Stafford v Attorney-General
[2018] NZCA 490
•12 November 2018 at 2.15 pm
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA240/2018 [2018] NZCA 490 |
| BETWEEN | RORE PAT STAFFORD |
| AND | ATTORNEY-GENERAL |
| Court: | Winkelmann and Clifford JJ |
Counsel: | K S Feint and M S Smith for Applicant |
Judgment: | 12 November 2018 at 2.15 pm |
JUDGMENT OF THE COURT
AThe application for the proceedings in CIV-2018-485-341 to be transferred to this Court and heard with the appeal in CA125/2018 is declined.
BThere is no order for costs.
____________________________________________________________________
REASONS OF THE COURT
(Given by Clifford J)
Introduction
This is an application by Mr Stafford, pursuant to s 59 of the Senior Courts Act 2016, to transfer judicial review and declaratory judgment proceedings (the Judicial Review proceedings) commenced in the High Court on 10 May 2018 to this Court.
Background
The background to this application is complex. It is found in the decision of the Supreme Court in Proprietors of Wakatū v Attorney-General,[1] and in the various steps Mr Stafford has taken since that decision to protect the benefit of the fiduciary duties the Supreme Court found the Crown owed to Māori.
[1]Proprietors of Wakatū v Attorney-General [2017] NZSC 17, [2017] 1 NZLR 423.
In Wakatū, the Supreme Court found that the Crown owed fiduciary duties to reserve 15,100 acres of land (“the Nelson Tenths”) for the benefit of the Māori customary owners of Nelson from a grant of land to the New Zealand Company known as the Spain award. The Supreme Court remitted Mr Stafford’s claim (the Fiduciary Duty claim) to the High Court for determination of liability, loss and remedy.
Following the Supreme Court decision in Wakatū Mr Stafford, supported by the Wakatū Incorporation, has taken various steps to identify and protect “Crown land” in the Nelson area as a source of possible redress in the future. As part of that, certain arrangements have been agreed on a without prejudice basis between Mr Stafford and the Crown involving what is described as “early warning system” as regards the possible disposal of “core” Crown land. In Mr Stafford’s view, that arrangement is insufficient, given the Supreme Court’s finding of fiduciary duties.
More specifically, Mr Stafford registered a caveat against certain land in Nelson owned by the Accident Compensation Corporation (the ACC property). He did so because, at the time, ACC had entered into a contract to sell that land. Mr Stafford’s caveat recorded that he had a beneficial interest in the ACC property because ACC “is subject to a sufficient degree of ministerial control that it comprises an instrument of executive government and as such [ACC] constitutes the Crown for the purposes of the beneficial interest the Caveator claims in the land”. The caveat was subsequently registered by Mr Stafford.
A removal application came before the High Court in February this year, with judgment on 22 February.[2]
[2]Accident Compensation Corporation v Stafford [2018] NZHC 218, [2018] 2 NZLR 861.
The High Court first found that it was arguable the ACC property could be used to settle possible Crown liabilities arising from the Crown’s failure to reserve the Nelson Tenths. In doing so, Collins J reasoned, with reference to the decision of the Supreme Court in Ririnui v Landcorp Farming Ltd[3] and various provisions of the Crown Entities Act 2004, that it was reasonably arguable the responsible Minister could issue a direction to ACC forbidding the sale of any land held by ACC that was the subject of a claim by Māori on the basis that such lands may be used by the Crown to settle such claims.[4] Alternatively, a similar direction might be able to be given under s 107(1)(e) of the Crown Entities Act.[5]
[3]Ririnui v Landcorp Farming Ltd [2016] NZSC 62, [2016] 1 NZLR 1056.
[4]Accident Compensation Corporation v Stafford, above n 2.
[5]At [82].
Collins J then found, however, Mr Stafford could not maintain a caveatable interest in that land because — everything else aside — it could not be said he derived any interest in that land from ACC.[6]
[6]At [94].
Notwithstanding that finding, Collins J stayed the effect of his decision to remove Mr Stafford’s caveat. In doing so he explained:
[97] I do not, however, wish to see Mr Stafford and his supporters deprived of an opportunity to persuade the Minister or Ministers to issue a direction or directions of the kind I have described in [82], which may ultimately result in a solution that achieves for Mr Stafford everything that he is endeavouring to achieve through his caveat. To achieve this possible outcome, I will exercise the discretion conferred by s 143 of the Land Transfer Act and keep in force Mr Stafford’s caveat over the ACC property until 22 March 2018. Although this creates a very tight timeframe for the Minister or Ministers to make a decision, it would be preferable if this aspect of Mr Stafford’s dispute were able to be resolved through Ministers exercising their statutory powers.
Mr Stafford has appealed Collins J’s caveat decision (the Caveat Appeal). Mr Stafford has also endeavoured to persuade the Government to issue directions of the kind described by Collins J at [82] of his judgment. Those actions led to the filing of the Judicial Review proceedings discussed below.
The Caveat Appeal
Mr Stafford filed the Caveat Appeal in this Court on 12 March 2018. Mr Stafford’s grounds of appeal are:
1.The Judge erred in fact and in law in finding that there was no reasonably arguable case that the appellant has a caveatable interest in [the ACC property].
2.It is reasonably arguable that:
2.1All Crown land within the Spain award area is, to the extent of the shortfall in the 15,100 acres resulting from the Crown’s breach of its fiduciary duties, held subject to the equitable interests of the Māori customary owners represented by the appellant; and
2.2As the respondent is an instrument of executive government, being a “Crown agent” subject to ministerial control pursuant to the Crown Entities Act 2004, [the ACC property] is Crown land for the purposes of the fiduciary duty proceeding, and accordingly, the appellant has equitable interests in relation to the entire property.
By way of relief, Mr Stafford seeks an order from this Court that the caveat is to remain on the title to the ACC property pending the final determination of the Fiduciary Duty claim.
ACC has cross-appealed on a range of grounds. In summary, it says the Judge erred in determining it was reasonably arguable responsible Ministers could issue directions of the kind envisaged by the Judge at [82] of his judgment. The Judge also erred in exercising the residual discretion to keep the caveat in force, again because it was not reasonably arguable that the Ministers could issue the directions envisaged. ACC will also support Collins J’s judgment on different grounds. In essence, ACC is a separate legal entity from the Crown and it would be wrong to find that third parties, such as Mr Stafford, were entitled to satisfy private law claims against the Crown by having access to property owned by ACC. Moreover, that part of the ACC property that had originally been set aside as part of the Nelson Tenths had subsequently been transferred by the Public Trustee. There had been no claim of any breach of duty as regards that land. The balance of the ACC property had never been part of the Nelson Tenths, and there was no reasonable basis for arguing the Crown had breached any duty in relation to that land.
In the meantime, Collins J has issued a stay of his caveat decision, pending the determination of Mr Stafford’s Caveat Appeal.[7] For its part, ACC sought an urgent hearing of that appeal. In a minute of 25 June, Cooper J directed that the question of urgency should be addressed after the application to transfer the Judicial Review proceedings from the High Court to this Court had been determined.
The Judicial Review proceedings
[7]Accident Compensation Corporation v Stafford [2018] NZHC 488.
As part of his efforts to persuade the Government to issue directions, Mr Stafford first wrote to the Attorney-General on 23 February 2018. He asked the Attorney-General to help in having the responsible Minister make the declarations envisaged by Collins J.
On 1 March 2018, the Attorney-General expressed the preliminary view that there was no power for such directions. Even if there was, he considered it would not be appropriate to exercise that power to require ACC to breach a contract it had entered into with a third party who had dealt with ACC in good faith.
On 9 March, Mr Stafford’s solicitors wrote again to the Attorney‑General, repeating the request for directions and asking for a moratorium on land disposal by the Crown, Crown agents and state-owned enterprises within the Spain award area, pending the resolution of the Fiduciary Duty claim.
The Minister replied on 29 March. He noted that as the agreement for the sale of the ACC property had been cancelled, that matter no longer required his attention. On the more general proposal of a moratorium, he indicated the request was under consideration and that he would reply as soon as he was able.
On 18 April, Mr Stafford’s solicitors wrote to the Attorney-General advising him that, if a substantive response was not received by 27 April, Mr Stafford’s assumption would be that the Crown’s position was it had no power to make the directions sought to give effect to the requested moratorium. Mr Stafford would then have no option but to seek urgent declarations from the High Court challenging that position on the ground that it is erroneous in law.
On 27 April, the Attorney-General responded. He said no such assumption might be made. The Crown did not yet have a position on the issue. As soon as the Crown did, the Attorney-General would be in touch.
On 10 May, Mr Stafford commenced proceedings in the High Court, seeking judicial review of the Attorney-General’s decision recorded in the letter of 27 April (the reviewable decision). As relevant Mr Stafford pleaded:
38.The reviewable decision involved a failure to exercise a statutory power or statutory power of decision in terms of the Judicial Review Procedure Act 2016; (further or in the alternative) a failure to exercise public power amendable to judicial review under Part 30 of the High Court Rules; or (further or in the alternative) a failure to exercise public power amendable to judicial review under the Common Law.
Grounds for judicial review and/or declaratory judgments.
39. The reviewable decision is erroneous in law. In particular:
39.1The Attorney-General as representative of the Crown (as fiduciary) has a legal power to make directions to prevent the disposal of any land within the Spain award area that is held today by the ‘core’ Crown (being Her Majesty the Queen and the central government ministries and departments listed in Schedule 1 of the State Sector Act 1988), Crown agents (being the Crown agents listed in Part 1 of Schedule 1 of the Crown Entities Act, and including ACC) and SOEs (being the State enterprises listed in Schedule 1 of the State-Owned Enterprises Act 1986), and extending to the ACC property, pending resolution of the fiduciary duty proceeding (“the power”). The power is sourced in:
(a)Section 103 of the Crown Entities Act;
(b)Section 107 of the Crown Entities Act;
(c)The principles of the Treaty of Waitangi, and the duty of active protection that is consequent upon the Crown’s Article II guarantee; and/or
(d)The Crown’s residual (or ‘third source’) freedom to act with the powers of the natural persons;
39.2 In light of the decision of the Supreme Court in the fiduciary duty proceeding, the Attorney-General as a representative of the Crown (as fiduciary) has a duty to exercise the power in a timely way (“the associated duty”); and
39.3The associated duty has been breached by the Attorney‑General in his failure to exercise the power by 9 May 2018, being over 14 months after the Supreme Court’s decision was issued and two months after directions were first sought.
Declarations against the Attorney-General were sought accordingly.
A declaration was also sought that ACC should not dispose of the ACC property pending the resolution of the Fiduciary Duty proceedings, as was an injunction to prevent that happening.
The transfer application — analysis
On 14 May 2018 Mr Stafford applied to this Court to transfer the Judicial Review proceedings pursuant to s 59 of the Senior Courts Act.
Section 59 provides:
Transfer of civil proceeding from High Court to Court of Appeal
(1) A party to a civil proceeding in the High Court may apply for an order transferring the proceeding to the Court of Appeal.
(2) In determining whether to make an order transferring the proceeding, the Court of Appeal must be satisfied that the circumstances of the proceeding are exceptional.
(3) Without limiting subsection (2), the circumstances may be exceptional if—
(a) the party to the proceeding intends to submit that a relevant decision of the Court of Appeal should be overruled:
(b)the proceeding raises an issue of considerable public importance that—
(i) needs to be determined urgently; and
(ii) is unlikely to be determined urgently if the proceeding is heard and determined by both the High Court and the Court of Appeal:
(c) the proceeding does not raise a question of fact or a significant question of fact, but raises a question of law that is the subject of conflicting decisions of the Court of Appeal.
(4) In deciding whether to make an order transferring the proceeding, the Court of Appeal must have regard to the following matters:
(a) the primary purpose of the Court of Appeal as an appellate court:
(b) the desirability of obtaining a determination of the proceeding in the High Court and a review of that determination on appeal:
(c) whether a full court of the High Court could effectively determine the question in issue:
(d) whether the proceeding raises a question of fact or a significant question of fact:
(e) whether the parties have agreed to the transfer of the proceeding:
(f)any other matter to which regard should be had in the public interest.
(5) It is not a sufficient ground that the parties agree to the transfer.
(6) The Court of Appeal has the jurisdiction of the High Court to hear and determine a proceeding transferred under this section.
(7) The Court of Appeal may transfer back to the High Court a proceeding that has been transferred to the Court of Appeal.
The approach to applications for transfer under now s 59 is reasonably well established, and is reflected in the various statutory criteria. The circumstances of the proceeding must be exceptional. The circumstances may be exceptional if, as relevant here, the proceeding raises an issue of considerable public importance that needs to be determined urgently and is unlikely to be determined urgently if the proceeding is heard and determined by both the High Court and this Court. The Senior Courts Act also sets out a number of factors this Court must have regard to when considering an application for transfer.
At the beginning of its Wakatū judgment, the Supreme Court summarised the result of the case.[8] As relevant, that summary reads:
[1] In accordance with the opinion of the majority comprising Elias CJ, Glazebrook, Arnold and O’Regan JJ, Mr Stafford has succeeded on the principal point on which his claim failed in the High Court. The majority decision in this Court is that the Crown owed fiduciary duties to reserve 15,100 acres for the benefit of the customary owners and, in addition, to exclude their pa, urupa and cultivations from the land obtained by the Crown following the 1845 Spain award. The appeal is allowed on this point and Mr Stafford has been granted a declaration to that effect. Mr Stafford’s claim may therefore proceed in the High Court for determination of matters of breach and remedy.
…
[4] A majority, comprising Elias CJ, Glazebrook, Arnold and O’Regan JJ, has held that Mr Stafford’s claims are not barred by the Limitation Act 1950 to the extent that they are within the terms of s 21(1)(b) of the Act because they seek to recover from the Crown trust property either in the possession of the Crown or previously received by the Crown and converted to its use. Any other issues relating to limitation, including the availability of a limitation defence to any claim for equitable compensation, are remitted for consideration by the High Court. It will also be necessary for the High Court to determine, once the facts as to breach and possible prejudice have been found, whether the claims are barred in application of the equitable doctrine of laches.
…
[6] Findings of breach and as to the extent of any consequential losses were not made in the High Court or Court of Appeal. The Court is not able to make final determinations concerning liability, loss, and remedy in the absence of primary findings of fact in the lower courts and in the absence of full submissions on these matters, which were not the focus of the present appeal. While it is acknowledged by the Crown that 10,000 acres of the tenths reserves awarded by Spain were never reserved, the extent of loss to the suburban and town reserves is not clear. Nor is it clear to what extent the customary owners have been deprived of their occupied lands which should have been excluded from the Crown land obtained following the Spain award.
[7] Mr Stafford’s claim is remitted to the High Court for determination of remaining issues of liability, defence and relief, in accordance with the opinions of this Court.
[8]Wakatū, above n 1.
By any sense, the ongoing scope of the Fiduciary Duty claim is extensive, and of considerable novelty, complexity and public importance.
In the meantime, Mr Stafford in effect seeks interim relief.
He filed his caveat to preserve the status quo as regards the ACC property. In the Caveat Appeal he says it is reasonably arguable that all Crown land within the Spain award area is, to the extent of the shortfall from the Nelson Tenths resulting from the Crown’s breach of its fiduciary duties, held by the Crown subject to the equitable interests of the Māori customary owners to whom those duties are owed and whom he represents. He says further that as ACC is a Crown agent subject to ministerial control pursuant to the Crown Entities Act, the ACC property is Crown land for the purposes of the Fiduciary Duty claim and, accordingly, is held by ACC subject to those same equitable interests.
The Judicial Review proceedings were filed to determine the scope of the Crown’s powers to itself preserve the status quo pending the outcome of the Fiduciary Duty claim. They have a broader scope than the Caveat Appeal. They affect more land. Also, and as noted, they assert a broad legal power to make directions to prevent the disposal of land within the Spain award area that is held today by the Crown, such power being sourced in the Crown Entities Act, the principles of the Treaty of Waitangi and/or the Crown’s residual freedom to act with the powers of a natural person. It might be thought there can be little doubt that the Crown has the power to place a moratorium on the sale of Crown land, as that concept is traditionally understood, within that area. Accordingly, the “bite” of both sets of proceedings is as regards the broader category of Crown land that Mr Stafford asserts to be subject to the duties recognised by the Supreme Court in Wakatū, for which enforcement is now sought in the Fiduciary Duty claim in the High Court. That broader category particularly relates to land held by what may be called emanations of the Crown, such as ACC, that are not seen as part of the Crown, again as that term is traditionally understood.
There is a further important distinction between the two sets of proceedings. In order to succeed in the Caveat Appeal, Mr Stafford need only show his claim is reasonably arguable. In the Judicial Review proceedings he seeks to establish that the Minister does in fact have a power to direct.
Turning then to the statutory criteria, we are satisfied that the circumstances of the proceeding are exceptional. In that regard, the Supreme Court’s decision in Wakatū speaks for itself. It first and foremost involved the recognition of fiduciary duties binding the Crown which arose in 1845 and which, subject to the matters to be determined in the High Court proceedings, remain enforceable.
The ongoing proceedings in the High Court which the Supreme Court held were now necessary will themselves be exceptional. That a sufficient documentary and oral historic record exists in order to meaningfully undertake those proceedings may also be regarded as an exceptional circumstance.
As noted, the essential questions the Judicial Review proceedings raise are whether:
(a)the Crown has the power to direct that various categories of Crown entities are to put a hold on the disposal of land they own within the area of the Spain award; and
(b)if that power exists, whether the Crown has in the current circumstances a duty to exercise it.
All of that is aimed at the preservation in the hands of the Crown generally of land once owned under customary title by Māori in the area of the Spain award (and which could have formed part of the Nelson Tenths). That is, the reservation of land which was the subject of the Crown’s fiduciary duties.
That issue is one of considerable public importance: it goes to a proper understanding of the concept of the Crown in New Zealand in the early 21st century, and the significance of the passage of the State-Owned Enterprises Act 1986 and of various reforms to the structure of the public sector (including the passage of the Crown Entities Act).
But it is a separate question as to whether that is a matter which needs to be determined urgently. The Crown has not yet indicated a firm position on the nature or extent of any possible moratorium on sales of land within the area of the Spain award. It points to the difficulty and complexity of the issues involved. The terms on which the Supreme Court remitted the Fiduciary Duty claim to the High Court reflect the legal and, in this context more relevantly, the factual complexity of the issues involved. The Supreme Court itself identified the importance of the inquiry as to breach and consequential loss to be undertaken in the High Court as central to final determinations of liability and remedy. Those findings would, we assess, provide important context for the determination of the issues raised by the Judicial Review proceedings. Moreover, the Fiduciary Duty claim involves complex and important issues that, in our view, will benefit from initial consideration in the High Court and the availability of two levels of appeal, and the refinement of issues that occurs in that process.
The issues raised by Mr Stafford’s Judicial Review proceedings are considerably broader than those raised by the Caveat Appeal. The narrow ground on which Collins J made the decision challenged in the Caveat Appeal appears sound. Moreover, given that the Crown has not yet indicated a firm position on the moratorium question, it remains open for Mr Stafford and the first respondent to reach agreement on that matter.
Given those considerations, and also the lengthy history of these matters, we are not persuaded that the urgency criterion is satisfied. In reaching that view, we have also had regard to the factors set out in s 59(4) and in particular the primary purpose of this Court as an appellate court.
In all the circumstances, we are therefore not satisfied that Mr Stafford’s Judicial Review proceedings should be transferred to this Court.
Result
We decline the application for the proceedings in CIV‑2018-485-341 to be transferred to this Court and heard with the appeal in CA125/2018.
There is no order for costs.
Solicitors:
Pitt & Moore, Nelson for Applicant
Crown Law Office, Wellington for First Respondent
Accident Compensation Corporation, Wellington for Second Respondent
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