Staite v Kusabs - [2017] NZHC 2299

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

I TE KŌTI MATUA O AOTEAROA
TE ROTORUA-NUI-Ā-KAHU ROHE

CIV 2009-463-888 [2017] NZHC 2299

BETWEEN
PETER DANIEL STAITE, JEAN

TANIRAU-CARSTON, DEBORAH PAKAU, LEONIE REI NICHOLLS AND BRUCE ANDERSON BAMBER AS TRUSTEES OF THE WHAOA NO 1

LANDS TRUST AND OTHERS Plaintiffs

AND

ANDREW MARUTUEHU KUSABS, DONALD MAIURANGI BENNETT, JULIAN KUMEROA KEEPA AND WIREMU WAAKA AS TRUSTEES OF THE TUMUNUI LANDS TRUST AND OTHERS

Defendants

Hearing: 18 September 2017

Counsel:

D G Chesterman and J P Koning for Plaintiffs
M S McKechnie and T Kinder for Defendants

Judgment:

22 September 2017

JUDGMENT (NO. 3) OF HEATH J

This judgment was delivered by me on 22 September 2017 at 11.00am pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:
Koning Webster, Tauranga Tim Kinder, Putaruru Counsel:
D Chesterman, Auckland
M McKechnie, Rotorua

STAITE v KUSABS [2017] NZHC 2299 [22 September 2017]

The application

[1] The trustees of the Tumunui Lands Trust (the Tumunui Trust) apply to recall part of a judgment that I gave on 13 March 2017.1 The application is opposed.

Background

[2] The trustees of the Whaoa No 1 Lands Trust (the Whaoa Trust) entered into a lease (the Lease) with the Tumunui Trust in respect of a farm property near Reporoa. Although the Lease was executed in 1994, all parties recognised it was to operate from 13 December 1992.2

[3] In this proceeding, the Whaoa Trust sought relief against the Tumunui Trust on the basis that, due to breaches of fiduciary duties on the part of a common trustee, Mr Edward Moke, the Whaoa Trust had leased the land on materially disadvantageous terms. A separate claim was brought in relation to a Maori Reservation established in 1986, but that part of the claim is not relevant for present purposes.

[4] I heard the claims over 11 sitting days in July and August 2016. Judgment was delivered on 13 March 2017. The background to the dispute is fully set out in that judgment.3 Having found that Mr Moke was in breach of certain fiduciary obligations of loyalty to the Whaoa Trust, and that Tumunui Trust had knowledge of his breach,4 I granted relief in the form of rectification of the Lease.

[5] The purpose of the relief was to ensure that Tumunui Trust did not gain inappropriate benefits from an ability to have rent payments set by taking into account improvements to the land that had been made by earlier lessees, and Whaoa Trust did not suffer any corresponding significant detriment. The problem arose out of the way in which the rent-fixing provision of the Lease had been drafted, which
enabled improvements made to the land made by the prior lessees, Mr Blackler and

1 Staite v Kusabs [2017] NZHC 416.
2 In a second judgment, given on 27 July 2017, I corrected the “operative” date from 1 July 1992 to 13 December 1992 under the slip rule: Staite v Kusabs [2017] NZHC 1758,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Staite v Kusabs

Details

AGLC: Staite v Kusabs [2017] NZHC 2299
Case: [2017] NZHC 2299
Decision Date: 22 September 2017

CaseChat Overview and Summary

The case of Staite v Kusabs involved the Whaoa No 1 Lands Trust, represented by Peter Daniel Staite, and the Tumunui Lands Trust, represented by Andrew Marutuehu Kusabs. The dispute centred on a lease agreement between the two parties, with the Whaoa Trust alleging that the lease was executed under materially disadvantageous terms due to breaches of fiduciary duties by a common trustee, Edward Moke. The Whaoa Trust sought relief on the basis that the lease contained an unfair rent-fixing provision that allowed improvements made by prior lessees to be taken into account. The Tumunui Trust applied for recall of part of the judgment delivered on 13 March 2017, arguing that the order for rectification should be recast to allow improvements made by the Tumunui Trust to be taken into account from the date it went into occupation of the land in 1989.

The High Court of New Zealand considered whether the application for recall should be granted, focusing on the issue of from what date improvements should be assessed. The Court held that the application for recall was justified as there were "very special reasons" for recalling the judgment. The Court acknowledged that it had overlooked the need to take into account improvements made by the Tumunui Trust from the time it went into occupation of the land in 1989. The Court found that it would be inequitable to direct the Tumunui Trust to pay rent without considering the improvements it made between 1989 and December 1992. Consequently, the Court granted the application for recall and made an order substituting the previous rectification order, requiring rental to be fixed in accordance with the formula in the lease but taking into account only improvements to the land made by the Tumunui Trust from the date it went into occupation of the land in 1989. The Court reserved questions of costs for later determination.

Orders