Staite v Kusabs [2012] NZHC 3402 (14 December 2012)

BETWEEN PETER DANIEL STAITE, JEAN TANIRAU-CARSTON, DEBORAH PAKAU, LEONIE REI NICHOLLS AND BRUCE ANDERSON BAMBER Plaintiffs

AND ANDREW KUSABS, DONALD BENNETT, JULIAN KEPA AND WILLIAM WAKA AS TRUSTEES OF THE TUMUNUI LANDS TRUST Defendants

D Chesterman, Barrister, Auckland – damian@chestermanlaw.co.nz/john@kwlaw.co.nz

PETER DANIEL STAITE, JEAN TANIRAU-CARSTON, DEBORAH PAKAU, LEONIE REI NICHOLLS AND BRUCE ANDERSON BAMBER V ANDREW KUSABS, DONALD BENNETT, JULIAN KEPA AND WILLIAM WAKA AS TRUSTEES OF THE TUMUNUI LANDS TRUST HC ROT CIV 2009-463-000888 [14

[1] The plaintiffs apply for leave to file an amended statement of claim. Leave is sought to add further causes of action, to add two new defendants, to remove the second plaintiff, and to divide the current first plaintiffs into separate first and second plaintiffs. Also directions are being sought by the plaintiffs as to their “representative nature”.

[2] This proceeding was filed on 18 December 2009. The intituling showed the proceeding was filed under the Trustee Act 1956 and Declaratory Judgments Act

(b) Is a beneficiary of the Whaoa Reserve as a member of Ngati Whaoa. [4] The defendants were noted to be “the continuing trustees of the Tumunui

529.8624 hectares to form RP8. At the same time an order was made vesting that land in seven persons including Mr Bruce Bamber (who is the only remaining trustee of RP8) and Mr Edward Moke who died in late 2003.

(b) On 13 December 1985 those trustees as lessors and H Allen Mills & Son Limited (Mr Mills) as lessee, entered into a lease of the RP8 land for 21 years.

(a) On 18 October 1985 the trustees of the Whaoa Trust and Mr Mills entered into a partial surrender of the memorandum of lease whereby

(b) Two weeks later the Maori Land Court made a recommendation that the land released was to be set aside as the Whaoa Reserve for the purposes of a timber reserve, catchment area and a place of historical interest for the benefit of the owners, their descendants and Ngati Whaoa. At that time the Court appointed the trustees of RP8 to be the trustees of the Whaoa Reserve.

(c) By June 1989 the trustees of the Tumunui Trust had taken over exclusive possession of RP8 excluding the Whaoa Reserve from Mr Mills. Then, the Tumunui Trust converted the land from dry stock grazing to a dairy unit, this conversion being completed by 1 June

(d) On 15 July 1989 the trustees of the Tumunui Trust requested an extension of Mr Mills’ lease to 42 years from 1 June 1990. In the following year by November 1990 the parties agreed that Mr Mills’

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		lease be terminated and that a new lease be entered into between the Whaoa Trust and the Tumunui Trust.
	(e)	In March 1992 the trustees of the Whaoa Trust instructed surveyors to undertake a land survey for the purpose of defining the area to be
		leased by the Tumunui Trust. In the plan prepared it depicted the Whaoa Reserve as comprising 158.1600 hectares that being 15.8
		hectares less than the area of land set aside when the partial surrender of lease occurred in 1985.
	(f)	On 4 April 1992 there was a general meeting of the Whaoa Trust where the chairman advised that the Tumunui Trust had leased RP8
		for conversion to a dairy unit.
	(g)	On 16 November 1992 the trustees of both trusts agreed on the terms
		and conditions for a new lease of RP8 and on 3 December 1992 those terms and conditions were confirmed at a meeting held at the home of
		the chairman of the Whaoa Trust whereby RP8 was to be subdivided into the two lots, one of which comprised the Whaoa Reserve, the
		balance being leased to the Tumunui Trust.
	(h)	A deed of lease was completed on 16 February 1994 and on 23 June
		1994 the Tumunui lease was registered.
	(i)	The plaintiffs claim that the Tumunui lease contains 15.8583 hectares
		of land which belongs as part of the Whaoa Reserve.
[7]	The	plaintiffs say that Edward Moke the then chairman of the Whaoa Trust

was responsible for the error that has occurred. The claim against him has been brought as a breach by him of a fiduciary duty and because he was the chairman at that time of the Whaoa Trust and was as well a trustee of the Tumunui Trust. It is claimed that in that latter capacity he enabled the Tumunui Trust to obtain an advantage and that he did this by encouraging the trustees of the Whaoa Trust to approve the terms and conditions of the Tumunui lease; that the Tumunui lease was

Trust”; and that the Tumunui lease was not approved by resolution of the beneficiaries of the Whaoa Reserve.

[8] By way of relief the plaintiffs seek declarations that Mr Moke breached his fiduciary duty by entering into the Tumunui lease as a trustee of both the Whaoa and the Tumunui Trusts and upon that basis the Tumunui lease should be set aside as a breach of the rule against self dealing.

(b) That he was not present when the terms of the acquisition of the lease from Mr Mills was settled.

(c) That the Whaoa Trust was throughout represented by lawyers. (d) The Tumunui Trust has substantially improved the land.

(e) The plaintiffs’ income has been substantially increased because of those improvements.

(g) At no time in 1989 and 1990 were the plaintiffs in a position to effect improvements of the land undertaken by the Tumunui Trust.

(h) Leasing arrangements were completed by Mr John Price on behalf of the Whaoa Trust and Mr Kusabs and Mr Bennett on behalf of the Tumunui Trust.

(b) The plaintiffs have issued proceedings against the defendants in the Maori Land Court (Waiariki District) which raise issues which overlap the present proceeding, and the matter should more appropriately be dealt with in the Maori Land Court.

[11] In a case management conference before me on 22 February 2010 I made orders requiring the parties to complete discovery obligations and directed any interlocutory applications be filed by 11 June 2010.

[13] In a case management conference minute dated 25 August 2010 I noted that subject to further inspection being completed, it appeared the matter was ready for a trial to be scheduled. I noted also:

Mr McKechnie expressed confusion over the purpose of the proceeding if it is, as it appears, the plaintiffs are endeavouring to cancel an arrangement which has endured for 20 years and profitably for all concerned. Mr McKechnie asserts no loss has been pleaded or identified. Rather, the claim is based on an alleged conflict of interest involving a now deceased member of the trust board.

[15] On 27 October 2010 I directed a four day trial be scheduled. Concerning the Tumunui Trust lease I noted that any irregular dealings by Mr Moke were denied because another had been involved with negotiations on behalf of the defendant.

had immediately filed a memorandum seeking an urgent telephone conference with respect to the scheduled trial. It noted that the plaintiffs had not then yet filed their briefs of evidence; that Mr Chesterman considered it was necessary to seek leave to amend the statement of claim; that Mr Chesterman was not available for a trial on the scheduled date; and that both counsel agreed that the trial date be vacated.

[18] The trial was duly vacated by order of Priestley J on 2 February 2012 who at that time rescheduled the trial to begin on 17 September 2012. Then on 26 July 2012

Lang J noted that the Court had been forwarded a copy of documents recently filed in the proceeding by the plaintiffs. He concluded that the September trial would have to be vacated and directed accordingly.

[19] The matter then came before me in a case management telephone conference on 23 August 2012. I noted that the plaintiffs had filed an application to file an amended statement of claim and that in a lengthy memorandum plaintiffs’ counsel explained the reasons for seeking to add additional causes of action. The defendants indicated they opposed the application for amendment. In the outcome I timetabled the matter for hearing before me today.

(b) In April 2012 trustees of the plaintiffs disclosed further documents to its solicitors and counsel which revealed new factual information relevant to the pleading which has resulted in the need for amended pleadings.

controversy goes to trial in order to secure the just determination of the proceeding.

[21] In support of the application for leave to file, an affidavit has been filed by Mr Peter Staite, a trustee and the chairman of the Whaoa Trust and a trustee of the Whaoa Reserve. He deposes that:

(a) Additional documents have recently been disclosed to counsel by the plaintiffs.

(b) That these result in a significant change in the pleadings. [22] Mr Staite says:

(a) The amended statement of claim was due to be filed by 1 June 2012 but this was not possible because:

(i) In April 2012 the then Secretary of the Whaoa Trust, who had subsequently resigned, provided documents to counsel which either had been or had come into her possession but which had not been disclosed by her previously.

(ii) That counsel determined that the content of those documents meant the original statement of claim would have to be completely redrafted.

(iii) That the additional documents in question would have been discovered and inspected by the defendants.

[23] On 13 September 2012 the plaintiffs filed a second affidavit of documents, but not until 3 December 2012 were the defendants able to inspect those documents.

(a) That the majority of the additional causes of action i.e. breach of trust, and undue influence, and pursuant to ss 80 and 81 of the Land Transfer Act 1952, are re-expressions of the existing pleading arising as a consequence of discovery and relies upon identical facts to the existing pleading, except in relation to the pleading as to the defendants knowledge.

[25] It is said a new prospective was brought to the case following the appointment of new counsel and upon an analysis of the disclosure by the plaintiffs of additional documents. Mr Chesterman submits that the amended statement of claim:

(b) The provision of better particulars has brought a greater focus to the proceeding.

(c) The division of the defendant into two separate defendants and the division of the plaintiff into two separate plaintiffs assists with distinguishing the different roles and liabilities of each and with focussing the issues for trial.

(d) The amendments to relief sought provide better clarity to an issue that would have been dealt with at trial if the plaintiffs were successful.

[27] The plaintiffs’ position is now that the trustees are also entitled to be plaintiffs in their capacity as representatives of the beneficiaries; and that the pleading should separate the Whaoa Trust and the Whaoa Reserve Trust as plaintiffs, the first acting

[28] The reason for splitting the plaintiffs is because the owner trustees and the beneficiaries are not identical; that the claim that 15.8 hectares of land which belonged to the Whaoa Reserve Trust is better approached by recognising the Whaoa Reserve Trust separately; that two new causes of action, one concerning ss 80 and 81 of the Land Transfer Act 1952 enabling a title to be recalled for the purpose of correcting an error of description in it, and the other relating to a claim of breach of right of way are brought solely by the Whaoa Reserve Trust; and that the loss of the

15.8 hectares strip requires separate consideration in terms of damages claimed.

The proposed new second defendants are already part of the group of first defendants as current trustees of the Tumunui Trust... [that] their separation as defendants recognises that they are the only current trustees who were trustees between 1989 and 1995 when the lease was negotiated and executed and when Mr Moke was acting as their agent.

The difference in status is important in relation to pleading their knowledge and liability at the time of the lease being negotiated and executed, and subsequently their existing co-trustees’ liability to the extent of the lease.

[31] Hence, pleadings of breach of fiduciary duty involving current co-trustees; of a breach of trustees’ duties; of undue influence; and of knowing receipt is pursued separately against the second defendants.

[32] The new third defendant is the estate of Mr Moke who is identified by the first proceeding but was not joined as a separate defendant. It is said that it is important that defendant be separately heard in connection with declarations sought against the estate.

[33] As to the pleading of a breach of trustees’ duties it is now pleaded in the alternative to a breach of fiduciary duty and recognises, it is said, that a trustee may be liable for a breach of trustee’s duties and a trust deed even if such breaches do not rise to the level of fiduciary duties.

The bulk of the factual basis of this cause of action is already within the existing statement of claim [and that in the amended statement of claim] the pleading is a natural legal extension which recognises the controlling power that Mr Moke had within the plaintiffs trusts, due to his status, which caused his co-trustees to agree to his wishes.

[35] Mr Chesterman says that the new pleading was able to be particularised as a consequence of the new documents discovered, and from briefing witnesses.

[36] As to the new pleading of knowing receipt/unjust enrichment it is claimed that during a review of recently disclosed documents it became apparent that Mr Moke had worked in favour of the Tumunui Trust’s interests by failing to provide complete information to his co-trustees of the Whaoa Trust and that it was only once these particulars were known that this cause of action could be sufficiently pleaded.

1952 arise, it is said, because of recently disclosed documents which provided the necessary information as to how the loss of 15.8 hectare strip came about and which has enabled the pleading of this aspect of the claims as a separate cause of action.

[38] The new cause of action relating to a breach of right of way arises because of new factual allegations in relation to the issues involved.

(b) Rescission, to the extent that the amended claim particularises terms that would apply to any such order;

(d) Exemplary and punitive damages, as arises from a review of all documents now available.

[40] Leave to file an amended statement of claim is required after a trial setting down date has been fixed. If there is a reasonable explanation for the delay the Court will examine the merits of the amended pleading to determine whether it should be admitted. A Judge can at any stage of a proceeding strike out or add new parties.

(a) The plaintiffs are in doubt as to whether certain persons are required to be served with the pleading, so directions are sought in this regard.

(b) The actions brought under ss 80 and 81 of the Land Transfer Act 1952 enable the District Land Registrar to be engaged if formalities require it in due course.

(c) The plaintiffs require confirmation that the trustees of the ownership unit (the Whaoa Trust) and of the Reserve (the Whaoa Reserve Trust) be separately identified in the proceeding.

[42] There is presently no trial date set and the current defendant will not be prejudiced by the amendments and there will also be sufficient time for any new party to prepare for trial.

[43] The majority of the additional causes of action are in effect a re-expression of existing pleadings. The claim of knowing receipt arose as a consequence of discovery after the plaintiffs pleading was filed and relies upon identical facts to the existing pleading except in relation to the pleading as to the defendants’ knowledge.

[44] Further information has arisen from disclosure. Also, the case is legally and factually complex.

[45] The new pleading more accurately and completely pleads law; the real controversy is now before the Court by provision of better particulars; that the division of the first defendant into two separate defendants and the plaintiffs into two separate plaintiffs assists with distinguishing the different roles and liabilities of each and with the focussing of issues for trial; and better clarity is brought to the issues.

[46] Mr Chesterman has endeavoured to construct for the plaintiffs a new pleading by reference to documents in existence in that period of 1988 – 1992 which give rise to the plaintiffs challenge to the lease arrangements which concluded with the lease granted to the Tumunui Trust in 1990 and which arrangements were altered in 1992 with the creation of the Whaoa Reserve, following which in 1994 the Tumunui lease was registered.

[47] In Mr Chesterman’s reconstruction of a chronology he has referred to documents discovered by both the Whaoa plaintiffs and the Tumunui defendants. Mr Chesterman concludes from these that Mr Moke and trustees of the Tumunui Trust arranged to acquire Mr Mills’ lease without the Whaoa trustees being aware of this; that as at late April 1989 Tumunui had not informed Whaoa they had purchased that lease and Mr Moke had not informed his Whaoa co-trustees of this; that Mr Moke

was involved with securing the agreement of the Whaoa Trust to extend the term of the lease.

[48] In this background of matters it is claimed Mr Moke was instrumental in the subdivision process which resulted in less land being incorporated in the Reserve land than had originally been intended.

[49] I will later in this judgment give my assessment of the evidence available to support those conclusions. I will do that as part of my inquiry into the merits of the case filed to justify the granting of leave.

[50] In the outcome, it is submitted for the plaintiffs that it is appropriate to re plead the original claim of 8 pages comprising 40 paragraphs containing a single cause of action of an alleged breach of the rule against self dealing, into a document of 41 pages comprising 161 paragraphs and containing 6 causes of action.

[51] As did the original proceeding, so too with the amended pleading all causes of action are premised on obtaining orders for equitable relief.

[52] Notwithstanding the somewhat significant change undertaken in the process, Mr Chesterman submits that in essence the two pleadings focus upon the same events which occurred more than 20 years ago. Rather, it is because of the new material discovered but also in that outcome the opportunity to formulate with greater clarity the responsibilities and obligations of key personnel, that has given rise to the considerably expanded pleading.

[53] Mr Chesterman’s submissions have been framed around explaining the reasons why particular causes of action have been pleaded by reference to duties owed and where breaches of those arguably occurred.

[54] In Mr Chesterman’s review of each of the new six causes of action pleaded he concludes with the submission that none of them is subject to limitation because equitable relief is sought.

[55] By way of explanation for joining Mr Moke’s estate as a separate defendant in the claim, Mr Chesterman observes that as against the estate only declarations are sought and are not damages and accordingly it is not a defence that the assets of his estate have been distributed. He submits it is appropriate Mr Moke’s estate be provided an opportunity to join the proceeding.

[56] As to the joinder of Mr Kusabs and Mr Bennett as first defendants, Mr Chesterman explains that they are the only current trustees who were in that role at the date of the lease negotiations. He submits accordingly that knowledge may be imputed to them and liability attached to them on the basis of that knowledge, which might not necessarily apply to the remaining current trustees.

[57] In the first statement of claim it is pleaded that the lease agreement was reached with the Tumunui Trust in around November 1990; that a formal memorandum of lease was not signed until 16 February 1994 and that was registered on 23 June 1994.

[58] The plaintiffs insist the amended statement of claim is essentially the same claim differently expressed. It is equally clear that the plaintiffs’ claims now assert a whole range of legal obligations not previously raised.

[59] Negotiations for the transfer of the lease to Tumunui were conducted over a period of 6 – 7 months. The evidence is that in June 1989 the Whaoa Trust confirmed its agreement that Tumunui take assignment of the extended Mills’ lease and Tumunui take possession. In July 1989 the Whaoa Trust consented to the transfer of the lease to Tumunui.

[60] Between June 1990 and 16 February 1994 the parties and their solicitors negotiated terms for the extended lease. Mr Moke signed the lease as a trustee of the Whaoa Trust and as a trustee of the Tumunui Trust.

[61] From 1987 Whaoa Trust were advised by their solicitors, Davies Burton who in that capacity prepared the lease. The signatures of the Whaoa trustees were witnessed by Mr Burton a senior partner of that legal practice. The evidence suggests also that Judge Patrick Savage of the Maori Land Court (as he now is) also gave advice to the Whaoa trustees in the period leading up to the signing of the lease.

[62] The Tumunui trustees were represented by the Chadwick Bidois law practice and the signature of the Tumunui trustees was witnessed by Mr Chadwick of that firm.

[63] The plaintiffs complaints about the lease are that it provided for a 21 year extension of the term; that the rental payable was significantly below market rental because it was calculated upon the condition of the land as at December 1961 and so deprived the trust of the benefit of any improvements to their land; and that the lease included 15.8 hectares of Reserve land.

[64] Those claims of an unduly long lease period and low rental payment are not explained. Nor can they be assumed. The Whaoa Trust was aware that Tumunui would be converting a poorly maintained dry stock property to a higher producing dairy farm and that significant capital expenditure would be involved.

[65] The rental was a ground rent and was based upon 5 per cent per annum of the capital value of the land. The lease provided for rental reviews every three years. The lease did not provide for the valuation of significant improvements but that is not unsurprising as all improvements were to be funded by Tumunui. Also, there was no compensation for improvements at the termination of the lease, all of which would then become the property of the lessor. As at November 2002 the value of the land including improvements was calculated at $1,469,650. The annual rental of 5 per cent payable at that time was $73,482.50.

[66] Mr McKechnie has drawn the Court’s attention to a dispute in 2011 when the Whaoa Trust gave notice of multiple alleged breaches of lease. This resulted in arbitration before Barry Paterson QC. In part the Arbitrators Award records the following:

[67] Mr McKechnie reports that all of the Whaoa claims of an alleged breach of lease were rejected by the Arbitrator and that a significant costs award was made against Whaoa.

[68] At the core of the plaintiffs’ claims is that throughout the negotiations of the Tumunui lease Mr Moke controlled the decisions made by the trustees of the Whaoa Trust and the Whaoa Reserve Trust.

[69] However, no particulars are given about how that control was alleged to have been made or how it is claimed any undue influence is said to have been exercised.

[70] Clearly Mr Moke owed fiduciary duties in his capacity as a chairman of the Whaoa Trusts because he was himself a beneficiary of those. Also he was a beneficiary of the Tumunui Trust. It is not at all clear what conclusions can be

drawn to show the benefits receivable as a beneficiary of one or other of the trusts. The plaintiffs plead that there are 186 beneficial owners of RP8 holding 157,050 shares between them; that approximately 80 per cent of the beneficiaries of the Whaoa Trust are, due to marriage, also beneficiaries of the Tumunui Trust.

[71] The plaintiffs pleaded that Mr Moke was the controlling decision maker within the Whaoa Trusts, but no particulars are provided. Certainly Mr Moke’s signature was not the only one provided on behalf of the Whaoa Trusts.

[72] It seems clear evidence that Mr Moke’s position as a trustee of all trusts was a

[73] Significant assumptions are drawn by the plaintiffs pleadings that Mr Moke did not inform his co-trustees of the Whaoa Trust, that the Tumunui Trust had already purchased the lease on its existing terms from Mr Mills; that the Tumunui Trust’s requests for title to be issued was a lending requirement from their Bank; that the 15.8 hectare strip belonging to the Whaoa Reserve Trust had been “illegally cleared and fenced” by Mr Mills and the Tumunui Trust.

[74] Even if all those allegations were made out it does not mean that they were in any way causative of the signing of the lease. There appears no suggestion that Mr Moke was going to benefit personally as a beneficiary of the Tumunui Trust.

[75] The plaintiffs say Mr Moke should have applied to the Court for an order allowing him to remain involved in the negotiations of the Tumunui lease. As Mr McKechnie notes there is no suggestion that any of the legal advisors at any time suggested that a direction should be sought from the Maori Land Court.

[76] Claims of favouring the interests of beneficiaries are vague and unparticularised.

[77] The plaintiffs’ allegations are that the Tumunui Trust used Mr Moke to enable

plaintiffs, but there are no particulars as to how Mr Moke was said to have been

[78] As to the claim that Mr Moke exercised undue influence it is alleged he “had the capacity to influence his co-trustees...”. As a pleading, that is insufficient. The plaintiffs claim that Mr Moke’s co-trustees “did whatever [Mr Moke] wanted them to do, is, as Mr McKechnie submits, an extravagant allegation with no particulars provided in support of it.

[79] It might also suggest that all of the Whaoa trustees may have participated in a breach of trust or in breach of professional obligations. Also those trustees were receiving legal advice from a Rotorua law practice that drafted the lease document in question.

[80] Claims that Mr Moke “disposed of property of the Whaoa Trusts are clearly incorrect because no property was disposed of – the trusts still own the land. The leasehold interest granted to Tumunui did not amount to a disposition. The use of the words “disposed of” provides another example of exaggerated language use.

[81] The plaintiffs’ allegations appear also to implicate Mr Kusabs an accountant in Rotorua for he was for a time the auditor of the Whaoa Trusts. No particulars to support his connection have been provided.

[82] Mr McKechnie draws the Court’s attention to the fact that the plaintiffs claim the second defendants (Mr Kusabs and Mr Bennett) used Mr Moke “to gain favourable terms”. Mr McKechnie submits in truth this is an allegation that the defendants were engaged in some active conspiracy with Mr Moke to defeat the legitimate expectations of the Whaoa Trusts. Mr McKechnie suggests that claim is too farfetched to have any credence whatsoever; that it has been raised for the first time more than 15 years after the lease was entered into – remembering that Tumunui were in possession and actively farming the land well before the lease was finalised and long after the death of Mr Moke. The Court considers Mr McKechnie’s summation of the claim to be appropriate.

[83] It is clear even from Mr Chesterman’s chronology that the plaintiffs have had access to material which they now say is the basis of their claims. It is even claimed that it was not until this year that the plaintiffs became aware of discoverable documents which had been in their possession throughout.

[84] Reasons offered to justify the new and much more substantial pleading in reality provide nothing more than those which justified the pleading that has been filed. After 20 years or so the current trustees of the plaintiffs perceive that the bargain engineered all that time ago does not now favour them. A claim bereft of particulars draws assumptions about a person who was a trustee and beneficiary of both the lessors and lessees claiming he engineered the process and others allowed themselves to be used by him for this purpose from which it is suggested he profited

– even though it is not at all clear that any losses to the plaintiffs occurred.

[85] It is not clear that the amended statement of claim will achieve the purpose of doing justice between the parties.

[86] These observations apart it is not the purpose of this Court at this time to draw any conclusions upon those allegations. Notwithstanding the comments already made regarding lack of particulars and strength (or lack of it) of the plaintiffs claim, at the critical time Mr Moke was a trustee of both trusts. Although the evidence does not suggest there was any misunderstanding about this or any reasons for concern to arise at that time, the plaintiffs’ position is that he should have opted to represent the interests of one or other trust but not both. Although all trusts were receiving separate legal advice at the time action should have been taken by application to the Maori Land Court to avoid any issue of conflict arising – indeed just that same action that the Whaoa Trust did file in 2007. Before then the actions of Mr Moke have not been called into question – not since his death in 2003 nor since Mr Staite’s appointment in 2004.

[87] The 2007 claim before the Maori Land Court raised issues with respect to the size of the area created for the Whaoa Reserve.

[88] It was only with this proceeding filed in September 2009 that the actions of Mr Moke have been focussed upon in claims for equitable relief based on alleged breaches of trustee duties. The focus of that claim now is that Tumunui had reached an agreement with Mr Mills for the assignment of his lease before the Whaoa Trust knew about it when the Whaoa Trust was asked by Tumunui to extend the lease period.

[89] Rule 7.77 provides that an amended pleading may introduce a fresh cause of action which is not statute barred.

[90] The issue of limitation should be considered at the time of application for leave. Mr Chesterman’s submissions are the subject to the principle of Laches, the plaintiffs’ claim by its original statement of claim or by its amended statement of claim are not subject to the provisions of the Limitation Act 1950.

[91] Mr Chesterman relies upon s 4(9) of the Limitation Act 1950 which provides:

(9) This section shall not apply to any claim for specific performance of a contract or of an injunction or for other equitable relief, except insofar as any provisions thereof may be applied by the Court by analogy in like manner as the corresponding enactment repelled or amended by this Act, or ceasing to have effect by virtue of this Act, as heretofore been applied.

[92] Mr Chesterman’s submissions are that this proceeding is about equitable relief and the applications filed for declarations to be made.

[93] It might appear, not only by the Land Valuation Tribunal issues but also by the Maori Land Court claim and the breach of lease arbitration that this proceeding is in reality about the deed of lease which Tumunui says operates to its disadvantage. The deed of lease was registered in 1994. Its terms were clearly agreed upon well before that time.

(3) An action upon a deed shall not be brought after the expiration of 12 (twelve) years from the date in which the cause of action accrued:

Provided that this subsection shall not affect any action for which a shorter period of limitation is prescribed by any other provision of this Act.

[95] It might appear that notwithstanding the claims are expressed in terms of seeking equitable relief and relying upon s 4(9) of the Limitation Act, s 4(3) is not affected.

[96] As to the proposition that time limits may be open ended in cases where equitable relief is sought I refer to the report of the Law Commission of October

1998 referring to “limitation defences in the civil proceedings”. The report noted:

...when claims are made in equity, which are not, as regards equitable proceedings, the subject of any express statutory bar, but the equitable proceedings correspond to a remedy at law in respect of the same subject matter which is subject to a statutory bar, a court of equity, in the absence of fraud or other special circumstance, adopts, by way of analogy, the same limitation for the equitable claim. (16 Halsburys Laws of England (4th ed.) para 1485.).

[97] The plaintiff’s position is that subject to considerations of Laches no time limitation applies.

[98] It is not appropriate in the scope of considerations upon the leave application to consider the limitation issue any further. Although the proceeding is advanced for the purpose of cancelling Tumunui’s lease it is expressed in terms that such lease was concluded with the cooperation of a trustee who had divided loyalties and therefore favoured one over the other and in that outcome breached his trustee obligations to the Whaoa Trust.

[99] It is not clear what reasons have occurred to explain why this proceeding was filed about 20 years after Tumunui’s lease was agreed and 16 - 17 years after formalities resulted in an executed deed of lease. It is not known why claims implicating Mr Moke have arisen about seven years after his death except for reasons explained by the plaintiffs’ discovery of its own material earlier this year.

[100] But the leave application is not about limitation issues because these were not raised upon the defendant’s notice of opposition, and therefore they ought to be left to another time.

[101] Observations about weakness of case and limitation issues apart, there appears no reason but to grant the application for leave to file an amended statement of claim. Although the new is very much bigger than the old, both are about what happened in April 1989. It is just that new counsel has more expansive ideas regarding how the issues arising ought to be pleaded.

[102] Although previous fixtures have been scheduled, no hearing date has presently been fixed. There is sufficient time for the defendants to deal with the issues arising.

[103] Issues of strike out and for security of costs ought to be left for application to be filed in due course.

[105] Costs are to be reserved to be fixed in the outcome of any interlocutory applications to be filed in due course.

[106] This proceeding is adjourned for call in a telephone conference at 9:30am on

14 February 2013. At that time timetable orders will be made. For that purpose counsel are requested to file memoranda with timetable proposals.

High Court of New Zealand Decisions

Staite v Kusabs [2012] NZHC 3402 (14 December 2012)