Bruce v Edwards Ca19/02

[2003] NZCA 25

IN THE COURT OF APPEAL OF NEW ZEALAND

CA19/02

BETWEENR J BRUCE & OTHERS

Appellant

ANDB J & W L A EDWARDS

First Respondent

ANDMAORI LAND COURT OF NEW ZEALAND

Second Respondent

ANDH MANUIRIRANGI & R H TITO

Third Respondent

Hearing:17 February 2003

Coram:Gault P
Keith J
McGrath J

Appearances:  R C Laurenson for the Appellants

R T Wilson for the First Respondents
H S Hancock for the Second Respondent
H McIntosh for the Third Respondents

Judgment:27 February 2003     

JUDGMENT OF THE COURT DELIVERED BY KEITH J

[1]        The third respondents apply for conditional leave to appeal to the Judicial Committee of the Privy Council against the judgment of this Court given on 18 November 2002. They wish to protect their rights as members of a preferred class of alienees (PCA) in relation to farm land in Taranaki which had its status altered from Maori freehold land to General land by the Maori Land Court and is the subject of an agreement for sale and purchase by Mr Edwards, the first respondents, to the Bruce trustees, the appellants.  On the change of status, they lost their rights of first refusal and related interests.  The appellants (the Bruce trustees), and the first respondents (the Edwards) oppose the application for leave.  The second respondents (the Maori Land Court) abide the decision of the court.

[2]        The judgment of this Court provides this account of the background to the case:

[1]       …  The Maori owners, Mr and Mrs Edwards, the first respondents, agreed to sell their farm to non-Maori purchasers, Mr and Mrs Bruce, subject to the making by the Maori Land Court of an order changing the land’s status to General land.  The Maori Land Court was not told by the Edwards’ solicitor of the intention to sell the land.  The Court did not require notice of the application for change of status to be served on the members of the preferred classes of alienees (the PCA), being the hapu to which the Edwards belong.  So long as the land remained Maori freehold land the PCA had by virtue of s147(2) of the Te Ture Whenua Maori Act 1993 (the Act) a right of first refusal if it was to be alienated. 

[2]       The change of status order was registered against the title to the land under the Land Transfer Act 1952.  As a result, the land ceased to be Maori freehold land.  The right of first refusal no longer applied.  Mr and Mrs Bruce paid a substantial deposit to the Edwards, confirmed the sale of their own farm, purchased extra livestock and made ready to move on to the land.  They nominated two family trusts as purchasers.  The appellants are the trustees of those trusts.  On the settlement date, but before settlement could occur, the Bruces discovered that some members of the PCA had caveated the title and were applying to the Maori Land Court for a rehearing of the change of status application seeking annulment of the change.

[3]       Settlement did not occur for that reason.  But the Edwards and the Bruces came to an interim arrangement under which the Bruces took possession of the farm as lessees from the Edwards and provided the Edwards with funds, secured by second mortgage of the farm, with which the Edwards could meet commitments to buy other properties which they had made in reliance on the sale. 

[4]       The Maori Land Court decided that there should be a rehearing, but the appellant trustee purchasers sought in the High Court a judicial review of that decision.  The appellants counterclaimed seeking an order for specific performance of the sale and purchase contract, which the Edwards have not resisted.  The High Court set aside the order for the rehearing made by the Maori Land Court on the ground that the Maori Land Court had failed to consider whether the application should be allowed to be brought out of time and had not heard from the Edwards.  But the High Court then had to determine whether, in the event that a rehearing did take place in the Maori Land Court and the status order were reversed, the Edwards would, when the matter came back to the High Court, inevitably be ordered to transfer the land to the Bruce trustees.  A crucial issue was whether by virtue of a saving provision in the Act (s88) the Bruces’ interest was protected against any annulment. 

[5]       The High Court decided that the Maori Land Court should be allowed to consider the application for the rehearing and, if it thought fit, the substantive application to annul the change of status order.  It made no decision on the specific performance application, adjourning that matter until the views of the Maori Land Court were known.  The High Court ordered that if the Maori Land Court were to annul the change of status order, no party should attempt to register the annulment order until the matter had been referred back to the High Court and it had further considered the specific performance application in light of the decision of the Maori Land Court.

[6]       Although the caveat against the title to the farm has lapsed, the Edwards, through their solicitors, have undertaken to the Maori Land Court that in the meantime there will be no registration of any transfer to the Bruce trustees.

[7]       In essence, the Bruce trustees, supported by the Edwards, now come to this Court appealing the decision of the High Court to adjourn their specific performance application.  They say that they are bona fide purchasers for value who have relied upon the current state of the title to the farm as General land, i.e. upon registration of the change of status order, and are entitled to be registered as its proprietors with that status continuing.  They say that they have changed their position to their detriment.  They point out that they confirmed the sale of their existing farm when they knew the order had been made.  There has been a very large increase in the value of dairy farms since the contract with the Edwards was entered into.  If the transaction cannot proceed, they say they will suffer considerable hardship.

[8]       On the other hand, the third respondents, Mr Manuirirangi and Mr Tito, who are members of the PCA, say forcefully that the land remains ancestral land in their minds, whatever the land transfer title may show and that, if the transaction proceeds, a great injustice will have been done to the PCA, who will have been deprived of their right of first refusal upon an alienation, and their right to have the land remain Maori land, because of the concealment from the Maori Land Court by the Edwards’ solicitor of the proposed sale to the Bruces.

[9]       Regrettably, whichever way this matter is resolved there is likely to be a substantial measure of injustice for the losing party.

[3]        This Court allowed the appeal by the Bruce trustees, supported by the Edwards.  It remitted the matter to the High Court for entry of judgment in favour of the appellants.  The Edwards were released from their undertaking not to register any transfer to the Bruce trustees but the transfer was not to be presented for registration for 21 days from the date of the judgment or, in the event of an application for leave to appeal being made during that period, until further order of this Court.

[4]        At the hearing, the applicants invoked both paras (a) and (b) of rule 2 of the New Zealand (Appeals to the Privy Council) Order 1910.  The application itself referred only to para (a) – the “as of right” paragraph – and the other parties objected to the addition of the further ground, especially at the last minute.  It is clear that we have power to consider the additional ground if the original application was made in time (Commissioner of Inland Revenue vVela Fishing Ltd [2000] 2 NZLR 635 para [7]) and in the circumstances, including the fact that the other parties were not prejudiced, we do consider that other ground.

[5]        Under rule 2(a) the appeal is of right if the appeal involves directly or indirectly a claim or question to or respecting property or a civil right amounting to or of the value of more than $5,000.  There is no dispute that the farm in question is worth more than $5,000, being apparently worth around $3 million.  The applicants do not claim ownership of the land itself, but rather rely on their statutory rights in relation to the land as members of the PCA.  They say that those claims amount to “some claim or question to or respecting” the land, and indeed directly so : the ultimate question is whether the land should stay with the Bruce trustees or the whole status and transfer process be redone with a potentially different outcome.  The word “indirectly”, they say, puts the matter beyond doubt.  The argument continues that the statutory rights in respect of alienation are of themselves of no obvious cash value, but it would be a nonsense to say that they have no significant value.

[6]        The applicants also say that they have a “civil right”, being the statutory rights of first refusal and to be notified of and heard on any proposal to alienate, including a change of status for the purpose of alienation.  The value of that civil right must be assessed by reference to the value of the property in respect of which the right attaches in the present case.

[7]        As counsel for the Edwards emphasised, we must begin with the judgment subject to the application.  This Court was essentially concerned with the Bruce trustees’ appeal against the High Court adjournment of their application for specific performance.  That appeal succeeded on the basis that they had an untainted equitable interest in the land and that as a consequence of the making and registration of the status order the PCA themselves no longer had any competing equitable interest (and that on assumptions favourable to the PCA); and s88 operated to protect the Bruce trustees’ equitable interest against the consequences of any reversal or annulment of the change of status order at a rehearing.

[8]        As Mr McIntosh for the applicants frankly recognised, the right which his clients were attempting to protect in the appeal in this Court was the right to be heard on an application for a rehearing and not even the right to be heard on the substantive application to annul the change of status order.  Those matters are essentially discretionary.  Those rights, in terms of the decision of this Court in Vela Fishing paras [24], [28], [29], being rights of procedure as opposed to substantive rights cannot be given a cash value, as indeed the applicants’ submissions in part recognise.  For that reason alone, the application cannot be brought within the scope of para (a) of rule 2.

[9]        But should leave to appeal be granted under the discretionary head of para (b) of rule 2?

[10]     The applicants say that it should because of the degree of indigenous public interest considerations affecting the common law of New Zealand.   This case involves, the submissions contend, a number of important issues of that nature including

(a)The extent to which Parliament intended to enable Maori to protect their land.

(b)The jurisdiction of the Māori Land Court as a forum for that protection.  The capacity of Māori to seek redress via the Court has both symbolic and practical importance to Māoridom.  TTWMA represents the single strongest articulation of the principle of protection of Māori land.  The preamble contains an affirmation of the rangatiratanga of Māori in respect of their land and acknowledges that land is taonga tuku iho.  Intertwined with the language and imagery is the establishment of a Court whose primary purpose is the protection of Māori freehold land.

(c)The statutory right against alienation, which as noted in this Court’s judgment at … is a continuing right which runs with the land.  The “sorrow” noted … [in the judgment] is not simply for the ownership of the land, but also for the loss of ancestral and future connecting with the land.

(d)The priority and/or precedence of indefeasibility and other fundamental legal rights as against (c).

[11]     The response is that those issues simply do not arise on this appeal

… In particular there is no issue as to jurisdiction of the MLC in this case.  The reason the matter was not sent back to the MLC was that because of s88(1) no annulment order made by the MLC could ever have been registered.  Similarly the case is not about indefeasibility but about the much narrower question of whether s88(1) applies to order made under s43(5).

For these reasons it is submitted that the case does not have such public or general importance that it ought to be carried further.

[12]     We agree with that assessment.  We agree in particular, in the absence of any evidence on the matter, that the point of law (about s88) is of no great general or public importance.  It is a narrow legal point.  Had it been necessary, we would also have given weight to the ongoing serious impact of the litigation on the Bruces and the Edwards, given as well Mr McIntosh’s frank and proper acknowledgement on behalf of the applicants that they do not know whether they will be able to proceed.

[13]     The application for conditional leave to appeal is accordingly refused.

[14]     Counsel for the Bruce trustees and the Edwards in their submissions sought an order that the transfer of the land from the latter to the former may be presented for registration (see para [3] above).  Counsel for the Edwards renewed that application at the hearing.

[15]     The PCA had not however been given notice of that application, the submissions being filed on the Friday before the Monday hearing and on the day of hearing.  As indicated at the hearing, that matter may be the subject of applications on notice.  Those applications may also address any questions of costs on the leave application.

Solicitors:

Thomson O’Neil & Co, Stratford for the Appellant
Till Henderson King, New Plymouth for the First Respondents
Crown Law Office, Wellington for the Second Respondent
Russell McVeagh, Wellington for the Third Respondent