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Court of Appeal of New Zealand |
Last Updated: 27 April 2018
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PETER DANIEL STAITE AND ORS AS TRUSTEES AND AS REPRESENTATIVES OF THE BENEFICIARIES OF THE WHAOA NO 1 LANDS TRUST First Respondents PETER DANIEL STAITE AND ORS AS TRUSTEES AND BENEFICIARIES OF THE NGĀTI WHAOA MĀORI RESERVATION Second Respondents EDIE TE HUNAPO MOKE AND PIPI PHEOBE MOKE AS PERSONAL REPRESENTATIVES OF THE ESTATE OF EDWARD PAURINI MOKE, AS A FORMER TRUSTEE OF THE WHAOA NO 1 LANDS AND NGĀTI WHAOA MĀORI RESERVATION Third Respondents |
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Hearing: |
19 February 2018 |
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Court: |
Asher, Brown and Clifford JJ |
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Counsel: |
M S McKechnie and AFS Vane for First and Second Applicants J B Orpin-Dowell and J P Koning for First and Second Respondents No appearance for Third Respondents |
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Judgment: |
20 April 2018 at 12.30 pm |
JUDGMENT OF THE COURT
____________________________________________________________________
REASONS OF THE COURT
(Given by Clifford J)
Introduction
[1] The first respondents, the trustees of the Whaoa No 1 Lands Trust (Whaoa), have for some time leased land to the applicants, the trustees of the Tumunui Lands Trust (Tumunui). That leased land is adjacent to land owned by the second respondents, the trustees of the Ngāti Whaoa Māori Reservation (the Reservation Trust).
[2] In March 2017 Heath J gave judgment on a dispute involving, amongst other things, the terms of the lease between Whaoa and Tumunui.[1] On 19 October 2017 Tumunui filed a notice of appeal against that judgment (the first judgment), and two subsequent decisions of Heath J:
- (a) of 27 July 2017 (the second judgment), correcting under the slip rule an obvious error relating to the date on which the lease from Whaoa to Tumunui began;[2] and
- (b) of 22 September 2017 (the third judgment) granting a recall application by Tumunui.[3]
[3] The Deputy Registrar rejected that notice of appeal. He said Tumunui could not appeal more than one judgment in a single notice of appeal. Moreover, Tumunui’s appeals against the first and second judgments were by then out of time.
[4] Tumunui reviewed that decision. Miller J was satisfied that a single notice of appeal might, if nothing turned on it, address more than one decision. But here, by the time Tumunui’s notice of appeal was filed on 17 October, it appeared to be out of time as regards the first judgment. Moreover, the fact that the second and third judgments concerned a recall application suggested that time ran from the first judgment.
[5] In the interests of practicality, however, Miller J directed that the notice of appeal of 19 October 2017 be accepted as an effective notice of appeal against the third judgment, and be treated as an on notice application under r 29A for leave to appeal the first and second judgments out of time (if indeed they were).
[6] On that basis, Tumunui applies for:
- (a) directions that its notice of appeal dated 19 October 2017 were filed properly and within time; or, alternatively
- (b) orders granting leave to bring those appeals out of time.
Facts
[7] A degree of confusion was occasioned by the terms of Heath J’s judgments, and by the way this matter came before us. In the hope of avoiding similar confusion in the future, we set out, in more detail than might normally be called for in a judgment such as this, our understanding of the factual background to these applications.
[8] In the substantive proceedings, and as relevant, Whaoa sought relief against Tumunui based on alleged breaches of fiduciary duties on the part of a common trustee (Mr Moke). Those breaches, Whaoa said, had caused it to agree to Tumunui originally acquiring the lease from the previous lessee and, when the validity of that lease was questioned, to renewing and extending that lease on a materially disadvantageous basis.[4] Having found that Mr Moke had breached his duties to Whaoa the question for Heath J became the appropriate relief to order. Whaoa sought rescission of the lease or alternatively damages. Tumunui resisted rescission, particularly given the improvements to the land it had been responsible for during its time as lessee and the losses it would incur if, without compensation as provided in the lease, the lease was terminated.
[9] On the question of relief, and in the first judgment, Heath J reasoned:
- (a) The renewed and extended lease had erroneously excluded from the capital value of the land, and therefore from the basis on which lease payments were calculated, improvements made by the original lessee.[5] Only improvements made by Tumunui itself should have been so excluded.[6] That error had, he concluded on the basis of the expert evidence he had heard, resulted in a significant advantage to Tumunui and a like detriment to Whaoa.[7]
- (b) Whilst Mr Moke was not responsible for that error, the question was whether Tumunui should be entitled to retain the benefit of the wrongly expressed rental formula, having regard to Mr Moke’s involvement in negotiations for the new lease on both sides of the transaction.[8]
- (c) Heath J was satisfied that some relief was required, but was not persuaded that rescission or an order for damages was appropriate. On his own initiative during the hearing he raised with counsel the possibility of rectification and sought submissions on the point.[9]
- (d) Heath J concluded that the lease should, indeed, be rectified.[10] To do so would do no more than remove a benefit Tumunui was never intended to receive.
[10] The relevant clause in the lease had read that rent should be paid:
... at a yearly rental calculated on the basis of five dollars per centum of the capital value of the said land according to a special valuation carried out by Valuation New Zealand ... provided always that for the purposes of such valuation there shall be deducted from the said capital value the value of all improvements made on or to the said land by the lessee or its predecessor since the 13th day of December 1961 and during the terms hereof by the lessee and subsisting at the date of valuation ...
(Emphasis added).
Heath J ordered rectification as follows:[11]
I make an order for rectification of the Tumunui lease to remove the words “or its predecessor since the 13th day of December 1961 and” from the Tumunui lease.
[11] So, the effect of the order was to remove the italicised words from the lease. The Judge then explained:[12]
The effect of that order is to require rental to be fixed in accordance with the formula in the lease but taking into account only improvements to the land made by the Tumunui Trust since the lease commenced, on 1 July 1992. The consequence of this order is that adjustments will need to be made to the rent fixed for earlier periods.
[12] In delivering judgment in those terms, Heath J reserved leave to any party to apply for further directions.[13]
[13] Subsequently, two issues were raised:
- (a) First, the parties pointed out that the Tumunui lease had commenced on 13 December 1992, not 1 July 1992. In the second judgment Heath J corrected that error in his explanation pursuant to the slip rule.
- (b) At the same time, the parties drew to Heath J’s attention the fact that Tumunui had gone into possession of the land in 1989, and had undertaken substantial improvements prior to the formal commencement of the lease on 13 December 1992. The question was, therefore, whether those improvements should — in terms of the substantive judgment given — also be excluded from the capital value of the land for the purpose of calculation of rent due from Tumunui to Whaoa. Heath J considered that question was appropriate for a recall application.
[14] It is that invited application for recall that was the subject of the third judgment. There Heath J varied not the terms of the original rectification order itself, but rather his explanation of its effect.[14] He now noted its effect was that improvements effected by Tumunui since it went into possession of the land in 1989 were to be excluded from the capital value of the land for the purpose of the calculation of rent.
Analysis
[15] In its notice of appeal of 19 October 2017 Tumunui challenged the order for rectification Heath J made in the first judgment. No such order should have been made at all. Alternatively, Heath J had been wrong to do so on the basis of the limited evidence he had heard. Whaoa’s response to these applications would allow Tumunui to challenge the basis of rectification (the third judgment), but not whether rectification should in fact have been ordered at all (the first judgment).
[16] In advancing these applications, Tumunui argued that, until the third judgment had been given, the first judgment was still at large: of necessity, any appeal against the first judgment as recalled and reissued, following the third judgment, would involve the substance of the first judgment. On that basis, it had filed its appeal against the first judgment in time. If it had not, then in terms of the principles outlined by the Supreme Court in Almond v Read,[15] and applied by this Court in Edel Metals Group Ltd v Geier Ltd,[16] these were circumstances which clearly called for the grant of leave.
[17] For its part, Whaoa argued that Tumunui’s actions in applying for correction of the first judgment under the slip rule and for its recall as granted in the third judgment, were inconsistent with its now signalled intention to appeal Heath J’s rectification order. If Tumunui had all along intended to appeal, then it should have done so. Tumunui’s in time notice of appeal against the third judgment was sufficient for justice to be done: while Tumunui would not be able to challenge the relief of rectification itself, it could challenge the consequences of that relief.
[18] We acknowledge that, in the circumstances which have arisen here, the question of whether Tumunui’s appeal against the first judgment was in time is not without difficulty. It is not necessary for us, however, to resolve that technical issue here. Rather, in terms of the principles that apply to applications for extensions of time to appeal, we are satisfied that the application should, to the extent necessary, be granted for Tumunui to appeal the first judgment as it gave notice of its intention to do so on 19 October 2017.
[19] This is a long running dispute. Since the release of the first judgment the parties have dealt with each other as regards to the resolution of that dispute on an ongoing basis. Both parties were aware that Heath J had himself raised the issue of rectification and that, whilst they had had the opportunity to make submissions on that prospect, little or no evidence had been placed before the Court on the comparative commercial consequences of termination, albeit without compensation, and rectification. Moreover, the disconnect between Mr Moke’s breach of duty and the error as to rent calculation which Heath J focused on may question the appropriateness of rectification. These are in our view issues which, given the long history and complex nature of this dispute, Tumunui should be permitted to have determined on appeal.
[20] We can, moreover, identify no material prejudice to Whaoa associated with the possible delay we have identified involved in Tumunui filing its notice of appeal against the first judgment. The case has been proceeding for many years, and any delay has been of comparatively short duration.
Result
[21] The application for an extension of time to appeal is granted.
[22] The first and second respondents must pay the applicants one set of costs for a standard application on a band A basis and usual disbursements.
Solicitors:
Le Pine &
Co, Taupō for Applicants
Koning Webster, Papamoa for First and Second
Respondents
[1] Staite v Kusabs [2017] NZHC 416. Those proceedings also concern an issue between Tumunui and Whaoa involving the Reservation Trust. That aspect of the proceedings is not relevant here.
[2] Staite v Kusabs [2017] NZHC 1758.
[3] Staite v Kusabs [2017] NZHC 2299.
[4] Staite v Kusabs, above n 1, at [170].
[5] At [210].
[6] At [210].
[7] At [214].
[8] At [214].
[9] At [205].
[10] At [213].
[11] At [262(b)].
[12] At [262(b)].
[13] At [262(c)].
[14] Staite v Kusabs, above n 3, at [46].
[15] Almond v Read [2017] NZSC 80, [2017] 1 NZLR 801.
[16] Edel Metals Group Ltd v Geier Ltd [2017] NZCA 359.
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