Moeke v Raukawa Iwi Development Ltd
[2019] NZHC 3166
•4 December 2019
IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY
I TE KŌTI MATUA O AOTEAROA
TE ROTORUA-NUI-A-KAHUMATAMOMOE ROHE
CIV-2019-463-000046
[2019] NZHC 3166
BETWEEN FORD BENJAMIN MOEKE
Applicant
AND
RAUKAWA IWI DEVELOPMENT LIMITED
First Respondent
SOUTH WAIKATO DISTRICT COUNCIL
Second Respondent
Hearing: 7 November 2019 Appearances:
K J Patterson for the Applicant
K F Cornegé and M S Crocket for the Respondents
Judgment:
4 December 2019
JUDGMENT OF ASSOCIATE JUDGE SARGISSON
This judgment was delivered by me on 4 December 2019 at 10.30 a.m. pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date.......................................
Solicitors:
Mark Copeland Lawyers, Rotorua K J Patterson, Tauranga
MOEKE v RAUKAWA IWI DEVELOPMENT LTD [2019] NZHC 3166 [4 December 2019]
[1] The applicant seeks summary judgment on his statement of claim against the respondents.
[2] It is the second application the Court has dealt with in connection with an agreement for sale and purchase entered into between the applicant and the first respondent on 2 October 2018. The agreement was cancelled by the first respondent in circumstances referred to in a previous judgment I issued on a related caveat application:1
Background
[4] On 2 October 2018 the applicant, Ford Moeke, entered into an agreement for sale and purchase with the then registered proprietor of the property, Raukawa Iwi Development Limited. It is agreed that the agreement became unconditional and that settlement was to take place on 7 December 2018.
[5] On 7 December 2018 Raukawa’s solicitors wrote to Mr Moeke and advised that it had elected not to sell. Mr Moeke’s solicitors issued a settlement notice requiring settlement within 12 working days. Settlement with Mr Moeke did not occur because Raukawa had resold the property to the respondent, South Waikato District Council. Registration of Raukawa’s transfer of its interest in the property to the Council took place on the very day that Raukawa was supposed to settle with Mr Moeke, 7 December 2018. The Council accepts, for the purpose of this proceeding, that it knew that Mr Moeke had a binding contract with Raukawa to buy the property. It says (with scant elaboration) that it acted in the public interest in stepping in, as an alternative purchaser, to defeat the completion of his purchase.
[6] On 20 March 2019 the Council entered into an agreement for sale and purchase with a third party. That agreement became unconditional on 14 June 2019 and settlement was due to take place on 26 July 2019. The date for settlement has been extended to 13 September 2019.
[7] On 16 April 2019 Mr Moeke lodged his caveat against the title to the property. He claims a caveatable interest pursuant to a cestui qui trust. He contends that he acquired an equitable interest in the property pursuant to the agreement for sale and purchase with Raukawa, and that he was deprived of his right to acquire the property by the fraud of Raukawa and the Council. On this basis he claims an equitable interest in the property sufficient to support his caveat.
…
[9] On 23 May 2019 Mr Moeke commenced proceedings naming Raukawa and the Council as first and second defendants under CIV-2019-463-46. In the statement of claim he sought relief by way of damages and exemplary damages for breach of contract and conspiracy to defraud against the first
1 Moeke v South Waikato District Council [2019] NZHC 2282.
defendant, and conspiracy to defraud against the second defendant. Paragraph
[13] of the statement of claim pleads:
… the first defendant “made it clear” to the plaintiff that it did not intend to perform the first defendant’s obligations under the contract, thereby repudiating the contract. In consequence the plaintiff has cancelled the contract, as is hereby notified.
(emphasis added).
[10] At the same time he filed an application for summary judgment on the statement of claim.
[11] The documents in opposition to the application for summary judgment were filed on 18 July 2019.
[3] I declined the applicant’s application that his caveat not lapse. That was on the basis that the interest the applicant claimed in the caveat as purchaser pursuant to the agreement had been relinquished by the notice of cancellation of the agreement given in his statement of claim. The Council have since on-sold the property to a bona fide purchaser without notice of any land transfer fraud.
[4] The applicant has accepted the finding of cancellation and – having abandoned his claim for specific performance of the agreement – now seeks judgment on his amended statement of claim for damages. He relies on several causes of action: breach of contract against the first respondent, land transfer fraud against the second respondent and conspiracy to defraud against both respondents.
[5] In Mr Moeke’s amended statement of claim he sought relief in the form of orders which would effectively amount to specific performance and result in the property being transferred to Mr Moeke for the price agreed to. Those orders are no longer sought. The alternative relief sought in the statement of claim is $450,000 in compensatory damages; interest in accordance with the Interest on Money Claims Act 2016; $150,000 in exemplary damages and costs. He also seeks a direction as to how the damages should be apportioned between the two respondents.
[6] It is not in dispute that the first respondent repudiated and breached the agreement for sale and purchase by declining to effect settlement of Mr Moeke’s purchase. Instead, the first respondent opted to settle with the second respondent, pursuant to a new agreement for sale and purchase of the property. It is not disputed
that both respondents acted in the knowledge that Mr Moeke was ready to settle and his interest would be defeated by their actions.
[7] The respondents oppose summary judgment. The first respondent, Raukawa Iwi Development Ltd, argues the issue of damages for breach of contract is not simply an issue of quantum and involves an assessment of all of the possible discretionary factors going to “justification” for the breach. It argues that the Court cannot be satisfied at this point that the only issue to be tried is a simple one confined to amount, and says the entire claim for breach of the agreement should be dealt with at trial. Relating to the first cause of action, the respondents say damages are not available against the second respondent, South Waikato District Council, under s 43 of the Contract and Commercial Law Act 2017. However the most significant dispute regards the second cause of action in conspiracy to defraud against both respondents. Both respondents accept it is arguable that the sale to the Council was a fraud on the applicant in the sense that the term ‘fraud’ is used in the context of the Land Transfer Act 2017, but they do not accept that they were parties to a conspiracy to defraud. They contend they have an arguable defence; that there were exceptional factual circumstances driving their actions which arguably preclude any finding of conspiracy to defraud, and that in any case, land transfer fraud would not be sufficient on its own to support a finding of conspiracy. They also dispute the basis the applicant relies on in support of the amount of damages claimed.
[8] The exceptional circumstances the respondents rely on are that the applicant is a member of the Head Hunters gang, and that the Council was fulfilling a public and civic duty for the greater good in preventing the acquisition of the property for a genuinely suspected “gang pad” when it stepped in to buy the property. Mr Moeke disputes these allegations, saying his intention was to subdivide the property.
[9] I must determine whether the “exceptional” circumstances the Council points to provide the basis for an arguable defence to liability and/or to any amount of damages.
[10] My finding is that they do not. I am satisfied that breach of contract is acknowledged, the elements of conspiracy to defraud are made out and the claimed
defences are not available to the respondents. However, I am not satisfied that I can make a ruling as to quantum, so summary judgment will be entered for liability alone. I begin by setting out the approach on summary judgment. I then address the breach of contract issue, the elements of land transfer fraud and the conspiracy to defraud claim.
Summary judgment principles
[11] Plaintiff summary judgment is provided for in the High Court Rules 2016 at r 12.2(1). The driving question is whether the defendants have no defence to the claim.2 The Court must be left without any real doubt or uncertainty.3 The onus is on the plaintiff, but where evidence is sufficient to show there is no defence, the onus shifts to the defendants to demonstrate why the application should not succeed.4 The Court will not grant summary judgment where there is an arguable defence to any cause of action. The Court will decide questions of law where appropriate.5
[12] Applications often involve substantial factual disagreements, and summary judgment is not the appropriate procedure for resolving them all, or for assessing the credibility of the deponents. Still, the Court need not uncritically accept evidence that is inherently lacking in credibility.6 A robust and realistic approach to the evidence is appropriate, and the Court will enter judgment where the lack of a tenable defence is plain on the material before the Court.7
[13] Rule 12.3 permits the Court to give judgment on the issue of liability and direct a trial on the issue of the amount to be awarded if the party seeking summary judgment satisfies the Court that the only outstanding issue to be tried is quantum. The authors of McGechan on Procedure note that there are very few cases in which the Court has done so.8 Associate Judge Osborne, in 246 Investments Ltd v Herbert, wrote that “the dearth of “liability only” judgments has come about not by chance, but by principled
2 Pemberton v Chappell [1987] 1 NZLR 1, (1986) 1 PRNZ 183 (CA) at 185.
3 Krukziener v Hanover Finance Ltd [2008] NZCA 187, [2010] NZAR 307 at [26].
4 MacLean v Stewart (1997) 11 PRNZ 66 (CA).
5 European Asian Bank AG v Punjab & Sind Bank [1983] 2 All ER 508 (CA) at 516.
6 Krukziener v Hanover Finance Ltd, above n 3, at [26].
7 Jowada Holdings Ltd v Cullen Investments Ltd CA 248/02, 5 June 2003 at [28].
8 Andrew Beck and others McGechan on Procedure (online ed, Thomson Reuters) at [HR12.3.01].
reasoning.”9 He cited with approval the words of Eichelbaum J in Ghent v Brinkman, in the context of an application for summary judgment regarding breaches of fiduciary duties, which had already failed on the basis there may be an arguable defence:10
Even had I taken a different view of the issues discussed so far, I would not have felt able to accede to the plaintiffs' application for judgment on liability. This is not a case where there is any clear dichotomy between issues affecting liability on the one hand and damages on the other. The claims for aggravated and exemplary damages appear to open up virtually the whole field of the conduct of the respective parties, necessarily leading to an examination of all aspects of the relationship between them. Likewise with the question of the possible reduction of the plaintiffs' damages, whether on the basis dealt with in Day v Mead or (on the second cause of action) by way of a plea of contributory negligence on conventional grounds. Thus the Court would perforce have to examine and pronounce upon the very issues which by virtue of a summary judgment would have been presumed to have been decided in favour of the plaintiffs. Not only would that mean that the summary judgment procedure would have conferred little advantage from the point of view of saving expense and time but it would put the Court in the position where it might make findings which would not readily be reconciled with a holding that there was no tenable defence. For these reasons therefore I would in any event decline to enter summary judgment.
Breach of contract
[14] Raukawa repudiated its sale and purchase agreement with Mr Moeke by declining to settle and instead selling the property to the Council. This is not disputed.
[15] Counsel for Mr Moeke submits that damages are therefore available under s 43 of the Contract and Commercial Law Act 2017:
Power of court to grant relief
(1) When a contract is cancelled by any party, the court may, if it is just and practicable to do so, make an order or orders granting relief under this section.
(2) The relief may be granted in the course of any proceeding or on application made for the purpose.
(3)An order under this section may—
(a)direct a party to pay to any other party the sum that the court thinks just (subject to section 35):
…
9 246 Investments v Herbert HC Auckland, CIV-2008-404-6612, 10 July 2009 at [63].
10 Ghent v Brinkman, HC Wellington CP379.87, 11 September 1987 at 12–13.
[16] Counsel for the respondents submits that, while an order under s 43 can be made against someone who was not a party to the contract, the Court’s discretion does not extend to making an award akin to damages against the Council, which was not itself in breach. While the statement of claim does not directly claim against the Council under s 43, this appears to be an argument responding to the fact that the prayer for relief does not specify how damages should be apportioned between the two defendants, instead requesting the Court determine apportionment.
[17] Counsel for the respondents’ further submission is that the measure of any award under this head cannot be determined on the evidence at summary judgment. Counsel submits that Mr Moeke’s evidence relating to loss of profit is speculative. At present, counsel submits that Mr Moeke’s loss should be assessed as any difference in value between the purchase price Mr Moeke was prepared to pay and the current value of the property. Alternately, counsel says that quantifying an award will require a hearing of all the evidence, including the expert evidence, pointing for support to decisions which reflect hesitance about making awards under s 43’s statutory predecessor at summary level.11
[18] I accept that at present it is difficult to assess the precise value of what Mr Moeke has lost under the contract. The parties’ evidence differs as to the proper valuation of the property. The respondents have also provided evidence disputing the likelihood that Mr Moeke’s intended subdivision would have been granted consent, which makes the assessment of expectation damages difficult. I consider I can only enter judgment as to liability.
[19] I also note that Mr Moeke seeks exemplary damages of $150,000, a large amount relative to past awards.12 It is not entirely clear whether this is in relation to the contractual claim as well as the claim of tortious conspiracy, though the two are substantially intertwined in terms of the relevant facts. Neither counsel, nor I, have been able to find an example of the courts granting exemplary damages on summary judgment. In my view, it is more appropriate to leave exemplary damages to be
11 See M v B HC Auckland CP572/96, 8 August 1997.
12 At [98].
determined alongside the assessment of loss which will inform damages on the other two causes of action.
Land transfer fraud
[20]Fraud, for the purposes of the Land Transfer Act 2017, is defined at s 6:
6 Meaning of fraud
(1) For the purpose of this Act, other than subpart 3 of Part 2, fraud means forgery or other dishonest conduct by the registered owner or the registered owner’s agent in acquiring a registered estate or interest in land.
(2)For the purposes of subsection (1), the fraud must be against—
(a)the registered owner of an estate or interest in land; or
(b) the owner of an unregistered interest, if the registered owner or registered owner’s agent,—
(i) in acquiring the estate or interest had actual knowledge of, or was wilfully blind to, the existence of the unregistered interest; and
(ii) intended at the time of registration of the estate or interest that the registration would defeat the unregistered interest.
(3) For the purpose of subpart 3 of Part 2, fraud means forgery or other dishonest conduct by any person.
(4) The equitable doctrine of constructive notice does not apply for the purposes of deciding whether conduct is fraudulent.
[21] A registered title to or interest in land is not indefeasible where it was acquired through fraud on the part of the registered owner.13 However, as I already determined,
Mr Moeke’s equitable interest in the property has lapsed.14
[22] The respondents dispute that there has been land transfer fraud in this case, on the basis that the Council acted in a public interest, such that the requirement under s 6 for “forgery or other dishonest conduct” is not made out.
13 Land Transfer Act 2017, s 52(1).
14 Moeke v South Waikato District Council, above n 1.
[23] The respondents further submit that damages are not available for land transfer fraud alone – ss 51 and 52 provide for setting aside title as a remedy but do not provide for damages. Instead, they submit that damages must be sought through another cause of action.
[24] As such, I focus on the applicant’s final cause of action, conspiracy to defraud, as the means through which Mr Moeke might recover damages, and the appropriate point at which to consider whether the respondents’ argument that they were acting in the public interest suffices as a reasonably arguable defence to the allegations of fraud.
Conspiracy to defraud
[25] The applicant’s case amounts to the fact that both Raukawa and the Council knew of Mr Moeke’s unregistered interest in the land and intentionally completed their own transaction for the property, knowing it would defeat that interest. They acknowledge this as a deliberate intervention. Putting aside for a moment their claimed defence of public interest, on its face this at least amounts to land transfer fraud. Counsel for Mr Moeke submits that this constitutes tortious conspiracy.
[26] There are two types of tortious conspiracy: unlawful purpose conspiracy (also known as conspiracy to injure) and unlawful means conspiracy. I will address them in turn.
Unlawful purpose conspiracy
[27] Unlawful purpose conspiracies, or conspiracies to injure, are those in which multiple parties deliberately act to cause harm or injury to a party, even where the acts themselves would not be unlawful when undertaken in isolation by individuals. The elements which must be proven are:15
(a)an agreement or understanding between two or more people;
(b)a concerted course of action taken pursuant to that agreement or understanding;
15 See Wagner v Gill [2013] NZHC 1304.
(c)a dominant intention by the combiners to injure the plaintiff’s legitimate interests by that course of action;
(d)the absence of any legitimating object or just cause/excuse for the actions; and
(e)actual injury caused to the plaintiff.
[28] The difficulties in this case revolve around points (c) and (d). The requirement of a predominant purpose of injuring the plaintiff has been read generously towards defendants historically, and includes defendants’ pursuit of self-interest or actions in a public interest even where they cause harm to the plaintiff.16
[29] The respondents contend that their predominant purpose in revoking Mr Moeke’s contractual interest was not to injure him but to protect a legitimate interest – the safety of the Tokoroa community – which the Council in particular saw as threatened by the possibility of Mr Moeke establishing a gang pad. In other words, any damage to Mr Moeke was collateral to their real purpose.
[30] Counsel for the respondents has put in evidence the affidavit of Mr Smith, who is the Chief Executive of the Council. He explains Council’s concern that Mr Moeke might intend to use the property as a gang pad for the Head Hunters. He says this would allow the Head Hunters to establish a greater presence than they previously had in Tokoroa, which was of particular concern given the property is in a largely residential area and close to a primary school and cemetery. Thus, Council’s decision to purchase the property from Raukawa was made on the basis of a pre-emptive concern for public safety. Attached to the affidavit is a local news article reporting public support for the decision after it was made. Also attached is a Facebook post of Mr Moeke’s, linking an article about the proceedings, in which he uses the slogan “HHFFHH”, which is said to “Head Hunters forever, forever Head Hunters”. That post does not indicate any intention to use the property as a gang pad.
16 PTY Homes Ltd v Shand [1968] 1 NZLR 105 (SC) at 110–114; SSC & B Lintas New Zealand Ltd v Murphy [1986] 2 NZLR 436 (HC) at 462; and Monnery v Parsons [2018] NZHC 3414 at [20].
[31] To support its contention that Mr Moeke might intend to use the property as a gang pad (and that this was the basis of their decision at the time) the Council relies on the evidence of Inspector Dunsmuir, who acts as District Manager of Intelligence for the Bay of Plenty. He deposes that the Head Hunters are New Zealand’s third largest gang based on membership numbers, and involved in the manufacture and distribution of methamphetamine as well as violent and other offending. He says they operate out of gang pads, some of which are franchised as “Fight Clubs”. Inspector Dunsmuir does note there is no intelligence to suggest these “Fight Clubs” cause an increase in crime, but says “large numbers of gang members are known to intimidate members of the public, thereby causing fear of crime”.
[32] He deposes that Mr Moeke is a patched member of the Head Hunters. He says the Police received intelligence in 2017 that the Head Hunters wished to lease a building to become a gang pad in Tokoroa. He says in November 2018 the Police heard reports of a public post on Facebook depicting Mr Moeke standing outside the property, stating that it was to be the new Head Hunters gang pad in Tokoroa. This post was not sighted by Police intelligence staff and may have been deleted. He does provide a screenshot of an Instagram post dated 30 October 2018 from Mr Moeke’s account, including a photo of the property with the caption “The Start of a new era”, accompanied by hashtags of “#ownednotleased”, “#clubrooms”, “#gym”, “#home”, “#renovationtime” and “#HHFFHH”.
[33] Counsel for Mr Moeke disputes that these allegations are sufficiently credible on the evidence to be regarded as legitimate for the purpose of avoiding liability. Mr Moeke’s mother, Ms Crapp, is a practising solicitor in the Tokoroa region. She has filed an affidavit in which she deposes that she and her partner became involved in
Mr Moeke’s intended purchase of the property based on the subdivision potential of the property and it being uneconomical for Mr Moeke to obtain a mortgage from a non-banking financial institution. She says that, prior to settlement, she had a phone discussion with a Mr Evans, who was seeking a meeting on behalf of the Council to discuss concerns that the property was to become a Head Hunters gang pad. She says she told him Mr Moeke needed to be involved in the meeting, as well as seeking to include any neighbours who were concerned about the purchase. She deposes she had
a conversation at her office with a Mr Lee (a councillor) and his wife at her office in which she told them she and her partner planned to finance the purchase and subdivide and sell the sections, and that she was not going to be involved in financing a gang pad, though ultimately Mr Moeke was to be the legal owner. She says she emphasised that they would not get good re-sale prices if the property was a gang pad. She also told them to contact her son directly. She says she gave Mr Lee permission to share the contents of that discussion.
[34] Counsel for Mr Moeke also points to a decision of the High Court reviewing bylaws which impacted on the freedom of expression of gang members.17 While I do not consider that decision relevant to the present claims in contract and tort, I bear in mind a common theme between that case and this one that actual or alleged gang membership is not in itself justification for trampling on individual rights.
[35] Council’s view is that any damage caused to Mr Moeke’s interest was, effectively, purely as collateral to the public safety interest driving its actions. Below I make a finding that the Council has been party to an unlawful means conspiracy. As such, I do not consider that I should make a finding on this head. While I consider its conduct was clearly flawed, I do not have sufficient details before me to be certain I should enter summary judgment on this particular framing of tortious conspiracy.
Unlawful means conspiracy
[36] As may be apparent from its name, an unlawful means conspiracy is one involving an agreement to perform an unlawful act and cause damage to the plaintiff’s legitimate interests, though the intention or purpose element is less demanding than is required for an unlawful purpose conspiracy. 18 The Court of Appeal in Wagner v Gill confirmed that the elements of the tort are:19
(i)the existence of a combination or agreement;
(ii)unlawful action (unlawful means);
(iii)an intention to injure the claimant; and
17 Schubert v Wanganui District Council [2011] NZAR 233 (HC).
18 Fairbairn Wright & Co v Levin & Co (Ltd) (1914) 34 NZLR 1 (CA) at 18; and Wagner v Gill
[2014] NZCA 336, [2015] 3 NZLR 157.
19 Wagner v Gill, above n 18, at [50]; and Perrot-Hunt v Johnston [2019] NZHC 2085 at [104]
(iv)actual damage caused to the claimant.
[37] The intention to cause damage need not be dominant over other coexisting intentions, though it appears the conduct in question should at least be “directed at the plaintiff” with knowledge that it will likely cause injury.20
[38] The Court in Wagner v Gill noted that the meaning of “unlawful means” is unsettled:21
[54] The concept of “unlawful means” in the context of the economic torts is a controversial and difficult one. There are inconsistent authorities. Some limit the concept to torts, others to torts and breaches of contract, and others yet again to any unlawful conduct of any kind, whether civil or criminal. To complicate matters further, recent English decisions suggest there may be different patterns of liability depending on whether it is a three party tort situation or a two party tort situation. A three party situation is where the harm is inflicted on the claimant through an intermediary, as distinct from being inflicted directly by the defendant.
[39] The Court appeared to praise the British case of Total Network, which held that conduct need not be independently actionable at the suit of the claimant to qualify as an “unlawful means”, and was not restricted to tortious conduct, though this ruling was confined to criminal conduct and did not expressly consider “conduct lower on the scale of blameworthiness”.22 The Court in Wagner v Gill did accept breach of fiduciary duties could qualify in principle, though did not in the instance of a director breaching fiduciary duties to a company at the suit of an affected creditor (a decision influenced by policy considerations).23
[40] The United Kingdom Supreme Court in JSC BTA Bank v Ablyazov (No 14) considered whether contempt of court could constitute an unlawful means for the purpose of conspiracy.24 The Court unanimously considered that it could: the test could not simply depend on whether the unlawful means adopted would give rise to a cause of action independent of conspiracy – instead the test was whether there was a
20 Wagner v Gill, above n 18, at [106]–[107].
21 Citations omitted.
22 At [71]; citing Revenue and Customs Commissioners v Total Network SL [2008] UKHL 19, [2008] 1 AC 1174.
23 At [80]–[87].
24 JSC BTA Bank v Ablyazov (No 14) [2018] UKSC 19, [2018] 2 WLR 1125.
just cause or excuse for combining to use unlawful means.25 This would depend on first, the nature of the unlawfulness, and second, its relationship with the resultant damage to the claimant.26 Regarding non-criminal acts, the Court said the following:
[15] The reasoning in Total Network leaves open the question how far the same considerations apply to non-criminal acts, such as breaches of civil statutory duties, or torts actionable at the suit of third parties, or breaches of contract or fiduciary duty. These are liable to raise more complex problems. Compliance with the criminal law is a universal obligation. By comparison, legal duties in tort or equity will commonly and contractual duties will always be specific to particular relationships. The character of these relationships may vary widely from case to case. They do not lend themselves so readily to the formulation of a general rule. Breaches of civil statutory duties give rise to yet other difficulties. Their relevance may depend on the purpose of the relevant statutory provision, which may or may not be consistent with its deployment as an element in the tort of conspiracy. For present purposes it is unnecessary to say anything more about unlawful means of these kinds.
[41] I note the authors of Todd on Torts have identified further instances of conduct which could qualify:27
In addition to torts and crimes, a variety of other wrongs, not necessarily involving statutory breaches, appear also to have been accepted expressly or impliedly as at least potentially able to constitute unlawful means in this context. These include breach of confidence, fraud and deceit, breach of fiduciary duty, knowing assistance and breach of contract. Inducing breach of contract, itself a tort, may also be unlawful means. The tort of intimidation has been held to be unlawful means in this context, as have threats that constitute intimidation. The infringement of “a guaranteed constitutional right” may also be included, as may contempt of court.
(citations omitted)
[42] Finally, I note the importance of policy considerations in this area, as emphasised by the Court of Appeal in Wagner v Gill:
[79] As will be readily apparent, it is not easy to reconcile the various decisions. An overriding theme, however, in all economic tort cases is that the encroachment of the common law into the regulation of economic competition must for obvious reasons be subject to some limits. In cases such as this one the drawing of those limits ultimately depends not on close textual analysis of the authorities but largely on policy considerations, having regard to the underlying purpose of the tort.
25 At [11].
26 At [11].
27 Stephen Todd (ed) Todd on Torts (8th ed, Thomson Reuters, Wellington, 2019) at 744.
[43]Counsel for the respondents rests its case on three points.
(a)First, as above, that the respondents’ sole concern was for the safety of the Tokoroa community, with no intention or purpose of harming Mr Moeke’s legitimate interests.
(b)Second, that the Council has an arguable defence to land transfer fraud, in that their actions were in the public interest, and therefore it did not commit land transfer fraud and there was no conspiracy to do so.
(c)Third, if I consider the Council did commit land transfer fraud, that there is no authority that land transfer fraud constitutes an “unlawful means” for the purpose of tortious conspiracy. Counsel submits that, given the courts’ general hesitancy to expand the scope of the conspiracy tort, it would be inappropriate to enter summary judgment on unlawful means conspiracy on the basis of land transfer fraud.
[44] Even on affidavit evidence, I do not consider the first argument raised to be tenable. No matter how good they considered their intentions to be, the respondents both had notice of Mr Moeke’s interest and acted to defeat it. For the comparatively lower intent requirements of unlawful means conspiracy, both respondents had sufficient intention to injure Mr Moeke’s interests.
[45] I turn to whether Council has put forward an arguable defence against the allegation of land transfer fraud. Counsel for the respondents points to the requirement for dishonesty under s 6 of the Land Transfer Act.
[46] Counsel also cites comments in Hinde McMorland & Sim Land Law in New Zealand that, under the previous legislation, fraud in a land transfer context was:
(1)Wider than the common law concept of fraud because it is not confined to deceit or fraudulent misrepresentation; and
(2)Narrower than equitable fraud because dishonesty in the sense of moral turpitude is an essential element.
[47] Counsel notes that Spiller’s legal dictionary defines “moral turpitude” as “conduct or character that is evil or has an element of being depraved or wicked”.28 Counsel also notes cautions from the Courts under the previous legislation that each case must depend on its own circumstances,29 and that comparison to existing cases may not always be useful given fraud is highly context-dependant.30
[48]The submissions and evidence as to fact are the same here as those above.
[49] With respect, I do not accept this submission. Where the designed object of a transfer is to cheat someone of a known existing right to land, that is fraudulent for land transfer purposes.31 The Council was on notice of Mr Moeke’s interest in the property. While it may well have believed it was acting in good faith with regard to the public, with regard to Mr Moeke its intention was clearly to deprive him of an interest in the property which he had, in legal terms, come by fairly. Further, the respondents have not provided serious, substantial evidence to demonstrate that their concern Mr Moeke would use the property as a gang pad was more than a mere supposition or suspicion, nor what the consequences of that use would be. I consider the applicant has demonstrated land transfer fraud occurred.
[50] This being the case, I must now consider whether this instance of land transfer fraud constitutes an unlawful act or means for the purpose of tortious conspiracy.
[51] There is not authority on this head and I have not had the benefit of detailed submissions on the point. Neither side has made detailed submissions as to policy considerations.
[52] I consider it does. In my view, Mr Moeke’s particular position is an unusual one, in that he has relinquished what would be the usual remedy for land transfer fraud by cancelling the contract on which his equitable interest was based. He has recourse
28 Peter Spiller New Zealand Law Dictionary (9th ed, LexisNexis, Wellington, 2019) at 197.
29 See Waimiha Sawmilling Co Ltd v Waione Timber Co Ltd [1926] AC 101 (PC) at 107.
30 See Harris v Fitzmaurice [1956] NZLR 975 (SC) at 978.
31 See Waimiha Sawmilling Co Ltd v Waione Timber Co Ltd, above n 29, at 106–107; and Assets Co Ltd v Roihi [1905] AC 176 (PC) at 210. I also bear in mind the Court’s caution regarding the distinction between consciously dishonest conduct and behaviour founded upon a mistaken but honest belief in Tapsell v Murray (2008) 9 NZCPR 184 (HC) at [64].
in his cause of action for breach of contract, though I note he may struggle to demonstrate his loss, and that the courts are cautious in awarding exemplary damages for breach of contract. Further, this recourse would only be against Raukawa.
[53] The Council’s conduct was stepping in to defeat Mr Moeke’s contractual and equitable rights, which are rights the courts take seriously (though not as seriously as rights under the Bill of Rights Act). The function of s 6 and ss 51 and 52 of the Land Transfer Act is to protect those rights, including by designating the Council’s conduct as fraud. I consider land transfer fraud can appropriately be considered an unlawful means for the purposes of tortious conspiracy, though this will depend on the facts of each case rather than representing a general rule.
[54] I consider the respondents do not have a reasonably arguable defence to Mr Moeke’s cause of action in tortious conspiracy. The claim is made out.
Quantum
[55] As I discussed above at [18]–[19], while I am satisfied as to Raukawa’s liability for breach of contract, I do not consider I can viably assess his loss on the evidence presently available. The same is true for the unlawful means conspiracy claim. Both of these require an assessment of Mr Moeke’s loss which I cannot confidently make on the evidence. While I accept that summary judgment on liability alone is relatively unusual, given the tortious and contractual claim are both in respect of the same single transaction, I consider it is appropriate here.
[56] I have not been able to find an instance of the Court awarding exemplary damages at the summary judgment stage. I consider any award of exemplary damages is best determined alongside the quantum of any other award the Court sees fit to make.
Result
[57] I enter summary judgment as to liability under r 12.3 of the High Court Rules on the following causes of action:
(a)Mr Moeke’s cause of action against Raukawa for breach of contract;
(b)Mr Moeke’s cause of action against Raukawa for tortious conspiracy; and
(c)Mr Moeke’s cause of action against the Council for tortious conspiracy.
[58] A trial fixture to determine the issues of quantum will have to be allocated. The Registrar should allocate an initial case management conference for the purposes of pre-trial directions and allocating a trial date.
Costs
[59] If costs cannot be agreed, it may be that the issue of costs should be reserved for determination when the quantum of any award is determined at trial. But I leave the option for the parties to file memoranda as to costs within ten working days.
Associate Judge Sargisson
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