture and filing the case on appeal.

• (2) On an application under subclause (1)(b), the Court may extend, by such period as it thinks fit, the time for applying for a fixture and filing the case on appeal, and may from time to time further extend that period while the proceeding is pending.

• (3) This rule applies only to appeals brought on or after the date of commencement of these rules.

[4] Mr Faloon, who represents the appellants in the litigation, had not applied for a fixture in or filed the case on appeal by 11 June 2000 when time under Rule 10(1) had expired. He had however applied for an extension of time to comply with the Rule 10(1) requirements. The question before the Court is accordingly whether in

the circumstances it should exercise the discretion given by Rule 10(1)(b) to grant the extension of time sought.

[5] Mr Faloon based the application for extension on the fact that he, and one or other of the appellants, have several related proceedings outstanding in the High Court, the outcome of which, he submits, will have a bearing on the present substantive appeal. In oral submissions he also suggested he had encountered difficulties in getting access to the High Court file.

[6] It is convenient at this stage to outline the background to the present proceedings which culminated in the successful strike out application, before going on to consider the merits of the appellants’ application. In the judgment the subject of the appeal the background facts are summarised by Gendall J as follows:

The relevant facts have their origins in two events. The first was the carrying out of a piped diversion of a stream, (the Kawau Stream) which diversion ran across the land owned by Trade Lines Limited pursuant to an arrangement between Mr Faloon’s father now deceased, and the Palmerston North City Council. Trade Lines Limited was a Faloon family company. Secondly, there was the taking of a portion of land owned by Trade Lines Limited by the Crown for the purposes of the Palmerston North Airport. At all material times the land was owned by the company and the Crown paid $80,000 to it on account of compensation under the Public Works Act 1981, after the land was taken by proclamation in December 1993. Trade Lines Limited is in liquidation. A claim for further compensation, over and above the $80,000, by the company, remains unresolved but is being pursued by the liquidators of Trade Lines.

An issue arose in relation to the diversion of the stream, which was a dispute over payments for work and designs relating to the diversion, and possible contractual arrangements between Mr Faloon’s father and the Palmerston North City Council.

Trade Lines Limited, however had gone into liquidation and the liquidators wished to sell the retained piece of land. This led to the lodging of a number of caveats by Mr Faloon and his sister and also by Mr Faloon’s wife. They sought to prevent the sale. Caveats were also lodged in respect of the airport land which was said to protect an “easement in gross” over such airport land, but was, it seems really no more than a fiction; see the decision of Ellis J in Faloon and Piesse v District Land Registrar [1997] 3 NZLR 498. But Trade Lines Limited had purported to create, in 1993, in favour of the other Faloon family company, Central Equipment what was said was a “drainage easement

in gross” so as to endeavour to provide some platform to pursue a claim in respect of the stream diversion.

[7] The judgment mentions other judgments that have been delivered in proceedings in the High Court in which it was found that none of Mr Faloon, his sister, his father’s estate or Central Equipment Ltd had an interest in the land concerned. The true position was consistently found to be that the relevant land had been owned by Trade Lines Limited a company linked to Mr Faloon’s family but which was in liquidation. The sale of such land as remained, after the acquisition of part for airport purposes, in due course took place. When the purchasers proceeded to subdivide that land they discovered a caveat had been registered on the title claiming an “easement in gross”, which hindered registration of their transfer. Successful applications were made to the High Court to remove the caveats and other impediments to registration of the purchaser’s interest.

[8] The proceedings which were the subject of the judgment of Gendall J, the subject of the appeal, were brought against the Registrar-General of Land and alleged that ten entries on the Register had been made through omission, mistake or misfeasance. Six of those entries related to the proclamation taking the land for airport purposes, and four to the transfer of the balance of the land to purchasers by the liquidators of Trade Lines Limited. After referring to what he described as “the extremely convoluted and, in my view, prolix pleadings in the statement of claim” Gendall J held that they did not establish any reasonable cause of action. He went on to give his reasons:

Both these causes of action however cannot have any tenable or possible basis to succeed given that repeated High Court decisions have held that none of the plaintiffs have had any interest in the land. None of the plaintiffs have suffered any loss by any action of the Registrar of Lands, they never having interest in land taken by proclamation, or sold by the liquidator of the registered proprietor of Trade Lines Limited. There is absolutely no foundation for a claim for compensation or damages under the Land Transfer Act 1952. Only under the Public Works Act 1981 can compensation be sought for the taking of land and the liquidators of Trade Lines Limited are pursuing this.

The plaintiffs seek to claim as “trustees” for the late father of Mr Faloon, but he too had no interest in the land. The short point is that the interest in the land for which compensation is payable or may be

payable, or for the loss of which may afford damages, is that of Trade Lines Limited and the liquidators are pursuing that matter. If there is any claim in contract arising on behalf of the deceased, and assuming liquidation issues do not arise, then that is another matter.

[9] In Airwork (NZ) Ltd v Vertical Flight Management Ltd [1999] 1 NZLR 29 this Court outlined the approach required of it to an application under Rule 10 for extension of time to file a case on appeal and seek a fixture. Blanchard J, delivering judgment of the Court, stated of Rule 10

The new rule implements the philosophy that once a matter has been the subject of a determination in the High Court, any party wishing to challenge that determination by an appeal to this court must do so expeditiously or forfeit the right to pursue the appeal. It is thus required of appellants that they should have the case on appeal prepared and lodged within six months of the filing of the appeal and an application for a fixture made to the Registrar of this Court within the same period.

His Honour later said:

...where an application has been made under R 10(2) within the six- month period and the Court is satisfied that there is sound reason for allowing further time and that the appeal is not devoid of merit, the Court will grant the indulgence of an extension of time as a matter of normal practice.

[10] As we have said, at the hearing of the application Mr Faloon outlined to us certain difficulties he had encountered in gaining access to the High Court file for the purposes of preparation of the case on appeal. While doubting that he was able to demonstrate sound reasons for the delay we indicated at the hearing he should focus his submissions on demonstrating that the appeal had some merit. He sought to do so at length in oral submissions both in support of the application and later in reply to submissions made by Mr Oliver, Crown Counsel. In the course of questions from the Bench to Mr Faloon and Mr Oliver we were able to ascertain more information about the concerns giving rise to the appellants’ proceedings. The discussion which follows represents the outcome of our endeavours to see the rather confused claim the subject of the appeal in the most positive possible way from the appellants’ perspective.

[11] The claim arises from the personal interest Mr Faloon and the estate of his late father, Mr T J Faloon, claim to have in the pipeline constructed in part on the land formerly owned by Trade Lines Limited through which the Kawau Stream has been diverted.

[12] In his submissions to us Mr Faloon has characterised the appellants’ claimed personal interest in various ways. At different times he has described it, for example, as an easement in gross, as a “specialty” and as a chattel interest in land. The essential contention however is that the appellants have a proprietorial interest which derives from the work done and materials supplied personally by the Faloons in relation to the design and construction works. That proprietorial interest is said to have suffered from irregular entries on the certificate of title of the land through which the pipeline runs or at least those parts of it which have been either taken by proclamation or sold to third parties. It is contended that the Registrar General of Lands is responsible for registration of these irregular instruments and on that account the Crown is liable for substantial damages.

[13] It is alleged Mr Faloon and his father were not compensated or inadequately compensated for their original work and materials and that as a result they have retained an ownership interest in the pipeline. In the course of Mr Faloon’s oral submissions to us it also became apparent that the grievance of the appellants has been exacerbated by what is seen as the great benefit derived by the airport from the stream diversion works that were undertaken with support of contributions by the Faloon family. The interest they claim they retain is said to be independent of any interest held by Trade Lines Ltd, the owner at the time of the relevant land through which the pipeline passed.

[14] When the Court considers applications to strike out a statement of claim because it fails to disclose a tenable course of action the facts asserted are assumed to be provable. It is inappropriate therefore for us to consider different versions of how the pipeline came to be constructed in reports of other cases. We proceed on the basis that Mr Faloon can prove what he has pleaded, and in particular what he has told us, as the basis of this claim.

[15] What is of fundamental importance to our decision on the application is that if this appeal were to proceed to a hearing there would be two major obstacles that the appellants would face. The first is that the length of pipeline in issue is within the land formerly owned by Trade Lines Limited, a company formerly controlled by Mr Faloon’s family but now in liquidation. In our view it is beyond argument that the length of pipeline became part of the land owned by Trade Lines Limited on its construction and therefore property of the owner of the land through which it passed to the exclusion of all other ownership interests. There can accordingly be in law no interest in the pipeline, enjoyed by any of the appellants, such as could possibly found an action claiming an ownership interest. That is the essential nature of the claim which the appellants wish to go to trial. The contention there is Crown liability to the appellants, which depends on showing the appellants have been deprived of interests in land through errors in the registration process, is accordingly hopeless. For this reason alone there is no basis for tenable argument that the judgment of Gendall J dismissing the proceeding should be reversed on appeal.

[16] We would however add that the appellants, and in particular Mr Faloon, in the proceeding the subject of this appeal are plainly relitigating against the Crown issues already decided adversely to them in their various previous proceedings. For example, as already indicated, the claim by Mr Faloon that the appellant has an entitlement to an easement in gross over the land taken for airport use was the subject of a judgment of Ellis J reported in [1997] 3 NZLR 498 which rejected that claim. It is unnecessary for us to discuss the several other judgments of the High Court in other proceedings which had the same outcome. It is an abuse of the process of the Court to continue to assert grievances long since addressed and finally decided.

[17] We are satisfied that each of these obstacles to the claim succeeding is insuperable and accordingly that the present appeal (treating as within its scope the related Rule 264 application) is entirely lacking in any prospect of success.

[18] Accordingly, applying the “not devoid of merit” test stated in the Airwork (NZ) Ltd case, we hold that we do not consider that there is any good reason to allow Mr Faloon an extension of time for the preparation of his appeal. The Court is

firmly of the view that the appeal is devoid of any merit. It would be wrong for the Court to exercise its discretion to keep a hopeless appeal alive in those circumstances.

[19] We refuse the application by the appellants for an extension of time. The appeal and Rule 264 application are accordingly to be treated as abandoned. The respondent is entitled to costs in the sum of $1,500 together with reasonable disbursements to be fixed if necessary by the Registrar.

Solicitors

Crown Law Office, Wellington, for Respondent