Attorney-General v Ririnui

[2015] NZCA 173

IN THE COURT OF APPEAL OF NEW ZEALAND

CA336/2014
[2015] NZCA 173

BETWEEN	THE ATTORNEY-GENERAL Appellant
AND	MITA MICHAEL RIRINUI Respondent

CA337/2014
BETWEEN	LANDCORP FARMING LIMITED Appellant
AND	MITA MICHAEL RIRINUI Respondent

CA29/2015
BETWEEN	LANDCORP FARMING LIMITED Appellant
AND	MITA MICHAEL RIRINUI Respondent

Hearing:	10 February 2015
Court:	Harrison, Stevens and French JJ
Counsel:	J R Gough for the Attorney-General S A Barker for Landcorp Farming Ltd A N Isac for Mita Ririnui
Judgment:	14 May 2015 at 2.45 pm

JUDGMENT OF THE COURT

AThe application for interim orders pending the determination of an application for leave to appeal to the Supreme Court or pending a determination of the Supreme Court of an application for interim orders is dismissed. 

BThere is no orders for costs.

____________________________________________________________________

REASONS OF THE COURT

(Given by Harrison J)

Introduction

1. On 12 May 2015 this Court dismissed a cross-appeal by the respondent, Mita Ririnui,[1] against a judgment given in the High Court at Wellington.[2]  The High Court had dismissed Mr Ririnui’s application for judicial review of a decision made by the appellant, Landcorp, on the ground that it was vitiated by bad faith.  This Court also allowed appeals by the Crown and Landcorp against interim orders earlier made by the High Court in the same proceeding.[3] 

   [1]Attorney-General v Ririnui [2015] NZCA 160.

   [2]Ririnui v Landcorp Farming Ltd [2014] NZHC 3402.

   [3]Ririnui v Landcorp Farming Ltd [2014] NZHC 1128.

2. On 13 May 2015 Mr Ririnui filed an application for leave to appeal to the Supreme Court against this Court’s decision. 

3. Mr Ririnui challenges an agreement entered into by Landcorp on 5 March 2014 to sell to Micro Farms Ltd a dairy farm at Whārere, Bay of Plenty for $19 million.  The sale was originally due for settlement on 30 May 2014.  However, that date was extended twice by the High Court.  As a result of this Court’s decision the order for stay has now been set aside.

4. Mr Ririnui has applied to this Court for an interim order restraining settlement of the sale (a) pending the Supreme Court’s determination of his application for leave to appeal or (b) until determination by the Supreme Court of an application for interim orders.  Landcorp opposes the application.  The Crown abides the order of the Court. 

5. Both Mr Isac for Mr Ririnui and Mr Barker for Landcorp have filed memoranda and made oral submissions.  We have been required to determine the application urgently given Mr Barker’s advice that Landcorp intends to settle the sale as soon as possible after 4 pm today unless restrained by a formal order. 

Principles

1. It is well settled that the object of an interim order pending an appeal is to do justice between the parties whatever may be the result of the appeal.[4]  As Mr Isac submits, this exercise requires a careful weighing or balancing of the factors between the right of a successful litigant to the fruits of a judgment and the need to preserve a position against the contingency of a successful appeal.  Among the relevant factors are whether the appeal may be rendered nugatory by the lack of an interim order; Mr Ririnui’s good faith; whether Landcorp will be adversely affected by the interim orders; the effect on third parties; the novelty and importance of the questions involved; any public interest in the proceeding; and the overall balance of convenience.[5]

Decision

[4]New Zealand Insulators Ltd v ABB Ltd (2006) 18 PRNZ 459 (CA) at [13]; Minnesota Mining & Manufacturing Co v Johnson & Johnson Ltd [1976] FSR 139, [1976] RPC 671 (CA) at 676.

[5]New Zealand Insulators Ltd, above n 4, at [11], affirming Dymocks Franchise Systems (NSW) Pty Ltd v Bilgola Enterprises Ltd (1999) 13 PRNZ 48 (HC) at [9].

1. We have undertaken that balancing exercise in the short time available and as a result we are satisfied that the application must be dismissed.  Our grounds can be stated shortly.

2. First, Mr Isac placed primary weight on the ground that Mr Ririnui’s rights of appeal will be rendered nugatory if his application is not granted.  That is because the substantive result sought by Mr Ririnui is the relief of an order setting aside the agreement.  His objective will be nullified if the sale is settled before his appeal is determined.

3. While we accept of course that Mr Ririnui seeks the remedy of an order setting aside the agreement as a consequence of what he alleges is a lack of integrity in the sale process as a whole, his ultimate objective is to secure the farm for Ngāti Whakahemo.  However, if the agreement is set aside by an order of the Supreme Court, Landcorp would become immediately free to enter into a new agreement with Micro or any other party.  Mr Isac accepted during argument on the substantive appeal before us that Ngāti Whakahemo cannot argue that Landcorp was obliged to sell the farm to it or that it had an enforceable right to purchase.  What Mr Isac referred to as prospectively favourable comments about Ngāti Whakahemo’s position in a substantive judgment from the Supreme Court would not affect Landcorp’s freedom to dispose of the property as it saw fit.

4. If the sale proceeds, Ngāti Whakahemo’s right to acquire the farm by virtue of an order from the Waitangi Tribunal would nevertheless remain.  The title is subject to a standard resumption memorial.[6]  In the event that Ngāti Whakahemo is successful on its resumption application to the Tribunal, it will be entitled to resume the farm.  It is irrelevant whether the Tribunal has previously granted this remedy.  What matters is that if Ngāti Whakahemo has as it asserts a strong case to the land, its rights would be protected by a resumption order instead of the possibility of making a successful offer to purchase Whārere from Landcorp if its agreement with Micro is set aside. 

   [6]See Attorney-General v Ririnui, above n 1, at [26] and [30].

5. Second, we are satisfied that both Landcorp and Micro will be adversely affected by an interim order.  Mr Barker refers to evidence that Landcorp has suffered net losses of at least $500,000 as a result of the sale to date – the difference between its expected income from the sale proceeds when invested elsewhere and the rental currently paid for the property.  Also Micro is incurring losses in its inability to mitigate required development costs for the farm together with lost prospective income; and both Landcorp and Micro will suffer ongoing losses from the process of indefinite extensions of the settlement date.  Finally, there is a real risk that Micro will exercise its right to cancel with the prospect that Landcorp might suffer a loss on the resale price. 

6. Mr Isac accepts that the public law nature of Mr Ririnui’s claim against a state-owned enterprise does not diminish the weight to be given to prospective financial damage to the successful party.  The State-Owned Enterprises Act 1986 requires Landcorp to operate as a successful business.  To this end it must be as profitable and efficient as comparable businesses which the Crown does not own.  Landcorp should be treated like any other commercial enterprise for these purposes.  The corporation should not be expected to bear substantial and indefinite costs simply by virtue of its state ownership.

7. Third, we emphasise one important aspect of the merits.  As against the Crown, Mr Ririnui’s case for setting aside the agreement was based on reviewable errors in, first, giving erroneous advice to Landcorp about whether it was interested in purchasing the farm for Treaty settlement purposes and, second, a Ministerial failure to intervene.  The effect of interim orders made in the High Court upholding these claims was spent by the compliance by the Minister of Treaty of Waitangi Negotiations with the order that he consult and reconsider whether the farm was of interest to the Crown for Treaty settlement purposes.  Mr Ririnui did not challenge the Minister’s decision not to acquire the property, which was made after taking into account all factors. 

8. Instead, his substantive claim was limited to the remedy of setting aside the agreement on the ground of Landcorp’s bad faith immediately before the corporation signed the agreement.  The question of whether Landcorp acted in bad faith was ultimately one of fact.  Both Williams J and this Court found following an analysis of the relevant factual matrix that the elements of the claim were not proven. 

9. We appreciate that Mr Ririnui is acting in good faith in bringing this appeal and that the questions it raises are of importance to Ngāti Whakahemo.  However, we are not satisfied that those factors or the claim that Mr Ririnui’s appeal rights will be rendered nugatory of themselves outweigh what we regard as the powerful factors pointing against granting a stay.  We emphasise that justice must be done between the parties, not just for Mr Ririnui.  When all the factors are weighed in the balance, we are satisfied that the application should be dismissed.

Result

1. Mr Ririnui’s application for interim orders pending the determination of an application for leave to appeal to the Supreme Court or pending a determination of the Supreme Court of an application for interim orders is dismissed.

2. There will be no order as to costs. 

Solicitors:
Crown Law Office, Wellington for the Attorney-General
Buddle Findlay, Wellington for Landcorp
Koning Webster, Papamoa for Mita Ririnui