Gregory v Thames Coromandel District Council
[2017] NZHC 2323
•25 September 2017
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA
KIRIKIRIROA ROHE
CIV-2016-419-240 [2017] NZHC 2323
BETWEEN COLT GREGORY
First Plaintiff
PETER-JAMES MARTIN Second Plaintiff
AND
THAMES COROMANDEL DISTRICT COUNCIL
First Defendant
GLEN LEACH Second Defendant
JOHN HOOK Third Defendant
MINISTER FOR LAND INFORMATION Fourth Defendant
SCHMITT GROUP Fifth Defendants
Hearing: 7 August 2017 Counsel:
First Plaintiff in person
Second Plaintiff in person
J Vella and C Timbs for First and Second Defendants
M Pirini and R Polaschek for Third and Fourth Defendants
D Quinn for Fifth DefendantsJudgment:
25 September 2017
JUDGMENT OF WHATA J
This judgment was delivered by me on 25 September 2017 at 4.30 pm, pursuant to Rule 11.5 of the High Court Rules. Registrar/Deputy Registrar
Date: ………………………….
COLT GREGORY v THAMES COROMANDEL DISTRICT COUNCIL [2017] NZHC 2323 [25 September
2017]
[1] The plaintiffs claim to be the lawful proprietors of land on or around Redbridge Road, Tairua, on the basis of whakapapa, tikanga Māori and customary right. They seek a summary proceeding for recovery of land in accordance with Part
13 of the High Court Rules 2016. The defendants seek summary judgment and/or strike out. It is common ground that the claimed area involves the following parcels of land:
(a) Section 20 Block XII Whitianga Survey District (Section 20); (b) Section 1 Survey Office Plan 53116 (Section 1); and
(c) Lots 1 and 2 LT419829 (Lots 1 and 2).
[2] The land identified as Lots 1 and 2 is reclaimed land. It was reclaimed from the Tairua Harbour between 1970 and 1999. Sections 1 and 20 border Lots 1 and 2 to the South.
[3] The Thames Coromandel District Council (TCDC), the first defendant, asserts it is the registered proprietor of Section 20 and a lawful occupier of Lot 2. The second defendant, Glenn Leach, the former Mayor of the TCDC, has no interest in the proceedings, having never owned or occupied the land subject to the proceedings.
[4] The third and fourth defendants, John Hook and the Minister of Land Information (the Minister), assert title to the reclaimed lands (Lots 1 and 2) vest in the Crown by operation of statute. Mr Hook is the Group Manager of Crown property at Land Information New Zealand (LINZ).
[5] The fifth defendants, the trustees of a family trust, assert they are registered proprietors of 17 Redbridge Road, Tairua, being Section 1.
Scope of this judgment
[6] During the course of the hearing it became evident that the issues concerning reclaimed land had much wider public significance. In particular, an issue arose as to the effect of s 31(3)(a) of the Marine and Coastal Area (Takutai Moana) Act 2011 (MACA), which states:
31 New status of existing reclaimed land
…
(3) However, this section does not affect—
(a) any lesser interest held, immediately before the commencement of this Act, by a person other than the Crown in existing reclaimed land; or
[7] I was not satisfied with the limited analysis offered by the parties on the
effect of this section, and in particular on whether “lesser interest” in terms of s
31(3)(a) includes customary interests. I therefore invited the parties, together with an amicus curiae, to provide further submissions on the effect of this section. The parties have since sought a further hearing on this aspect.
[8] As a result I have reserved my position on the claim as it relates to the reclaimed lands. This judgment is concerned only with land subject to Land Transfer Act 1952 (LTA) title, being Sections 1 and 20.
Statement of claim
[9] The plaintiffs, Colt Gregory and Peter-James Martin allege are “the authorised executor and registrar respectively of Te Wakaminenga Ki Hauraki, of which Nga Uri of Tametepo are members”. They further assert they are lawful kaitiaki (proprietors) of land on and around Redbridge Road. They say it is a customary area for mahi kai (food gathering) and recreation for Tamatepo, Ngāti Pu, Ngāti Whanaunga, Ngāti Karaua, Ngāti Huarere and others. Relevantly, for present purposes, they make the following allegations:
(a) Te Wakaminenga Ki Hauraki is the lawful proprietor of the land on and around Redbridge Road, in accordance with whakapapa, tikanga Māori (which they submit is supreme law) and customary right.
(b)The defendants are unlawfully occupying the land, utilising its resources and fraudulently collecting rent.
(c) Despite requests from the plaintiffs, the defendants have not vacated or ceased to utilise the land and its resources.
(d)The defendants have no defence to an action for recovery of land pursuant to Part 13 of the High Court Rules.
(e) A month prior to filing this claim, a Council whistleblower informed the plaintiffs that the TCDC intended to conspire with LINZ to give effect to their “fraudulent” title. This was confirmed when the third defendant, John Hook, served a trespass notice on the plaintiffs which stated the Crown held title.
(f) Upon request to provide information regarding ownership, LINZ
informed the plaintiffs that it does not own the land.
(g)The plaintiffs suggest any land that is not titled is subject to native title. As such, they claim ownership.
[10] On the foregoing basis, the plaintiffs seek summary proceeding for recovery of the land on or around Redbridge Road, being the land described above, an order for trespass, and damages and costs on an indemnity basis.
The defences
[11] All defendants have filed for leave to seek summary judgment and/or strike out against the plaintiffs.
[12] In relation to Section 20, Ms Vella submits TCDC is registered proprietor with indefeasible title.1 She underlines there are only limited exceptions to indefeasibility, namely, where the title is obtained by fraud.2
[13] On this point, she contends TCDC acquired the land from the Crown and therefore no cause of action can arise in respect of its acquisition.
[14] To the extent the plaintiffs claim the Crown fraudulently acquired the land from its historical Māori land owners, she points out any fraud is “cured” by the purchase of the land by a subsequent owner and,3 in any event, claims of fraudulent acquisition are entirely unsupported by any evidence filed by the plaintiffs or any investigations undertaken by TCDC into the historical dealings with the land.
[15] She submits customary title, in respect of TCDC’s land, was extinguished when the Crown granted title to Māori owners and subsequently purchased the Tairua Block from them in 1872. The plaintiffs, she says, have proffered no evidence to support the assertion they are rightful customary owners of the land.
[16] The fifth defendant’s defence is limited to Section 1. It is the same as the defence raised by TCDC in respect of Section 20, namely, that they acquired their property, joined fee simple title and there is no evidence to suggest it was fraudulently obtained by them in a way that would defeat indefensibility of title.
Threshold tests
[17] I address first the threshold test for summary judgment and strike out. If necessary, having assessed the defendants’ claims, I will turn to consider the plaintiffs’ claim under Part 13 of the High Court Rules.
Summary judgment
[18] Rule 12.2 of the High Court Rules provides for summary judgment in the following terms:
1 Ms Vella also submits on behalf of Mr Glenn Leach, the second defendant.
2 In support, she cites Land Transfer Act 1952, s 62.
3 Section 183.
12.2Judgment when there is no defence or when no cause of action can succeed
(1) The court may give judgment against a defendant if the plaintiff satisfies the court that the defendant has no defence to a cause of action in the statement of claim or to a particular part of any such cause of action.
(2) The court may give judgment against a plaintiff if the defendant satisfies the court that none of the causes of action in the plaintiff’s statement of claim can succeed.
[19] It is common ground that summary judgment will only be granted in clear cases. The Court of Appeal in Westpac Banking Corporation v M M Kembla New Zealand Ltd stated:4
At the end of the day, the Court must be satisfied that none of the claims can succeed. It is not enough that they are shown to have weaknesses. The assessment made by the Court on the interlocutory application is not one to be arrived at on a fine balance of available evidence as is appropriate at trial.
[20] In short, the defendants must show on the balance of probabilities none of the
plaintiffs’ claims can succeed.5
[21] In forming a view about the credibility of a case, the Court will not usually attempt to resolve factual disputes but need not uncritically accept evidence that is inherently lacking in credibility.6
Principles governing strike out
[22] This Court may strike out pleadings if it discloses no reasonably arguable action, defence or case appropriate to the nature of the pleading.7 The following are principles that apply to the strike out procedure:8
(a) pleaded facts are assumed to be true unless they are entirely speculative and without foundation;
4 Westpac Banking Corporation v M M Kembla New Zealand Ltd [2001] 2 NZLR 298 (CA) at
[64].
5 Jones v Attorney-General [2003] UKPC 48, [2004] 1 NZLR 433 at [5] and [10].
6 Krukziener v Hanover Finance Ltd [2008] NZCA 187, [2010] NZAR 307 at [26].
7 High Court Rules 2016, r 15.1(1)(a).
8 Couch v Attorney-General [2008] NZSC 45, [2008] 3 NZLR 725 at [33], citing Attorney- General v Prince and Gardner [1998] 1 NZLR 262 (CA).
(b)the cause of action must be clearly untenable – the Court must be certain it cannot succeed;
(c) the jurisdiction is to be exercised sparingly and only in clear cases;
and
(d) the threshold is set deliberately high.
[23] As Tipping J said in Couch, it is a commonplace of the strike-out jurisdiction that the Court will consider not only the basis upon which the claim is presently pleaded but also any other basis upon which the claim might be pleaded.9
Assessment
[24] The basis of the plaintiffs’ claim, and therefore the starting point, is the plaintiffs must show the TCDC and the fifth defendants are unlawful occupiers for the purpose of r 13.1 of the High Court Rules. An unlawful occupier means a person who:10
(a) occupies or continues to occupy land of the plaintiff without the licence or consent of the plaintiff or the plaintiff’s predecessor in title; and
(b) is not a tenant or subtenant holding over after the termination of a tenancy or subtenancy.
Section 20
[25] As Ms Vella, TCDC is the registered proprietor of Section 20, so its claim to the land cannot be defeated except in limited circumstances.11 This is a function of indefeasibility. In simple terms, indefeasibility of title means the act of registering title protects the registered owner against almost all contrary claims to the property.12
Section 62 of the LTA confirms the doctrine of indefeasibility, stating:
62 Estate of registered proprietor paramount
9 Couch v Attorney-General, above n 8, at [123].
10 High Court Rules 2016, r 13.1.
11 For present purposes, only the fraud exception is in focus.
12 Frazer v Walker [1967] NZLR 1069 (PC) at 1075-1076, per Lord Wilberforce.
Notwithstanding the existence in any other person of any estate or interest, whether derived by grant from the Crown or otherwise, which but for this Act might be held to be paramount or to have priority but subject to the provisions of Part 1 of the Land Transfer Amendment Act 1963, the registered proprietor of land or of any estate or interest in land under the provisions of this Act shall, except in case of fraud, hold the same subject to such encumbrances, liens, estates, or interest as may be notified on the folium of the register constituted by the grant or certificate of title of the land, but absolutely free from all other encumbrances, liens, estates, or interest whatsoever,–
(a) except the estate or interest of a proprietor claiming the same land under a prior certificate of title or under a prior grant registered under the provisions of this Act; and
(b) except so far as regards the omission or misdescription of any right of way or other easement created in or existing upon any land; and
(c) except so far as regards any portion of land that may be erroneously included in the grant, certificate of title, lease, or other instrument evidencing the title of the registered proprietor by wrong description of parcels or of boundaries.
[26] Section 75 of the LTA provides a certificate of title is evidence of proprietorship. Section 63(1) then protects the registered proprietor against any action for possession, or other action for recovery of land. In particular, s 63(1) states:
No action for possession, or other action for the recovery of any land shall lie or be sustained against the registered proprietor under the provisions of this Act for the estate or interest in respect of which or so registered, except in any of the following cases, that is to say:
…
(c) The case of a person deprived of any land by fraud, as against the person registered as proprietor of that land through fraud, or against a person deriving otherwise than as a transferee bona fide for value from or through a person so registered through fraud:
…
[27] Accordingly, as stated by TCDC, the only way an indefeasible title can be defeated in the circumstances as pleaded is as follows:
(a) the registered proprietor has deprived the person seeking possession of the land by fraud; or
(b)the registered proprietor has acquired the land from another person who obtained it fraudulently, other than via a bona fide (good faith) transfer for value.
[28] Assuming for present purposes the plaintiffs have an historical right to the affected land, the pleadings on fraud refer to recent acts by the “Defendant”. In particular:
2.The defendants have been intentionally deceptive by misleading the general public to believe that they are the legal proprietors of the land in question.
3.Based on the aforementioned description, the defendants have gained wealth in the form of:
(a) Monies from ‘tenants’, ratepayers and public in general from
Māori land.
(b) Use of and building of structures on the seabed …
…
9.The defendant is unlawfully occupying the land and utilising its resources.
10.The defendant is fraudulently collecting rent monies on land for which they are not lawful proprietors.
…
14.A month prior to our filing at the court a council whistle blower had informed us that TCDC intended to quickly conspire with LAND INFORMATION NEW ZEALAND as record keepers and holders of other titles, to give effect to the fraudulent title that was created by the defendant and to secure their fraudulent deception.
[29] None of these matters identify an act of fraud by the Crown or lack of good faith in terms of acquisition of Section 20 by TCDC. Therefore as pleaded, there is no prospect of success in respect of a claim pursuant to Part 13 of the High Court Rules.
[30] The plaintiffs also refer to The Hauraki Report in argument.13 The general thrust of their submission is Crown policy of wholesale purchase of Hauraki lands by
way of pre-emptive right, together with a lack of full informed consent, was
13 Waitangi Tribunal The Hauraki Report (Wai 686, 2006).
fraudulent and unconscionable. There are major problems with this, assuming for present purposes the pleading might be properly recast to allege these matters. First, the justiciability of these claims in this Court is doubtful. Second, Section 20 was part of a larger block subject to Native Land Court processes, and then over the course of next 100 or so years statutory proclamation, multiple statutory vestings in
the Crown, and then on sale to the County of Thames in 1975.14 It was then
subsequently transferred to TCDC by operation of the Local Government Act 1974.
[31] I accept there is authority for the proposition that fraud may include equitable fraud, including a breach of fiduciary duty, for which there will be no limitation period.15 Proprietors of Wakatu v Attorney-General establishes that in particular circumstances a historical claim of breach of fiduciary duty by the Crown may be pleaded.16 But there is nothing before me which suggests the relevant conditions are present here. Even if the plaintiffs were able to successfully mount a claim in equitable fraud, in the context of multiple statutory vestings and sale to the TCDC, such a claim under Part 13 of the High Court Rules has no prospect of success.
[32] To elaborate, s 103 of the LTA states:
Nothing in this Act … shall be interpreted as to render subject to action for recovery of damages, or for possession, or to deprivation of the estate or interest in respect of which he has registered as proprietor, any purchaser … bone fide for valuable consideration of land under the provisions of this Act
… on the ground that as vendor … may have been registered as proprietor through fraud or error, or under any void or voidable instrument, or may
have derived from or through a person registered as a proprietor through
fraud or error, or under any void or voidable instrument, and whether the fraud or error consists in non-description of boundaries or of parcels of any land, or otherwise howsoever.
14 The affidavit of John Leslie Neal, a provider of land information services, outlines the complicated history of Section 20. It was part of the Tairua Block, recorded in 1872 and granted to Māori owners the same year. On 7 December 1872, the Crown purchased 36,000 acres of the Tairua Block. It was also proclaimed wasteland under the Immigration and Public Works Act
1870 and the Immigration and Public Works Act 1874 on 25 June 1874, with a new title issued on 15 July 1874. Subsequently, it was set apart as provisional state forest under s 34 of the War Legislation and Statute Amendment Act 1918, and variously vested as a state forest or reserve until it was declared Crown land under the Reserves and Other Lands Disposal Act 1966 and s
11 of the Reserves and Other Lands Disposal Act 1969. It was then purchased in 1975 by the Chairman, Councillors and Inhabitants of the County of Thames. A new title was issued in their name on 25 February 1976. By operation of amalgamations under the Local Government Act
1974, it vested in the TCDC.
15 Staite v Kusabs [2017] NZHC 416 at [187]-[189].
16 Proprietors of Wakatu v Attorney-General [2017] NZSC 17, [2017] 1 NZLR 423.
Section 183 states that nothing in the Act shall be interpreted to deprive a purchaser or mortgagee bona fide for valuable consideration of their indefeasible title on the ground that their vendor or mortgagor may have derived their title through fraud or error, or under any void or voidable instrument, or through someone whose title was acquired through fraud or error. In other words, once you are registered you give good title to a bona fide purchaser for value, irrespective of any vice there may have been in your own title. The purpose of s 183 is to make it clear that those who take in good faith and for valuable consideration are not affected by any vice in a predecessor’s title. …
[34] And:18
Subject to fraud and the other specific statutory exceptions, an indefeasible title is conferred by the act of registration.
[35] If the Crown had acted fraudulently in acquiring the land from its customary owners, the fraud is cured by operation of s 183 provided TCDC obtained the land in good faith. There is nothing before me to suggest TCDC had any knowledge of the alleged “fraud” of the Crown in the 1800s.
[36] Equally, therefore, the allegation that LINZ fraudulently created title in favour of TCDC is misconceived.
[37] There is further fatal problem with the pleadings. They do not come anywhere near properly particularising any alleged fraud either by the Crown or TCDC/LINZ by fraudulently creating title, or the basis for the claim TCDC knew of any fraud when it acquired the land. As Ms Vella notes, the Supreme Court has held that where a defendant in a proceeding involving fraud applies to strike it out, the plaintiff is required to discharge the onus of showing it has a case with an evidential
foundation amounting to a prima facie case of fraud.19 In Te Roroa Whatu Ora
Custodian Ltd, specifically in relation to the fraud exception, the Court put it this way:20
17 Regal Castings Ltd v Lightbody [2008] NZSC 87, [2009] 2 NZLR 433 at [132].
18 At [135].
19 Commissioner of Inland Revenue v Redcliffe Forestry Venture Ltd [2012] NZSC 94, [2013] 1
NZLR 804 at [33].
20 Te Roroa Whatu Ora Custodian Ltd v Keepa [2012] NZHC 1052 at [33].
… It is not enough simply to make an allegation of fraud. When you make an allegation of fraud you are accusing someone of dishonesty; you are making an allegation of very serious misconduct. If such an allegation is to be made, there has to be some evidence to support it.
[38] Pleadings must also be fully and precisely pleaded and particularised, with sufficient apparent cogency to go to trial.21
[39] Overall, I accept the argument for TCDC that the plaintiffs have failed to present any credible evidence which would establish a prima facie case of either the Crown or TCDC acting fraudulently, or that TCDC knew or suspected the Crown acted fraudulently in acquiring the land. General pleadings of historic fraud, and that LINZ created a fraudulent title, are not of sufficient particularity or cogency to go to trial. Moreover, the absence of a “paper trail” of the kind sought by the plaintiffs is
not evidence of fraud.22
Customary title – Section 20
[40] It is unnecessary for me to resolve whether customary title has been extinguished with finality but, on the information available to me, including evidence that on 29 November 1872 the Crown granted title to Māori landowners, it is highly likely it was. The Crown grant was made pursuant to the Native Lands Act
1865 and the Native Lands Act 1867, the scheme of which was to convert customary title to freehold title derived from the Crown. As noted by Ms Vella, s 10 of the Native Lands Act 1867 provided that a notification in the New Zealand Gazette was conclusive proof native title over the land described in the Gazette Notice had been extinguished. I also accept the basic proposition that customary title to land brought under the land transfer system cannot survive the indefeasibility provisions of the LTA (where the title covers the ground). Where necessary, the Court is entitled to
take judicial notice that customary status has been extinguished by registration.23
21 Commissioner of Inland Revenue v Redcliffe Forestry Venture Ltd, above n 19, at [33].
22 In any event, the documentary evidence attached to Mr Neal’s affidavit provides a detailed
“paper trail”.
23 Hoole v Pickens [2014] NZHC 620 at [53]. As Andrew Erueti has commented, the registration of a certificate of title under the land transfer system, or historically the Crown grant of land, is an act which completes the conversion of customary title to freehold: see Andrew Erueti “The Evolution of Māori Land Law 1862-1993” in Richard Boast et al Māori Land Law (2nd ed, LexisNexis, Wellington, 2004) at [4.2.1(b)].
(a) the operation of the indefeasibility provisions of the LTA;
(b)the lack of cogent pleadings or any evidence of fraud by the Crown in relation to this specific parcel of land; and
(c) the complete absence of evidence that TCDC was on notice of the alleged fraud;
I am satisfied the plaintiffs’ claim in relation to Section 20 has no prospect of
success, and on the facts as pleaded there is no arguable case.
Section 1
[42] The plaintiffs’ claim to Section 1 is defended by the fifth defendants. They adopt the submissions of TCDC in respect of Section 20. Mr Quinn on their behalf adds they purchased the property on 2 February 2016. They have given uncontested evidence that they did not act fraudulently in purchasing the property, and have no knowledge of any fraud on the part of Mr Smith, the previous owner.
[43] As I noted in my Minute (No 2) of 7 August 2017, summary judgment dismissing the plaintiffs’ claims against the fifth defendants has been recorded by consent. Were it necessary, I would have reached the same conclusion as in respect of Section 20.
Outcome
[44] I am satisfied the plaintiffs’ claim in relation Sections 1 and 20 pursuant to Part 13 of the High Court Rules, has no prospect of success and no reasonably arguable case has been pleaded. Accordingly:
(a) I grant summary judgment in favour of the first, second and fifth defendants.
(b) Were it necessary to do so, I would strike out the plaintiffs’ statement
of claim as it relates to Sections 1 and 20.
Costs
[45] I reserve costs pending the outcome of the second judgment, dealing with the reclaimed land.
Solicitors: Crown Law, Wellington
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