Hull v Attorney-General of New Zealand HC Auckland M1900-Sd/00

[2001] NZHC 1012

IN THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY M1900-SD/00

BETWEEN PETER ABE HULL
First Plaintiff

AND JOHN WILLIAM HULL and PETER ABE HULL
Second Plaintiffs

AND THE ATTORNEY-GENERAL OF NEW ZEALAND
Defendant

Hearing: 1 August 2001

Counsel: David Williams QC and Bridget Holland for plaintiffs
Colin Carruthers QC for defendant

Judgment: 25 October 2001

JUDGMENT OF POTTER J

Solicitors:
Rudd Watts & Stone, P O Box 3798, Auckland
Crown Law Office, DX SP 20208, Wellington

Introduction

[1] Two parcels of land in Albany comprising together approximately 47.4 hectares are at the core of a long running dispute between the plaintiffs (the Hulls) and the defendant (the Crown). The land was originally acquired by the Crown from the Hulls under the Public Works Act 1981.

[2] By letter of 31 July 2000 the Crown advised the plaintiffs of its decision to dispose of the land. The plaintiffs claim that there is a contract concluded in 1989 to sell the land to them at its 1989 market value.

[3] However, the plaintiffs have also contended, successfully in proceedings in the High Court (M1181/89) and unsuccessfully in the Court of Appeal (CA41/99), that the date at which the price should be fixed pursuant to the Public Works Act, is in 1983. The plaintiffs have appealed to the Privy Council from the Court of Appeal decision.

The Proceedings

[4] In November 2000 the plaintiffs issued these proceedings, claiming without prejudice to their rights pursued in the Privy Council, declarations that-

[a] Binding agreements for sale and purchase of the two parcels of land came into existence on 17 July 1989.

[b] The plaintiffs are entitled to have the agreements for sale and purchase implemented and completed.

[c] The plaintiffs are entitled to have the land sold to them at market value as at 17 July 1989.

The plaintiffs also seek an order in the nature of an injunction restraining sale of the land by the Crown for a reasonable period following determination by the Privy Council of the plaintiffs’ appeal from the decision of the Court of Appeal (CA41/99), to allow the price to be negotiated or determined by the Land Valuation Tribunal.

No statement of defence has yet been filed.

Strike Out Application

[5] The Crown seeks to strike out the plaintiffs’ statement of claim. The grounds stated in the application are that the statement of claim -

[a] Discloses no reasonable cause of action;

[b] Is likely to cause prejudice, embarrassment or delay;

[c] Is an abuse of process.

Principles On Strike Out Action

[6] The parties are agreed that the applicable principles are those stated in Attorney-General v Prince and Gardner [1998] 1 NZLR 262, 267 -

[a] The Court will usually adopt the stance that the facts pleaded are true. (In this case, for the purposes of its application, the Crown proceeds on the assumption that the plaintiffs can establish the 1989 contract which they allege).

[b] The causes of action must be so clearly untenable that they cannot possibly succeed. (This principle does not apply because of the assumption made by the Crown for the purposes of this application).

[c] The jurisdiction is to be exercised sparingly and only in a clear case if the Court is satisfied it has the requisite material.

[d] Strike out applications may not be declined solely because difficult questions of law are involved. (Not relevant here).

Peter Abe Hull first plaintiff - Abuse of Process

[7] Under this heading the Crown challenges the standing of the first plaintiff Peter Abe Hull. Mr Hull became bankrupt. The second plaintiffs acquired by assignment from the Official Assignee, his interest in the land. I invited the plaintiffs to consider whether Mr Peter Abe Hull in his personal capacity could appropriately be dismissed as a plaintiff. Counsel for the plaintiffs took instructions and filed a memorandum advising consent to this course of action. Accordingly, by consent there will be an order dismissing from the proceedings the first plaintiff Peter Abe Hull.

Limitation defence

[8] The defendant’s application under this head relates not to the substance of the causes of action as pleaded, but relies on a limitation defence. It is better considered under the stated ground of abuse of process. The applicant claims that if a contract came into existence in July 1989 (which the Crown denies), any breach occurred more than 6 years before the issue of these proceedings so the cause of action is statute barred by s 4(1)(a) Limitation Act 1950. As described above, for the purposes of this application the Crown assumes the existence of the 1989 contract as alleged. The Crown submits that no settlement date having been specified in the alleged contract, settlement within a reasonable time (3, 6, or 12 months) would be envisaged, and the alleged breach by the Crown giving rise to the cause of action would necessarily arise more than 6 years before these proceedings were issued in November 2000.

[9] To be successful the moving party must demonstrate that the plaintiffs have “no escape” from the limitation point: Riches v Director of Public Prosecutions [1973] 2 All ER 935, 938. For the following reasons I consider this is not a clear case of “no escape”.

[10] An essential term of the alleged contract, the purchase price, has yet to be determined, although the mechanism for determination is stipulated. It is certainly arguable that the reasonable period within which the contract must be performed, has not yet started to run and will start only when the price is fixed. Until that happens, there is absent definition of a critical term of the contract to be performed, such that a date by which the contract reasonably should be performed cannot be ascertained.

[11] The plaintiffs here plead anticipatory breach arising in July 2000 when the Crown advised -

“. . . the Crown now wishes to dispose of the land.”

Disposition by the Crown would deny to the plaintiffs the contractual rights they claim pursuant to the alleged 1989 contract. The breach as claimed is unaffected by the limitation defence.

[12] The Crown points out, however, that in a letter of 2 August 1989 in which the Crown granted the plaintiffs an extension of time to accept their offer under the Public Works Act, that if one of three optional courses of action was not achieved then -

“. . . the subject land will be available for sale to another party.”

[13] By letter in reply of 30 August 1989, the plaintiffs’ solicitors on their behalf confirmed that the first of the three options would be pursued (urgently to proceed with the judicial review proceedings which by then had been filed). The letter of 30 August 1989, expressly referred to the plaintiffs’ understanding that the land would not be offered for sale to any other party. So the recent advice from the Crown of intended disposition, is a new development which gives rise to the anticipatory breach pleaded. On this aspect, I accept the plaintiffs’ submissions.

[14] Further, the plaintiffs submit that even if they faced difficulties on the limitation point from a contractual perspective, it would be open to them to amend the pleadings to seek the declaratory relief under the Judicature Amendment Act 1972 when no limitation period would apply. They refer to Sisters of Mercy (Roman Catholic Diocese of Auckland Trust Board) v The Attorney-General (Auckland High Court, CP219/99, 6 June 2001, Randerson J) where the Court noted the appropriateness of declaratory relief under the Judicature Amendment Act in cases under s 40 of the Public Works Act and that the Limitation Act 1950 does not provide any time limit for bringing proceedings under that Act. In the Court of Appeal judgment (CA41/99) at para [52] the Court confirmed the applicability of the Judicature Amendment Act to decisions under s 40 Public Works Act and approved the statement of the Court in Royal Australasian College of Surgeons v Phipps [1999] 3 NZLR 1 that the focus of parties and the Court in such proceedings should be on issues of substance.

[15] I consider there is merit in the submissions of the plaintiffs. The rights under s 40 Public Works Act are rights which should not be defeated by technical or procedural limitations in the absence of impropriety or abuse by those in whom they rest.

Res Judicata

[16] The defendant claims that the issue of validity of the 1989 contract could have and should have been determined in the judicial review proceedings (M1181/89) in which the factual matters were essentially the same as in these proceedings. The Crown argues that to pursue the question of the validity of the 1989 contract in this separate set of proceedings is an attempt to bring back before the Court in another guise, an issue which has already been pleaded and could have been fully argued and determined. Accordingly, submits the Crown, the present proceeding is an abuse of process and should be struck out (Neylon v Dickens [1987] 1 NZLR 402, 409-410; Otis Elevator Co Ltd v Linnell Builders Ltd (1991) 5 PRNZ 72; Oranga Holdings Ltd v Duke (1995) 8 PRNZ 500).

[17] I believe the short answer to this contention, is that the 1989 contract was pleaded by the plaintiffs and denied by the Crown in the judicial review proceedings, but the issue was deliberately set to one side by the Court, and not determined. This is because the main issue in the judicial review proceedings was whether the Crown was required to make an offer to sell the land back to the purchasers in 1982/1983. The offer was made in 1989 when the Crown claimed the land first ceased to be required for state housing purposes. The High Court found in favour of the plaintiffs and ordered that the Crown make a fresh offer at the price at which the land should have been offered in 1983. It was thus unnecessary for the Court to determine the validity of the contract. Randerson J stated at p 41 of his judgment of 27 November 1998 -

“I should record that the Crown submitted that the offer made on 15 May 1989 has lapsed. In view of my findings, it is unnecessary to determine that question.”

Again, in his judgment of 22 December 1998 as to Relief and Costs he stated at p 6 -

“In the circumstances, it is unnecessary for me to consider the plaintiffs’ argument that the offers made in 1989 remain open, subject to the determination of the appropriate date for the offer back. In essence, I have found that the land ought to have been offered back at an earlier date which would involve the making of a fresh offer.”

[18] In the Court of Appeal, analysis of the main issue resulted in a finding in favour of the Crown overturning the High Court decision. The question of the validity of the 1989 contract was not pursued.

[19] Depending on the outcome of the plaintiffs’ appeal to the Privy Council, it may ultimately be unnecessary to determine the validity of the 1989 contract. However, as things stand the contract has been put starkly in issue by the Crown’s letter of 31 July 2000, stating -

“On any view, the offers lapsed on 30 August 1989 without having been accepted. The Crown has no contractual or other relationship with the Hulls as matters stand at the moment . . . the land has been held by the Crown as a matter of goodwill while the litigation has been proceeding. Having regard to the terms of the judgment of the Court of Appeal, the Crown now wishes to dispose of the land. If your clients wish to acquire it they should make a formal offer at current market value.”

[20] Of course the Hulls do not wish to make such an offer. They claim to be entitled to purchase at 1983 values, and await the Privy Council’s determination on that point. Pending that determination they wish to have their rights under the 1989 contract; as they claim them to be, preserved. The current proceedings arise from the Crown’s threat to act in disregard of the alleged 1989 contract, as advised by the letter of 31 July 2000.

[21] There is in my view no prejudice, embarrassment or delay, no abuse of process, involved in the issue of the present proceedings. While pleaded in the judicial review proceedings and always in the background the validity of the 1989 contract has not been determined. Faced with the Crown’s threat to sell, the plaintiffs are entitled to pursue that issue in order to protect their rights under the Public Works Act in respect of the land, as ultimately they are determined to be.

Conclusions

[22] The Crown has not established a clear case for the striking out of the plaintiffs’ statement of claim. Clearly the plaintiffs wish to ensure that the Crown does not dispose of the land, in light of the Crown’s declared intention to sell the land which in its view it has held as a matter of “goodwill” for too long. The plaintiffs seek to protect from disposition the asset, the land, in respect of which they have rights under s 40 Public Works Act. The outstanding issue is simply the price which the plaintiffs are required to pay for the land. There is no evidence of improper motive or abuse of process arising from delay on the part of the plaintiffs. There is no basis to strike out the statement of claim, which claims a contractual right by the plaintiffs to acquire the land.

[23] Result

[a] By consent, Peter Abe Hull in his personal capacity as first plaintiff in this proceeding is dismissed;

[b] In all other respects, the application is dismissed;

[c] The plaintiffs are entitled to costs on this application, on scale 2B.

[d] There will be timetable orders as follows -

[i] Defendant to file statement of defence within 21 days of the date of this judgment.

[ii] A directions conference is to be convened at a date following the expiration of the 21 day period.