Paki v Attorney-General HC Hamilton CIV 2004-419-17
[2008] NZHC 2435
•30 July 2008
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IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
CIV 2004-419-17
BETWEEN JOHN HANITA PAKI, TORIWAI ROTARANGI, TAUHOPA TE WANO HEPI, MATUI MAMAE PITIROI AND GEORGE MONGAMONGA RAWHITI AS TRUSTEES OF THE POUAKANI CLAIMS TRUST AS THE MANDATED REPRESENTATIVES OF THE POUAKANI PEOPLE
Plaintiffs
ANDATTORNEY-GENERAL OF NEW ZEALAND FOR AND ON BEHALF OF THE CROWN
Defendant
Hearing: 5, 6, 7, 12 and 13 May 2008
Appearances: Ian Millard QC and Miharo Armstrong for Plaintiffs
Helen Aikman QC, Andrew Beck and Damen Ward for Defendant
Judgment: 30 July 2008
JUDGMENT OF HARRISON J
In accordance with R540(4) I direct that the Registrar endorse this judgment with the delivery time of
4:30 pm on 30 July 2008
SOLICITORS
Rangitauira & Co (Rotorua) for Plaintiffs
Crown Law (Wellington) for Defendant
COUNSEL
Ian Millard QC; Helen Aikman QC; Andrew Beck
PAKI & ORS AS TRUSTEES OF THE POUAKANI CLAIMS TRUST AS THE MANDATED REPRESENTATIVES OF THE POUAKANI PEOPLE V ATTORNEY-GENERAL HC HAM CIV 2004-419-
17 30 July 2008
Table of Contents
Paragraph No.
Introduction [1] Waikato River [8] History [11]
(a) Pouakani No 1 [16] (b) Pouakani B6 and B6A [18] (c) Pouakani C3, B8 and B10 [20] (d) Pouakani B6E [22] (e) Pouakani No 2 [23]
Pouakani People’s Claim [25]
Jurisdiction
(1) Justiciability : PCSA
(a) Introduction [32] (b) Settlement of Fiduciary Duty Claims [36] (c) Settlement of Waitangi Tribunal Claims [37] (d) River Claims Exception [42]
(2) Standing [49]
(3) Navigable River
(a) CMAAA [59] (b) Ad Medium Filum [63] (c) Pouakani Case [70] (i) Divisibility Test [71]
(ii) Segmented Test [80] (d) Factual Inquiry [88] (e) Conclusion [103]
Fiduciary Relationship [108]
(1) Treaty of Waitangi
(a) Pouakani Case [109] (b) Principles [111] (c) Relationship
(i) Statutory Framework [116] (ii) Self-Dealing [121] (iii) Postscript [127]
(d) Disadvantage, Vulnerability and Unequal
Bargaining Power [129]
(e) Canadian Authorities [135] (2) Extinguishment of Customary Title [142] Breach [156] Relief [157] Limitation Act 1950 [167] Laches and Acquiescence [175] Decision [178]
Introduction
[1] The history of this proceeding and the commitment of those responsible for it reflect the spiritual importance of the underlying issue to a significant group of Mäori.
[2] The descendants of the hapu who collectively constitute what are known as the Pouakani people have long held grievances about the alienation of their lands abutting the upper reaches of the Waikato River and of the adjoining riverbed. That land, which runs continuously for about 20 miles, was acquired progressively by the Crown between 1887 and 1892. Nearly a century later the Pouakani people sought redress through the Waitangi Tribunal, the Mäori Land Court and this Court, culminating in the Crown’s agreement to settle land and riverbed claims on terms embodied in a deed of settlement and in the Pouakani Claims Settlement Act 2000 (the PCSA). Included within those terms were an apology from the Crown, payment of monetary compensation, return of lands and an acknowledgement that the Crown was released and discharged from liability for any Pouakani claims.
[3] Nevertheless, despite the settlement, representatives of the Pouakani people have since issued this proceeding, claiming a beneficial interest in the length of the riverbed adjoining their former land. The representatives allege that the Crown was in a fiduciary relationship with the original Mäori owners; that the Crown owed an incidental obligation to advise those owners before acquiring their land of the principle of usque ad medium filum aquae – that is, the legal title to the land ran to the riverbed’s mid point – and to obtain their informed consent to the transactions; and that the duty was breached. The representatives seek a declaration that the Crown holds the relevant area of the riverbed on a constructive trust subject to specific terms.
[4] The Crown denies the existence of a fiduciary relationship or of a breach of an obligation to advise. It also raises affirmative defences of limitation, laches and acquiescence and its subsequent alienation of part of the bed to third parties. However, three jurisdictional issues require determination before the Crown’s
substantive defences are considered: (1) whether or not the representatives’ claim is itself justiciable given the terms of the PCSA; (2) whether the current plaintiffs have status to pursue the claim; and (3) whether the Waikato River was navigable in 1903. If that final touchstone seems obscure, it is because a little known statute was enacted then – the Coal Mines Act Amendment Act 1903 (the CMAAA) – which provided that the beds of all navigable rivers ‘shall be deemed to have always been vested in the Crown’: s 14. Mr Ian Millard QC accepts the Pouakani people’s claim must fail if the Waikato was then ‘a navigable river’.
[5] The factual difficulties faced by a Court in 2008 in attempting to determine whether the Waikato River was a navigable river over a century ago or whether a party owed or more particularly breached a fiduciary duty even earlier do not require emphasis. In the absence of direct evidence from witnesses involved in the relevant transactions, both sides have relied on the less perfect process of drawing inferences from contemporaneous documents. Each called experts and a large volume of documentary material was also produced.
[6] One important witness was absent. Mr John Paki was the driving force behind this litigation. He died last year. It is appropriate to acknowledge his commitment to the Pouakani people’s cause.
[7] It is necessary first to set the historical context for this claim and to summarise its nature before considering the jurisdictional issues, the substantive allegation of breach of fiduciary duty and the affirmative defences.
Waikato River
[8] The Waikato River is central to this proceeding. It is one of New Zealand’s major waterways. Its true source is said by some to be on the northern slopes of Mt Ruapehu in the central North Island from where it feeds as the Tongariro River into the southern end of Lake Taupö. The water intermingles with waters from a number of other sources before exiting the lake at its northern end some 30 miles away. Its outlet at that point is generally regarded as the start of the Waikato River which runs 204 miles to the sea at Port Waikato (all references to distances in this
judgment will be in miles rather than kilometres as that was the form of measurement used in all relevant documents and by witnesses).
[9] The Waikato River is and always has been of great spiritual and cultural importance to Mäori. It is the taonga or treasure of the Tainui and Ngati Tuwharetoa iwi. Its significance in Mäori mythology was summarised as follows by Sir Apirana Ngata following his visit to the Waikato district in 1900: Waitangi Tribunal Report, the Pouakani Report, Wai 33 1993 at 291-292:
There the Waikato River wends its way often splitting the very sources of the earth to be disgorged into the West Coast. Te Heuheu at Tongariro has the source, where legend has it a taniwha smote the rock and out of it gushed forth the river Waikato to make for itself a path through the lake of Taupo. Eschewing the Arawa domain, it wends its way, gathering strength from its many tributaries until at Ngaruawahia it is joined by the Waipa which in its turn has gathered in all the Maniapoto tributaries, and thus reinforced, it flows by Taupiri and makes for the Tamaki River – Tamaki Makaurau. Alas it is diverted by the land formation and disgorges through the sandy wastes of the West Coast into the ocean…
[10] The river has also had great social and economic importance to Mäori. It was a highway for the traditional form of travel by waka or canoe. People and goods were transported by this means. It was also a rich food source or gathering place. The fish included native trout, eels and freshwater crayfish, and birds inhabited banks and swamps.
History
[11] This case involves five distinct blocks of land. All were part of the original Pouakani block and are located near the town of Mangakino adjoining the Waikato River on its true left bank; that is, on the left bank looking downstream. The land runs between the river’s confluences with the Waipapa Stream, the downstream boundary of Pouakani B6E, and the Waipapa River. (A crude map depicting the river and its physical relationship to the land is annexed.) The strip starts 60.4 miles downstream from the control gates at the outlet of Lake Taupö and runs to 82.2 miles from that point.
[12] The Native Land Court was established in 1864 for the purpose of ascertaining legal ownership of Mäori land held according to customary title. Members of the interested hapu first approached the Court relating to the Pouakani block in December 1883 as part of a wider application to mark external boundaries by survey of large areas north of Lake Taupö. This step followed an application by the owners of the nearby Maraetai block to the Court for ascertainment of title in
1881. By 1884 all the lands to the east and north of the Pouakani block had been dealt with by the Court.
[13] The original Pouakani block totalling 122,350 acres was created by the Native Land Court in 1886 as part of its hearings into the Tauponuitia block, initiated by Te Heu Heu Tukino and others on behalf of Tuwharetoa. The block was subdivided into five parcels in September 1887, namely the Pouakani No 1, Pouakani No 2, Pouakani, Kaiwha and Hapotea blocks. But the Native Land Court Acts Amendment Act 1889 nullified those subdivision orders except for that creating the Pouakani No 1 block.
[14] The Native Land Court reinvestigated and reheard claims to the whole
Pouakani block (except for Pouakani No 1) in 1891. The block was subdivided into
25 parcels in August 1891. Several were further subdivided in 1899. For the purposes of this proceeding the relevant post 1891 blocks are Pouakani No 1, B6 (and its later subdivision B6A), C3, B8 and B10 and Pouakani No 2.
[15] The history of these blocks is as follows:
(a) Pouakani No 1
[16] On 19 September 1887 the Native Land Court ordered that Pouakani No 1, adjoining the river in the Mangakino/Whakamaru locality and totalling 20,000 acres, vest in the Crown in a state of freehold for payment of survey and other costs which amounted to £1,650. On 24 September 1887 the Court declared Pouakani No 1 to be the property of the Crown. The block contained 20,000 acres and for sale purposes was valued at 2 shillings per acre, giving a total value of £2,000. The Crown land purchase officer paid the £350 difference between the value of the block (£2,000)
and the cost of the survey (£1,650) to 17 Mäori some time on or before
20 September 1887.
[17] The Court had recognised claims from three tribes but rejected those made by two others. It also allowed claims by individuals linked by descent to those hapu, provided they could prove occupation. While the Court did not award Pouakani No 1 to any individual Mäori because it was instead vested directly in the Crown, it nevertheless recognised 192 owners. A notice later declared that the Crown had acquired this block pursuant to the North Island Main Trunk Railway Loan Application Act 1886: New Zealand Gazette (1892) p1304.
(b) Pouakani B6 and B6A
[18] Pouakani B6 was created in 1891 with 242 owners. The Crown purchased the interests of 162 of the owners (amounting to interests equivalent to 16,916 acres) under Auckland Deed 3246 and subsequently sought to partition out the interests it had acquired. The total purchase price was paid over a six year period. The Native Land Court confirmed the purchase by issuing an order for Pouakani B6A on 25 July
1899.
[19] This block contained the majority of the land adjacent to the Waikato River in the former Pouakani Block (the exception being Pouakani B6E, which was not sold). A notice later declared Pouakani B6A to be Crown land: New Zealand Gazette (1900) p105.
(c) Pouakani C3, B8 and B10
[20] The Pouakani C3, B8 and B10 blocks were purchased by the Crown under Auckland Deed 1809 dated 12 March 1892. The titles to C3, B8 and B10 were awarded to one, six, and 20 individuals respectively. On 13 September 1893 these blocks were included within certificate of title SA67/267 that was issued to the Crown. A notice later declared that the Crown had acquired these blocks pursuant to
the North Island Main Trunk Railway Loan Application Act 1886: New Zealand
Gazette (1894) p170.
[21] None of the plaintiffs, or their ancestors, has owned any part of Pouakani 1, B6A, C3, B8 or B10 since 1892. These blocks became part of a Crown land bank to provide security for the costs of constructing the Main Trunk Railway but were never used for that purpose.
(d) Pouakani B6E
[22] A 100 acre portion of land in the north west of Pouakani B6 and fronting the river known as Pouakani B6E was not included in the 1899 sale to the Crown. This block remained in the hands of descendants of its original owners until its river frontage was exchanged for adjacent Crown land in 1952. The riverside land was declared Crown land in 1969: New Zealand Gazette (1969) p1786.
(e) Pouakani No 2
[23] In 1915 the river frontage strip of Pouakani C3, Pouakani B8, and part of Pouakani No 1 was vested in Wairarapa Mäori in satisfaction of the Crown’s promises in the Wairarapa Lakes Agreement of 1896. The area exchanged became known as Pouakani No 2. Part of it was taken in 1949 under the Public Works Act
1928 for the development of waterpower: New Zealand Gazette (1949) p2491.
[24] The remaining Pouakani No 2 river frontage was taken in 1963 under the Public Works Act 1928 for the development of waterpower: New Zealand Gazette (1963) pp1071-1072. Part Lot 1 DPS 89539 was transferred to Mighty River Power Ltd (a wholly Crown owned enterprise) in 2003, and section 23 Block XI Whakamaru Survey District is vested in Taupo County. Otherwise the Crown holds the balance of the land.
Pouakani People’s Claim
[25] The representatives of the Pouakani people plead that the Crown owed the original owners a fiduciary duty emanating from a combination of: (1) the provisions of the Treaty of Waitangi; (2) the relationship between the Crown and indigenous people at the times of acquisition and sale; (3) the Crown’s pre-emptive right vested by statute to purchase an area including the Pouakani lands, preventing sale to other parties and the Pouakani people from testing the market and resulting in a less than fair price (I might interpolate, though, that this is not a claim for compensation for underpayments); and (4) the disability of the Mäori owners of the lands by virtue of their use of Te Reo Mäori as their primary language, their lack of education except in tikanga and other matters Mäori, and the absence of the benefit of legal advice.
[26] The representatives plead that, as a result of these four factors, the Crown as a party to the Treaty had a duty to act reasonably and in good faith towards Mäori (with a reciprocal obligation on Mäori); and had fiduciary obligations or at least obligations akin to fiduciary obligations to the Mäori owners of the Pouakani lands in its dealings with them.
[27] These obligations included the duty to deal fairly and equitably and further to (1) only extinguish native rights (including to the beds of the rivers) on fair terms; (2) ensure that free and informed consent was obtained before extinguishing native rights (including to the beds of rivers); (3) explain the exact nature of the dealing when dealing with native rights, particularly rights to the riverbed when such rights are based on legal concepts alien to Mäori (including that the purchase of dry and visible land includes land under water and the concept that a river can be divided into two based on the ad medium filum rule (itself an arcane term unlikely to be known to Mäori at the time)); (4) to obtain the specific and informed agreement of the Pouakani people to take the bed of the Waikato River to the extent that it adjoins the river land; and (5) ensure that proper compensation is paid for loss of native rights (including to the beds of rivers).
[28] The representatives say that the Crown breached its obligations because with full knowledge of the ad medium filum principle its representatives (1) failed to explain to the original owners the significance of the principle and its effect on their ownership and/or rights of use of the Waikato River and its bed from Atiamuri to the Waipapa Stream when presenting material to the Native Land Court in 1887 when Pouakani 1 was vested in the Crown; (2) acquiring Pouakani blocks B10, C3 and B8 by purchase and then confirming such acquisitions in the Gazette; and (3) failing to obtain the owners’ informed consent to the transactions.
[29] As a result, the representatives say the original owners ‘failed to retain the land under the river adjoining the Pouakani land’. I construe this enigmatic pleading as an allegation that, but for the Crown’s failures, the original owners would not have entered into the transactions of sale.
[30] The representatives seek the remedy of a declaration that, to the extent the Crown has claimed ownership of the bed of the Waikato River adjacent to the five blocks of land under the principle of ad medium filum, it holds the riverbed as constructive trustee for the Pouakani people on terms that the Pouakani people: (1) have access to and use of the riverbed adjoining the land; (2) be consulted on all uses of the river in that area; (3) receive any benefits whether by payment or otherwise that the Crown or anyone claiming through it directly or indirectly obtains or has obtained from using the rights to the bed; and (4) be entitled to call for the lands’ return.
[31] I shall now address each of the three jurisdictional issues.
Jurisdiction
(1) Justiciability : PCSA (a) Introduction
[32] First, Ms Helen Aikman QC for the Crown submits that the representatives’ claim predicates a relationship of an imbalance of power between Mäori and the Crown arising from the economic and social consequences of colonisation and the passage of laws without Mäori consent. The evidence given for the Pouakani people at trial, she observes, relates to grievances which are familiar to the Waitangi Tribunal whose jurisdiction and processes are specifically designed to deal with historical complaints that would otherwise be time barred. In substance, Ms Aikman says, this claim seeks a remedy for a breach of the Treaty of Waitangi and is suitable for resolution as a Treaty claim but the issues are consequently non-justiciable when pursued in this jurisdiction.
[33] In my judgment there is a more fundamental objection to the justiciability of the representatives’ claim. The PCSA expressly records that the settlement is final and releases and discharges the Crown ‘from any obligations, liabilities and duties in respect of [the Pouakani boundary claims and the Pouakani historical claims] …’: s 12(1). The Act also bars a Court or judicial body from inquiring into or making a finding in relation to any of ‘Pouakani historical claims’: s 12(3). That term is expressly defined as follows: s 10:
(1) In this Act, Pouakani historical claims means—
(a)all claims (whether or not researched, registered, or notified) made at any time by a Pouakani claimant and—
(i) founded on rights arising from the Treaty of
Waitangi, the principles of the Treaty of Waitangi, statute, common law (including customary law and
aboriginal title), fiduciary duty, or otherwise; and
(ii) arising from or relating to acts or omissions before
21 September 1992—
(A) by or on behalf of the Crown; or
(B) by or under legislation; and
(b)all of the claims referred to in the Wai 33 and Wai 405 claims to the Waitangi Tribunal, including—
(i) the claims of 27 March 1987; and
(ii) the amended statement of claim of 23 October 1987 referred to in Appendix 2 of the Waitangi Tribunal
Report 1993 (The Pouakani Report 1993 (Wai 33));
and
(iii) the addendum to the amended statement of
claim dated 27 April 1989 and referred to in
Appendix 2 of the Waitangi Tribunal Report
1993; and
(iv) the claims of 21 October 1993.
(2)In this Act, Pouakani historical claims does not include any claim by a Pouakani claimant to the Waikato River.
[Emphasis added]
[34] A ‘Pouakani claimant’ is defined as: s 9:
(a) the Pouakani people:
(b)1 or more individuals, whanau, marae, or hapu of the Pouakani people:
(c) the Pouakani governance entity: (d) the Pouakani Claims Trust:
(e) a trustee of the Pouakani Claims Trust:
(f)a person acting on behalf of any 1 or more persons or groups referred to in paragraphs (a) to (e):
(g) a person acting on behalf of any 1 or more persons who comprise a part of, are beneficiaries of, or are members of, any 1 or more persons or groups referred to in paragraphs (a) to (e)
[35] The ‘Pouakani people’ are defined as: s 9:
… all of the individuals who are the descendants, as determined by the
Maori Land Court, of the original owners of the Pouakani Block, being—
(a)the owners included in Schedule 1 of the deed of settlement, as identified by that Court in a judgment dated 4 August 1891 and recorded in Waikato Minute Book, Volume 27, Folio 177 to 184 inclusive, Volume 28, Folio 2 to 27 and 32 to 34 inclusive; and
(b)the descendants included in Schedule 2 of the deed of settlement, as identified by that Court in an order dated 11 May 1959; and
(c)any other person accepted by that Court as being a descendant of the original owners of the Pouakani block.
(b) Settlement of Fiduciary Duty Claims
[36] The representatives’ claim in this proceeding falls squarely, in my judgment, within the scope of both alternative limbs of s 10(1). That provision, by use of the phrase ‘at any time’, extends to future claims. In terms of the first or general statutory limb, this claim is founded solely upon breaches of a fiduciary duty allegedly relating to and attaching at the time of the Crown’s dealing with the
original owners and acquisition of the Pouakani land between 1887 and 1892:
s 10(1)(a)(i). And the Crown’s alleged omissions occurred about a century before
21 September 1992: s 10(1)(a)(ii). The representatives’ claim is expressly barred by s 10(1)(a).
(c) Settlement of Waitangi Tribunal Claims
[37] Alternatively, in terms of the second or specific limb, in August 1989 the Waitangi Tribunal heard a wide-ranging substantive application by Mr Paki on behalf of the Pouakani people arising from the Crown’s acquisition of their land: s 10(1)(b). That claim, Wai 33, was brought under the Treaty of Waitangi Act 1975 and was referred to in the preamble to the PCSA and in s 10(1)(b). The Pouakani people’s amended statement of claim before the Tribunal included what is described as an addendum which relevantly pleaded:
2.THE Pouakani Block as originally decreed contained land adjacent to the Waikato River. … The loss of this land is prejudicial to the Claimants in that their valued taonga, the riverbank lands, has been taken and destroyed, and has further caused the Claimants to lose possible rights to the bed of the river as riparian landowners.
…
4. SECTION 261 of the Coal Mines Act 1979 [the successor to s 14
CMAAA] vests the bed of any navigable river in the Crown. This section and its antecedents are a breach of the principles of the Treaty of Waitangi, and, to the extent that it deprives the Claimants of their rightful interests in the bed of the Waikato River, is prejudicial to the Claimants.
[38] The addendum sought this relief:
(b)Recognition of the Claimant’s interests in ownership and management of the river.
(c) Compensation for the Crowns’ [sic] acquisition of the bed of the river.
(d) Repeal of Section 261 of the Coal Mines Act 1979.
[39] The Pouakani people’s claim to the riverbed is the addendum referred to in Appendix 2 of the Tribunal report and is expressly identified as a Pouakani historical claim: s 10(1)(b)(iii). While the riverbed claim brought in Wai 33 was not based upon an allegation of breach of fiduciary duty as pleaded here, the nature of the
cause of action is immaterial to the meaning of the term ‘the claims’ where used in s 10(1)(b): a claim is an assertion of a right or a demand for a remedy or relief: see West Wake Price & Co v Ching [1956] 3 All ER 821 at 829-830, Devlin J.
[40] The assertions or demands made in Wai 33 and this proceeding are materially the same. Wai 33 sought recognition of ‘interests in ownership and management of the river’. That is a less sophisticated but nevertheless legally identical demand to the relief sought in this Court, namely a declaration that the Crown holds the riverbed as constructive trustee for the Pouakani people on terms including rights of access, of consultation and to call for return of ownership.
[41] Furthermore, both claims share the same ultimate objective of financial compensation. In Wai 33 the Pouakani people demanded compensation for the Crown’s acquisition of the riverbed (which was in fact paid pursuant to the PCSA). In this proceeding the representatives seek as terms of the constructive trust, among other things, ‘any benefit whether by way of payments or otherwise that the Crown
… has obtained from using the rights to the bed’. That is in essence a demand for an account for profits. I am in no doubt that this claim is materially the same as the Pouakani historical claim in Wai 33, referred to in Appendix 2 of the Tribunal report, which was settled by the PCSA. As a result this proceeding is statutorily barred.
(d) River Claims Exception
[42] Mr Millard seeks to avoid this consequence by relying on s 10(2), the provision reserving to the Pouakani people the right to pursue ‘any claim … to the Waikato River’. The term ‘Waikato River’ is not defined in the PCSA or the deed of settlement. Some support for Mr Millard’s argument might be found in Cooke P’s adoption in Te Runanganui o Te Ika Whenua Inc Society v Attorney-General [1994]
2 NZLR 20 (CA) at 27 of descriptions in two previous Tribunal reports of the concept of a river as being taonga – ‘a whole and indivisible entity, not separated into bed, banks and waters’. But determination of this question is one of statutory interpretation, requiring s 10(2) to be read consistently with and subject to the express exclusion found in s 10(1)(b)(iii). The two provisions are not necessarily
inconsistent and can sensibly be read together: Stewart v Grey County Council
[1978] 2 NZLR 577 (CA) per Richardson J at 583.
[43] Parliament’s intention is clear. The PCSA was to constitute a final settlement of all claims then notified and considered by the Tribunal in its 1993 report and of all future claims relating to that subject matter. Expressly included within the settlement was the Pouakani people’s claim for legal recognition of an interest in the riverbed and compensation for its loss. The same remedy is sought here, and its pursuit is contrary to the spirit and purpose of the PCSA.
[44] The effect of s 10(2) is, in my judgment, to preserve a right to the Pouakani people to bring a claim within the unique jurisdiction of the Tribunal for relief relating to the river other than for a compensatory or proprietary right for loss of the bed, providing that such a claim does not seek to raise questions settled by the PCSA: s 13. A claim of that nature was apparently contemplated by s 8(2)(a) Waikato Raupatu Claims Settlement Act 1995, which gave effect to provisions in a deed of settlement between the Crown and the Tainui people. A subsequent agreement in principle to settle historical claims by Tainui relating to the Waikato River focused on rectifying damage done to the river through pollution, lack of consultation afforded to the Tainui people and recognising and rectifying their separation from the river.
[45] Similarly, s 10(2) recognises the Pouakani people’s right to pursue a spiritual or non-proprietary claim against the Crown. To hold otherwise and allow this claim to proceed would neutralise or negate the Crown’s express release and discharge
‘from any obligations, liabilities, and duties in respect of [the Pouakani historical] claims’: s 12(1). I am satisfied that the Pouakani people’s claim is not justiciable by virtue of ss 10 and 12 PCSA.
[46] A contrary interpretation of s 10(2) would lead to an incongruous result. The pleaded basis of the representatives’ claim is that the Waikato River including the adjoining Pouakani land and the riverbed have deep spiritual and cultural meaning for them. The representatives broadly allege, on the applicable ‘but for’ test of causation, that the original owners would not have proceeded with the transactions if
the Crown had discharged its fiduciary obligations. The sales did proceed, however, and the representatives do not pursue the remedy of rescission (although among the proposed terms of the constructive trust are a prayer for return of the land). Mr Millard confirms that the Pouakani people’s representatives do not attack what he calls ‘the primary bargain’ : the sale of the ‘visible land’ between 1887 and 1892. He accepts that the PCSA precludes this right. The Native Land Court’s orders, in particular vesting Pouakani No 1 in the Crown, independently have that effect.
[47] Mr Millard’s submission that the representatives’ right remains to claim for loss of the riverbed appears misconceived. Any fiduciary duty owed by the Crown would attach to each block of the subject land as a whole. The consequences of its breach are indivisible. Either a sale of a block or blocks of land, which on Mr Millard’s argument included part of the riverbed based on the presumption of ad medium filum, can be rescinded or set aside for breach of a fiduciary duty; or, if not, the legal representatives of the original owners retain a right to damages for the loss of value and possibly an account for profits.
[48] The PCSA prohibits the Pouakani people from now asserting that the blocks of land were sold at an undervalue. It is thus artificial to argue that the statutory prohibition on further monetary claims is restricted to visible land when on Mr Millard’s argument the titles included part of the riverbed. I cannot follow how in these circumstances a fiduciary duty or more importantly a loss giving rise to a remedy following its breach attaches to a divisible part of an unchallenged or unchallengeable transaction. These conceptual difficulties suggest an attempt by the representatives to define the relationship by using the remedy of a constructive trust, and employing the fiduciary label to justify the result: LAC Minerals v International Corona Resources Ltd [1989] 2 SCR 574 per La Forest J at 652.
(2) Standing
[49] Second, Ms Aikman submits that the nominated plaintiffs have no right or standing to pursue this claim. She submits that they are not the legal representatives of the original owners of the land because they have failed to show that any or all of them have a legal right which has been infringed by the Crown.
[50] The four surviving plaintiffs are drawn from a group of eight appointed by the kaumatua representing the potential beneficiaries of the settlement of Pouakani claims. A formal deed of mandate dated 14 October 1997, which the Crown recognised for the purpose of entering into the deed of settlement on 19 November
1999, records their appointment. The deed of mandate identified the claims for which the Pouakani people sought a remedy, including:
2 Waikato River
The Waikato River forms part of the boundary of the Pouakani block. This section of river was non navigable prior to construction of hydro electricity dams.
The boundary of Pouakani is and was the centre of the river. Our share of the riverbed has not been acquired by the Crown and still belongs to the Pouakani people.
Our people were not consulted prior to the construction of four hydro dams that now flood areas of spiritual significance to our people.
…
5 Associated Disputes
It is our wish to achieve settlement of all grievances and disputes relating to the Pouakani land.
[51] The Pouakani Claims Trust was formed on 10 March 1998:
… to administer the funds and the costs associated with the negotiations to settle the claim and to distribute the proceeds of any final settlement amongst the appropriate beneficiaries.
[52] The surviving plaintiffs together with three others including Mr Paki were appointed as trustees. The same seven signed the deed of settlement with the Crown
‘as trustees of the Pouakani Claims Trust as the mandated representatives of the Pouakani people’. Two of those trustees as well as Mr Paki have since died. The four surviving plaintiffs are nominated in this proceeding as the mandated representatives of the Pouakani people recognised under the PCSA’s provisions.
[53] Mr Millard relies on both the deed of mandate and a representation order made in this Court on 2 April 2007 under R78 High Court Rules. He says either or both establish standing to bring this claim. The order permitted the current plaintiffs
to sue ‘on behalf of all persons who claim an interest as descendants of the owners of the [relevant] blocks’. Mr Millard says:
As this is a right to property and is based on the conscience of the trustee, this right should pass down to the descendants of the vendors – ie the persons in respect of whom the representation order was made.
[54] I disagree with Mr Millard. The earlier summary of the history of the ascertainment of title to the Pouakani blocks shows that the Native Land Court heard claims by individual Mäori to various blocks. It recognised a number of different owners: 192 owners in Pouakani No 1, 242 owners for Pouakani B6, one owner for C3, six for B8 and 20 for B10.
[55] While some or all of the four surviving plaintiffs may have been related to some of those owners, there is no general right in descendants to bring a claim. On the death of any person all causes of action vested in him or her survive for the benefit of the estate; proceedings to enforce this surviving right can only be brought by the dead person’s legal representatives: s 3(1) Law Reform Act 1936; s 2
Administration Act 1969; s 2(1) Trustee Act 1956; R77 High Court Rules. The plaintiffs may be the nominated representatives of the Pouakani people. But they have not attempted to prove that they are the legal representatives of the original owners.
[56] The deed of mandate does not confer an independent legal right to bring this claim. At best it is, as Ms Aikman submits, an appointment by the Pouakani people of representatives to negotiate a settlement of their claims against the Crown. The grantors of the mandate are the descendants but not the legal representatives of the original owners.
[57] And a representation order under R78 cannot confer status to bring a claim where a right does not exist independently. A representation order is designed to facilitate efficiency and minimise duplication of litigation among plaintiffs who already enjoy a right to bring a claim; it is a ‘flexible tool of convenience in the administration of justice’: John v Rees [1970] 1 Ch 345. The order recognises a representative right to claim for a common interest and common grievance where the relief sought will be of itself beneficial to all whom the representative plaintiff
proposes to represent: Bedford v Ellis [1901] AC 1, and presumes but does not confer a lawful entitlement to bring a claim.
[58] I think the proceeding must fail on this basis also. I might add, though, that any injustice or unfairness thought to arise from this conclusion is mitigated by the wider jurisdiction assumed by the Waitangi Tribunal, provided that the claim is not otherwise statute or time barred.
(3) Navigable River
(a) CMAAA
[59] Third, the Crown contends that the Pouakani people have failed to establish that the Waikato River was not ‘a navigable river’ in 1903.
[60] Section 14 CMAAA materially provides:
(1)Save where the bed of a navigable river is or has been granted by the Crown, the bed of such river shall remain and shall be deemed to have always been vested in the Crown, and, without limiting in any way the rights of the Crown thereto, all minerals, including coal, within such bed shall be the absolute property of the Crown.
(2)For the purpose of this section – ‘bed’ means the space of land which waters of the river cover at its fullest flow without overflowing its banks; ‘navigable river’ means a river continuously or periodically of sufficient width and depth to be susceptible of actual or future beneficial use to the residents, actual or future, on its banks, or for the public for the purposes of navigation by boats, barges, punts or rafts.
[61] Section 206 Coal Mines Act 1925 amended the definition of ‘navigable river’
to read:
… a river of sufficient width and depth (whether at or at all times so or not)
to be used for the purpose of navigation by boats, barges, punts or rafts.
The same definition was re-enacted as s 261 Coal Mines Act 1979, and its effect is preserved by s 351 Resource Management Act 1991.
[62] Counsel are agreed that the meaning of the phrase is to be determined by reference to the 1903 Act. That was the statute by which the bed of the Waikato River was ‘deemed to have always been vested in the Crown’. This deeming provision applied absolutely and retrospectively to and at the time of the Crown’s acquisition of the Pouakani land between 1887 and 1892. The 1925 amendment of the 1903 Act did not affect the river’s pre-existing status: s 17(1) Interpretation Act
1999.
(b) Ad Medium Filum
[63] The claim by the Pouakani people’s representatives is centred on the application of the principle of usque ad medium filum aquae; that is, the presumption of English common law, rebuttable by evidence of ownership to the contrary, that the boundaries of land on either side of a non-tidal river extended to its mid point. The representatives say that, by virtue of this presumption, the original owners had title to the medium point of the riverbed for its length abutting their land at the time of the sales. The Crown counters that, by virtue of s 14, it owns and has always owned the riverbed regardless of any question of legal or customary title: see Attorney-General v Ngati Apa [2003] 3 NZLR 643 (CA) per Keith and Anderson JJ at [161].
[64] The English common law treated a navigable tidal river as an extension or arm of the sea to its highest tidal point. A tidal river was in law navigable and the presumption of ad medium filum did not apply to the benefit of riparian owners, at least in the area of tidal ebb and flow. The riverbed was deemed to belong to the monarch and was available for all of his or her subjects to fish. But, where the presumption did apply, those who used the river would trespass on the land of the riparian owner. This was the state of the common law of New Zealand when the Court of Appeal delivered its decision in Mueller v Taupiri Coal-mines Ltd (1900)
20 NZLR 89 (CA) on 2 December 1900: see R v Joyce (1906) 25 NZLR 78 (CA) per
Williams J at 89-92.
[65] In Mueller the Crown had earlier granted land to Taupiri Coal-mines at
Huntly adjacent to and on both sides of the Waikato River. The terms of the grant
described the riverbank as the boundary and nominated an acreage which was confined to the land area. The company removed large quantities of coal by tunnelling under the riverbed. The Crown sought a declaration that the bed was vested in it together with an injunction and an account. The company relied on the principle of ad medium filum to argue its right to the land forming the riverbed and the minerals below.
[66] The Court of Appeal found for the Crown by a majority, Sir Robert Stout CJ delivering a strong dissent. All members of the majority considered the navigability of the Waikato as critical to determining the Crown’s intention when entering into the grants. The extrinsic evidence satisfied them that the Crown had rebutted the presumption that it intended to part with ownership of the riverbed: see Williams J at
109.
[67] Policy considerations clearly influenced the majority in Mueller. The river had been a busy public highway to Cambridge when the grants were made to the company (the subsequent construction of a railway in 1886 had destroyed most of the traffic but steamers still plied that part of the river): see Williams J at 107-112; Edwards J at 117-122; Martin J at 125-126. If the Court found that the principle of ad medium filum applied, the company may have been entitled to interfere with or obstruct public access: see Edwards J at 117. As Mr Damen Ward, who argued this part of the Crown’s case, submitted, the majority’s approach reflected New Zealand’s geographical character and the importance of river transport to the colony’s infrastructure and economic development: see also Joyce per Williams J at
89-90.
[68] The Parliamentary Debates are silent about the 1903 enactment, but it can be properly inferred that it was driven by two factors arising from the decision in Mueller. One was to secure beyond argument public rights of navigation of New Zealand rivers, which still served a function analogous to a public highway. The other was to preserve for the Crown ownership of and the entitlement to any minerals found in riverbeds: see Attorney-General ex rel Hutt River Board v Leighton [1955] NZLR 750 (CA) per Fair J at 771-772.
[69] As Mr Ward notes, the Water-Power Act 1903, giving the Crown powers over the use of water for electricity generation, came into force contemporaneously with the CMAAA. The Waitangi Tribunal in ‘He Maunga Rongo: Report on Central North Island Claims – Stage One’ Wai 1200: Part V 2007 at 104 summarised the Crown’s hydroelectricity plans at that time. Within a year of enacting s 14 CMAAA, the Crown had commissioned an expert’s report ‘examining some of the most likely sources of power’: at 104. The expert’s survey identified the Waikato River as a key source. Dams were mooted in the river’s upper reaches, not far from the Lake Taupö outlet. It can be inferred that s 14 CMAAA and the Water- Power Act were introduced as the twin components of a legislative package designed to secure ownership for the Crown of resources critical to the colony’s economic development.
(c) Pouakani Case
[70] Mr Millard advances two alternative but related arguments for determining whether in 1903 the Waikato River was a navigable river within the meaning of s 14
CMAAA. Both are variants on the same theme – that the question is to be approached by considering divisible parts or a part of the river in isolation. Mr Ward submits, to the contrary, that the character of the river as a whole is decisive.
(i) Divisibility Test
[71] Mr Millard’s primary proposition is that the test of navigability requires a progressive assessment of the river from its mouth, moving upstream to the point where continuous navigability ceases and with it the operation of s 14. He draws the line of navigability at Cambridge, emphasising the evidence of physical obstacles upstream and the absence of evidence of any public use in that region in or before
1903.
[72] I do not accept Mr Millard’s proposition of divisibility. In my judgment the reference in s 14(2) to ‘a navigable river’ describes its status or characteristics as a whole. This is reinforced by the earlier reference in s 14(1) to ‘the bed of such
river’. Similarly the reference to ‘the bed’ in s 14(2). A river is either navigable or not, and its bed either belongs to the Crown or not. It is not defined as ‘a navigable river in whole or in part’ or ‘a navigable river to the point where it meets an obstacle to navigation’.
[73] The legislature’s apparent intention in 1903 was that a river’s navigability would be determined as a unit or thing, not by its component parts. And as a matter of policy it seems unlikely that Parliament intended to allow later contested factual inquiries about whether part and, if so, what part of a river was not navigable. I agree with Mr Ward that a construction which allowed for a patchwork of private ad medium filum and public ownership along the Waikato River would defeat the purpose and policy of s 14.
[74] Mr Ward cites the Canadian decision in R v Nikal [1996] 1 SCR 1013 as authority that navigability is a characteristic of a river as a whole. At issue was the common law meaning of a navigable river in the context of determining whether or not native Indians were entitled to fish in a river without a licence. The river was punctuated by various falls and rapids, necessitating frequent portages between stretches. The Supreme Court approved authority at lower appellate level that a natural interruption of navigation in a river which is in general character navigable does not change that characteristic at the point of interruption or elsewhere: at 1050-
1051. Mr Millard says the decision in Nikal was delivered in a different geographical, demographic and commercial context. However, in my judgment the Supreme Court’s approach to the concept of navigability remains compelling and instructive in determining the meaning of a navigable river under s 14 CMAAA.
[75] It should not be forgotten that s 14 is directed towards ownership of the bed, not of the river itself. The bed is defined as ‘… the space of land which waters of the river cover at its fullest flow without overflowing its banks’. Again this phrase suggests a focus on the river as an indivisible entity and not on its divided or component parts.
[76] Mr Millard separately submits that the words ‘continuously or periodically’
in s 14(2) support his divisibility test. He submits that they describe only the rise
and fall of tidal rivers, and do not permit interruptions to continuous navigation from a river’s mouth to its source.
[77] I do not think this statutory construction is tenable. The adverbs
‘continuously or periodically’ convey a temporal meaning. I agree with Mr Ward that the words refer to the volume of water in the river at a particular time. The phrase seems designed to accommodate the observations by Williams and Martin JJ in Mueller, at 107 and 125 respectively, that parts of the river between Tuakau and Huntly which were otherwise navigable were temporarily rendered unnavigable either by shifting the sand banks or by hot weather. The phrase would also accommodate the effect of periodical tidal changes within a short span of the lower reaches of the Waikato River.
[78] Furthermore, the words ‘continuously or periodically’ relate to the river’s susceptibility of use ‘to the residents, actual or future’ on its banks – or for the public. The provision identifies two distinct categories of user. The residents are expressly singled out from the public of which they arguably form a part. I think this identification is deliberate and consistent with New Zealand’s demographic structure and the rural nature of its society and economy when s 14 CMAAA was enacted.
[79] By 1903, cities, towns and villages had grown up along the banks of the major North Island rivers : the Waikato, Wanganui and Rangitikei. Many Päkehä farmers and Mäori lived on or near the banks in rural or semi-rural areas. The river was a principal means of transport for them, both personally and for moving goods from one point to another but not necessarily of the whole river. Their use was sporadic or intermittent, and often confined to localised areas. But that factor whether actual or future appears sufficient to constitute as navigable the river on the banks of which they resided. It was immaterial to the susceptibility of their actual or future beneficial use that the river was not continuously navigable from end to end.
(ii) Segmented Test
[80] Mr Millard’s second and related proposition is that navigability needs to be examined on a segmented basis (noting that that was how the Crown had pleaded its
defence as recently as one week before trial), focusing on the section of the river abutting the Pouakani land. He submits that this approach would be consistent with the pre-1903 law which looked only at the navigable point. He says the type of use has to be significant in volume and type over a significant distance of the relevant stretch (that is, abutting the Pouakani land), and in the manner of use of a public highway. The concept of a particular segment of the river being used as a public highway is consistent, he says, with the purpose of the amendment and with the concepts of ‘beneficial use’ and ‘use for the purposes of navigation’.
[81] Mr Millard relies for this proposition on St Francis Hydro Electric Co Ltd v King [1937] 2 All ER 541. The Privy Council dismissed an appeal from an appellate Court in Quebec on the grounds that the two Courts below made concurrent factual findings that the hydro company did not own the bed of a river opposite their property. While factual findings were apparently based upon whether the St Francis River was navigable at that particular point, the Privy Council’s decision does not stand for any statement of principle.
[82] Mr Millard also cites Earl of Ilchester v Raishleigh (1889) 61 LT 477. In that case, in a judgment which with respect is not easy to follow, Kekewich J referred to a distinction between the popular meaning of the word ‘navigable’ and its technical meaning of the ebb and flow of the tide before finding, as a matter of fact, that the Fleet River was not navigable because there was no diurnal ebb and flow. The decision does not assist here.
[83] I reject Mr Millard’s segmented proposition, largely for the reasons already given. It is essentially a variant of his primary argument, which I have rejected, that navigability is a characteristic of a section of the river, whether continuously from the mouth to a particular point or within a section. Mr Millard’s submission that the common law looked only at the navigable point of a river before s 14 CMAAA was enacted misconstrues the decision in Mueller. And while the concept of a public highway was relevant at common law, it does not determine the construction arising on the plain words of s 14.
[84] I acknowledge Mr Millard’s argument that s 14 CMAAA, to the extent that it might exclude the ad medium filum presumption, is confiscatory and should be given a narrow or restrictive interpretation: Leighton per Fair J at 768-771. He emphasises that its effect was to take away Mäori customary rights which by definition must have pre-dated any Crown grant in circumstances where s 14 CMAAA provides for no compensation. Also, he says, the section is contrary to Article 2 of the Treaty of Waitangi and its guarantees of continued Mäori ownership of their lands; and that, since the Treaty was designed to have general application, its terms must colour interpretation of all statutes to which it has relevance: Barton-Prescott v Director- General of Social Welfare [1997] 3 NZLR 179 at 184, approved in New Zealand Mäori Council v Attorney-General [2008] 1 NZLR 318 (CA) at [74].
[85] These factors may have been relevant if s 14 gave rise to an ambiguity in interpretation. I am satisfied, though, that its terms are unequivocal in displacing Mr Millard’s construction. Although found in an obscure statutory enactment unaccompanied by any record of parliamentary debate, I think that s 14 was designed to have a radical effect on property rights in the national interest. Subsequent enactments have varied the wording but not the purpose or intent of s 14.
[86] In summary, I am satisfied that determination of the meaning of the phrase
‘navigable river’ in s 14 CMAAA requires a factual inquiry into whether the river as a whole is navigable. Its general characteristic is decisive and does not allow for Mr Millard’s piecemeal approach: navigability is not to be assessed either according to a moving scale from the mouth of the river to the point where continuous navigability actually ceases or by reference above that point to a segment defined by its abutment to the riparian land in question.
[87] The terms of the statutory definition found in s 14 CMAAA are unique to
New Zealand, and do not attempt to replicate existing common law. The word
‘navigation’ in this context means, in my judgment, the carriage by water transport of people or goods from one point to another. A ‘navigable river’ is one capable of navigation. While its common law meaning of a public highway is preserved by the express reference to public use, the meaning of ‘navigable river’ is significantly extended relevantly to this case.
(d) Factual Inquiry
[88] The question whether or not a river is navigable within the meaning of s 14
CMAAA is one of mixed law and fact: Leighton at 769. The factual inquiry in this case is uniquely retrospective and its inherent problems are compounded by the changes to the riverbed gradient, boundaries, and flow of the river’s upper reaches caused by the Crown’s construction of a series of hydro electricity dams since 1949.
[89] In summary, the river divides physically into two distinct parts. The upper reaches from the outlet down to Cambridge comprise the greater part of 124 miles. In profile this section drops sharply but gradually to a point near sea level. Navigation in this area has always been problematic and sporadic. The lower part below Cambridge, the lesser area of about 80 miles, is relatively flat and easily navigated whether by motor, steam or small craft. Mr Millard accepts on the authority of Mueller that this section of the river was continuously navigable from its mouth.
[90] However, Mr Millard says that the Court in Mueller implicitly acknowledged that the river was not navigable beyond Cambridge. I do not read the judgments in that way. All the Judges noted that the stretch from the mouth to Cambridge had been used by conventional forms of European or Päkehä water transport including larger vessels like steamers before 1900. The river’s profile explains why conventional craft did not go continuously further.
[91] I accept, though, that the fact of navigability to Cambridge or for 40% of the river’s length is not decisive of whether the river as a whole was legally navigable. A factual inquiry into the navigability of the upper reaches is necessary.
[92] Counsel relied principally on contemporaneous documents supplemented by expert evidence. The Pouakani people called Mr Bruce Stirling, a historian with expertise in archival research at the Mäori Land Court, Mr Mark Dyer, a surveyor, and Mr Tamati Cairns, a highly qualified and respected kaumatua of the Pouakani people. The Crown called Mr James Parker, a historical researcher employed by the Crown Law Office with expertise in archival research, and Dr Donald Loveridge, a
historian. Their evidence relating to the physical state and use of the river above
Cambridge was detailed and comprehensive.
[93] Messrs Stirling and Parker subjected discrete areas of the Waikato River above Cambridge to detailed analysis. The areas were segmented largely by reference to boundaries imposed by physical obstructions presented by major rapids, gorges, and junctions with tributaries. Mr Parker, in a 73-page brief, subdivided 14 continuous areas within the 124 mile stretch from Lake Taupö outlet down to Cambridge. Mr Stirling focused more on the segment directly abutting the Pouakani lands. Both reviewed evidence of actual use.
[94] On this evidence Mr Millard advances three propositions:
(1)The river section from Taupö downstream to Cambridge was simply not used in 1903 for transport or voyages as a unit, even with portage. It is against common usage and common sense to say that the whole river is navigable if it is not used for continuous navigation (in the sense of connected trips) and is instead the subject of sporadic and totally unconnected usage;
(2)There were 10 major obstructions from Taupö to Maraetai occurring at regular intervals. From Maraetai to Awapuni there would have been a gorge, then the rapids at Horahora and below the Maungatautari bridge there were at least another three obstacles. Some of the distances between these obstructions are significant;
(3)While there was occasional use of parts of the river between these many obstructions, it was for the most part spasmodic and minor. Viewed objectively, the river was not navigable upstream from Cambridge.
[95] It would extend what must be a regrettably lengthy judgment to unreadable lengths by replicating or dissecting evidence about details of each relevant area. And that course is unnecessary in any event because Mr Millard’s argument, as
summarised above, is based upon acceptance and adoption of Mr Parker’s careful identification of major points of obstruction. Mr Millard’s thesis, based upon that evidence, is that the existence of the obstructions, principally rapids and gorges, illustrates that the river as a whole was not susceptible of use for continuous navigation.
[96] Mr Parker’s findings of use in 1903 based on the available evidence are as follows:
(1)The river was used for water transport for much of the section between Lake Taupö and the Mihi Bridge, 31.2 miles downstream. The two major rapids in that section, the Huka Falls and Aratiatia, would require portage to successfully continue passage beyond them, which was factually possible. Parts of this area above the Huka Falls were used regularly by Päkehä for recreational fishing from canoes or boats. Also Mäori and Päkehä used the section below Aratiatia both for fishing and to transport goods. One account by a Päkehä in 1885 refers to 40 Mäori in a single canoe paddling up a stretch of rapids;
(2)The river was used for water transport from the Mihi Bridge down to the vicinity of what is now the Whakamaru Power Station, 69 miles downstream from Lake Taupö, at the upstream end of the Pouakani land. A number of major rapids were located in this area. As early as
1839 a Päkehä travelled parts of this water by canoe, and encountered Mäori who were using it for traditional purposes of catching fish and birds;
(3)The river was little used in the next section including most of the Whakamaru gorge and all of the Maraetai gorge, 82.4 miles downstream from Lake Taupö, at the downstream end of the Pouakani land. It would have been difficult but not necessarily impossible to portage between each of the small stretches of river within this section which could be used for water transport;
A constructive trust arises by operation of law whenever the circumstances are such that it would be unconscionable for the owner of property (usually but not necessarily the legal estate) to assert his own beneficial interest in the property and deny the beneficial interest of another. In the first class of case, however, the constructive trustee really is a trustee. He does not receive the trust property in his own right but by a transaction by which both parties intend to create a trust from the outset and which is not impugned by the plaintiff. His possession of the property is coloured from the first by the trust and confidence by means of which he obtained it, and his subsequent appropriation of the property to his own use is a breach of that trust…
[172] Mr Millard seeks to bring the Pouakani people within the first category of an institutional trust. He says there was a relationship of trustee and beneficiary in existence before and independently of these transactions. He does not point to any factor or factors to justify this argument. Dickson J in Guerin is directly to the contrary. He held that, while the fiduciary relationship found to exist between the Crown and the tribe had analogies with trust law, the relationship was not that of trustee and beneficiary. Furthermore, the interest which crystallised a fiduciary obligation upon the Crown in Guerin did not arise until surrender of the land: at 385.
[173] Mr Millard’s argument also contradicts the representatives’ statement of claim and evidence. They allege, consistently with Guerin, that the fiduciary duty arose out of the transactions. What they seek in reality is a remedial constructive trust which, as Millett LJ points out in Paragon, is not really a trust at all but ‘merely a remedial mechanism by which equity gave relief for fraud’: at 409.
[174] Alternatively, Mr Millard submits that the limitation period does not apply because the Crown is in breach of its ongoing fiduciary obligations: see FAI (NZ) General Insurance v Blundell and Brown Ltd [1994] 1 NZLR 11 (CA) at 16. He says that the Crown is under a continuing duty to rectify. I agree with Mr Beck. All other things apart, rectification is now impossible given the Crown’s alienation of some of the lands and the duties imposed by the Public Works Act; in any event, the representatives of the Pouakani people do not seek to rectify the breach by setting aside the transactions. This claim is time barred.
Laches and Acquiescence
[175] The Crown’s final line of defence is that the representatives of the Pouakani people are guilty of acquiescence or laches. It relies on much of the same ground as its defences to impositions of a remedial constructive trust and limitation. Even if the limitation defence does not apply, the Crown argues that the doctrine of laches applies to bar an equitable claim not brought within a reasonable time where it would be unreasonable or unconscionable to permit a plaintiff to enforce its rights: Eastern Services Ltd v No 68 Ltd [2006] 3 NZLR 335 (SC).
[176] I agree with Mr Beck. The representatives’ delay in bringing this proceeding is extreme and renders the claim unconscionable. As already noted, if Mr Millard is correct that a fiduciary relationship existed, the Crown carries the burden of proving informed consent to the relevant transactions. I repeat that it would be self-evidently impossible for the Crown to discharge this burden over 100 years after the limitation period had expired. The Crown has lost access to all relevant witnesses and possibly to material documents.
[177] I am satisfied that the representatives of the Pouakani people can be said to have acquiesced in the extraordinary period of delay, and the doctrine of laches applies to them.
Decision
[178] The claim brought by the representatives of the Pouakani people fails on each of these grounds:
(1) The claim is not justiciable by virtue of the PCSA; (2) The representatives lack standing to bring this claim;
(3)The Waikato River was a navigable river in 1903 within the meaning of s 14 CMAAA;
(4)The Crown did not owe the Pouakani people a fiduciary duty when acquiring the land between 1887 and 1892;
(5)Relief by way of a declaration of a constructive trust is now unavailable to the Pouakani people;
(6) The representatives’ claim is time-barred.
[179] Judgment is entered for the Crown against the plaintiffs. Costs normally follow the event. I trust, though, in this case the parties are able to agree. If not, the Crown is to file a memorandum (of no more than 10 pages in length) in support of an application by 20 August 2008. The representatives are to respond in the same manner by 10 September 2008.
[180] I wish to conclude by expressing my gratitude to all counsel for the quality of their argument, both written and oral. This case raised difficult and novel legal
issues which were argued with great skill and insight by both sides.
Rhys Harrison J
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