Waitakere Farms Limited v Mawhinney
[2023] NZHC 993
•28 April 2023
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2022-404-1499
[2023] NZHC 993
BETWEEN WAITAKERE FARMS LIMITED
Plaintiff
AND
PETER WILLIAM MAWHINNEY AND SIXTY-SIX AUCKLAND LIMITED
Defendants
AND
AUCKLAND COUNCIL
Third Party/Counterclaim Defendant
Hearing: 20 April 2023 Appearances:
AAH Low for plaintiff
P W Mawhinney for himself and second-named defendant SCM Waalkens and R E Argyle for third party/counterclaim defendant
Judgment:
28 April 2023
JUDGMENT OF PETERS J
This judgment was delivered by Justice Peters on 28 April 2023 at 4.45 pm pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar Date: ...................................
Solicitors: Cook Morris Quinn, Auckland
Rice Speir, Auckland
Counsel: AAH Low, Auckland
Copy for: Defendants
WAITAKERE FARMS LTD v MAWHINNEY [2023] NZHC 993 [28 April 2023]
Introduction
[1]This judgment determines two applications:
(a)An application by Auckland Council (“Council”) of 15 November 2022 in CIV-2022-404-1499 (“CIV-1499”). By this application the Council seeks an order striking out a counterclaim against it and setting aside a third party notice.
(b)An (amended) application of 24 February 2023 by Mr Mawhinney and Sixty-Six Auckland Ltd (“Sixty-Six”). By their application, Mr Mawhinney and Sixty-Six seek orders that CIV-1499 and CIV-2023-404-137 (“CIV-137”) be heard together, and either stayed pending determination of CIV-2019-404-36 (“CIV-36”), or heard at the same time as that proceeding. Mr Mawhinney also seeks to be joined to CIV-137.
[2] The director of Sixty-Six is Mr A M Mawhinney and Mr W P Mawhinney is its sole shareholder. Neither has sworn an affidavit regarding these applications, and nor was Sixty-Six represented by counsel at the hearing before me. I shall accept Mr Mawhinney’s submissions as made for himself and on behalf of Sixty-Six. However, as Mr Mawhinney knows, a company must appear by counsel unless leave otherwise is given. Mr Mawhinney did not seek leave from me but to be fair to him nor did I raise the point. As it turns out, nothing particularly turns on this given the view I take of the applications. That said, I draw Mr Mawhinney’s attention to the point as Sixty-Six may require representation on future appearances.
[3] I record that I have received extensive submissions from the parties. At the commencement of the hearing, Mr Mawhinney sought an adjournment which I declined. I did, however, allow him until 5 pm, 27 April 2023 to file and serve any additional submissions he wished and I received those submissions on 26 April 2023.
[4] It is necessary to say something about each proceeding before considering the applications.
CIV-2019-404-36
[5] CIV-36 is an appeal by Mr Mawhinney and “trustees of the Forest Trust” against a decision of the Environment Court delivered in 2018.1 The trustees of the Forest Trust are not named in the intituling. From the evidence before me, it appears the trustees change frequently. However, in an affidavit sworn on 20 March 2023, Mr Mawhinney states the trustees “include” Dokad Trustee Ltd and Milton Milan Ltd. The director of each of these companies is Mr A M Mawhinney. The shareholder in Milton Milan is Mr W P Mawhinney, and the shareholders in Dokad Trustee Ltd are Mr W P Mawhinney as to 99.9 per cent with Mr Mawhinney holding the balance.
[6] The Environment Court decision was in respect of an appeal by Mr Mawhinney in his capacity as trustee of Waitakere Forest Land Trust and the Forest Trust.
[7]The Council is the respondent to the appeal in CIV-36.
[8] The matters before the Environment Court concerned an application by Mr Mawhinney (and possibly other parties) for consent to subdivide. Mr Mawhinney took issue with the manner in which the Council, or its predecessor, had assessed the application and matters consequential thereon, including the nature of conditions the Council had imposed when it granted the consent (“conditions”). Mr Mawhinney’s case before the Environment Court was that the Council had erred in assessing the application as one for a discretionary activity rather than a controlled activity or a restricted discretionary activity, and that some of the conditions imposed were ultra vires as a result.
[9] The Environment Court upheld the Council’s decision to treat the application as one for a discretionary activity and it also ruled on the various other matters before it.
[10] On 7 January 2019, Mr Mawhinney and the trustees of the Forest Trust, whoever they may have been at the time, lodged their notice of appeal to the High Court against the Environment Court’s decision. An appeal to the High Court
1 Mawhinney v Auckland Council [2018] NZEnvC 239.
against a decision of the Environment Court may be brought on a question of law. The notice of appeal lists 11 such questions, or at least what are said to be questions of law.
[11] CIV-36 has been in abeyance since an order by Wylie J of 11 April 2019.2 The background to that order is as follows. On 28 February 2019, pursuant to s 166 Senior Courts Act 2016, Hinton J made an order restraining Mr Mawhinney “in any capacity
… from commencing or continuing any civil proceeding (or matter arising out of a civil proceeding)” relating to identified parcels of land.3 As a result, Mr Mawhinney required leave to continue the appeal. Wylie J declined leave. Although Hinton J had imposed the maximum period of restraint of five years, the Court of Appeal subsequently reduced this to three years, and that three years expired at the end of February 2022.4
[12] In the course of their submissions during the hearing, the Council, WFL and the trustees (these latter two being defined below) submitted that Wylie J’s order, or at least its effect, was to strike out or dismiss the appeal. In his minute of 11 April 2019, Wylie J said:
[11] ... In my judgment, Mr Mawhinney should be restrained from continuing with his appeal against the Environment Court’s decision.
[12]Accordingly, leave to continue with the appeal is declined.
[13] It is apparent from the minute that Wylie J considered the appeal unmeritorious but whether his order had the effect alleged is a different matter. As it happens, I am able to determine the applications before me without resolving that issue. The important point for present purposes is that the appeal has not progressed at all in the last four years and there is some real doubt about whether it will ever be heard, given the Council’s submissions.
CIV-2022-404-1499
[14] CIV-1499 is a claim by Waitakere Farms Ltd (“WFL”) against Mr Mawhinney and Sixty-Six commenced in late-August 2022.
2 Mawhinney v Auckland Council HC Auckland CIV-2019-404-36, 11 April 2019.
3 Auckland Council v Mawhinney [2019] NZHC 299 at [160].
4 Mawhinney v Auckland Council [2021] NZCA 144.
[15] WFL is the registered proprietor of the land in record of title identifier 1050478, North Auckland Registry. The land is subject to an encumbrance in favour of Mr Mawhinney and Sixty-Six, and they are also the holders of a Forestry Right under the Forestry Rights Registration Act 1983 (“Right”). The encumbrance confers rights ancillary to the Right. Both the encumbrance and Right were originally granted or created on 28 September 2010.
[16] By its first cause of action, WFL seeks orders under s 339(1)(c), alternatively 339(1)(a), Property Law Act 2007 (“PLA”). Section 339, set out below, permits the Court to make orders in respect of property owned by “co-owners”, as defined in s 4 PLA, which is also set out below. I have reservations about whether WFL on the one hand, and Mr Mawhinney and Sixty-Six on the other, are co-owners within the definition but it may be that I have overlooked some relevant matter.
[17] By its second cause of action, and in the alternative, WFL seeks various declarations and other relief regarding the Right and encumbrance. Its case is that neither serve any useful purpose or confer any practical benefit.
[18] Mr Mawhinney and Sixty-Six have counterclaimed and issued a third-party notice against the Council, resulting in the application by the Council for the orders referred to in (a) above. I should record a caveat, however, that Ms Low, for WFL, submits that there is in fact no counterclaim against WFL. If that is so, then there cannot be a counterclaim at all, as the plaintiff is a necessary party to a counterclaim.
[19] As matters stand, CIV-1499 has a two day hearing on 10 and 11 May 2023. It will be necessary to adjourn the hearing if the Council fails in its application.
CIV-2023-404-137
[20] CIV-137 is an originating application of 14 November 2022 by Peter and Linda Alderton as trustees of the Peter Alderton Family Trust (“trustees”) against Sixty-Six. The trustees are the registered proprietors of a 9/10th share of the land in record of title identifier 645960. Sixty-Six is the registered proprietor of the remaining 1/10th share. The land in the record of title comprises Lot 309, DP 210991 being 4.28 ha, and a 1/8th
share in each of Lot 200, DP 210991 and Lot 9, DP 166619, both being access lots shared by other owners of land in the vicinity.
[21] Aside from their ownership interest, the trustees are also the lessees of all the land to which I have referred, with the exception of Lot 200, for a term of 999 years, commencing 1 July 1997.
[22] The trustees are seeking an order under s 339(1)(c) PLA that they acquire the 1/10th share held by Sixty-Six.
[23]Sixty-Six opposes the trustees’ application on various grounds.
Section 339 Property Law Act 2007
[24] As I have said, s 339(1) PLA, relevant to both CIV-1499 and CIV-137, permits the Court to make orders affecting land owned by co-owners. Relief is discretionary and may only be granted after consideration of matters provided for in s 342, which it is unnecessary for me to include. Section 339(1) provides:
339 Court may order division of property
(1)A court may make, in respect of property owned by co-owners, an order—
(a)for the sale of the property and the division of the proceeds among the co-owners; or
(b)for the division of the property in kind among the co-owners; or
(c)requiring 1 or more co-owners to purchase the share in the property of 1 or more other co-owners at a fair and reasonable price.
[25]Co-owner is defined in s 4 PLA as “a tenant in common or a joint tenant”.
Application by Mr Mawhinney and Sixty-Six
[26] I have set out in (b) above the orders sought by Mr Mawhinney and Sixty-Six. WFL and the trustees oppose the making of the orders. The Council abides the decision of the Court.
[27] The application as to the order in which the proceedings should be heard is made pursuant to High Court Rules 2016, r 10.12, which provides:
10.12 When order may be made
The court may order that 2 or more proceedings … be tried at the same time
… or may order any of them to be stayed until after the determination of any other of them, if the court is satisfied—
(a)that some common question of law or fact arises in both or all of them; or
(b)that the rights to relief claimed therein are in respect of or arise out of—
(i)the same event; or
(ii)the same transaction; or
(iii)the same event and the same transaction; or
(iv)the same series of events; or
(v)the same series of transactions; or
(vi)the same series of events and the same series of transactions; or
(c)that for some other reason it is desirable to make an order under this rule.
[28]The grounds Mr Mawhinney and Sixty-Six have specified are that:
(a)the three proceedings relate to the same general area of land; and
(b)it is desirable and a more efficient use of Court resources to determine all the proceedings at the one time but, in any event, with CIV-36 resolved in advance.
[29] The application that Mr Mawhinney be joined to CIV-137 is made pursuant to r 4.56, which provides:
4.56 Striking out and adding parties
(1)A Judge may, at any stage of a proceeding, order that—
(a)the name of a party be struck out as a plaintiff or defendant because the party was improperly or mistakenly joined; or
(b)the name of a person be added as a plaintiff or defendant because—
(i)the person ought to have been joined; or
(ii)the person’s presence before the court may be necessary to adjudicate on and settle all questions involved in the proceeding.
...
[30] Mr Mawhinney seeks to be joined on the basis that he and Sixty-Six are both trustees of Sixty-Six Auckland Trust, that the trustees are obliged to act unanimously, and that Sixty-Six has entered into an agreement to with Mr Mawhinney to transfer part of its interest in the land in issue in CIV-137.
[31] I decline to stay CIV-1499 and CIV-137, or to require that they be heard at the same time as CIV-36, for the following reasons.
[32] First, for the reasons I have given there is no prospect of a prompt hearing of CIV-36, even if it is able to be pursued. That there is no prospect of a prompt hearing is in contrast to CIV-1499, as I propose to grant the Council’s application (see (a) above). In all likelihood, CIV-137 will also be ready for trial well before CIV-36. Although CIV-137 does not yet have a hearing date, counsel for the trustees, Ms Low, thought it possible there could be a hearing of the matter before year end. Given the pleadings, and subject to Court availability, in my view that is realistic.
[33] Secondly, WFL and the trustees are private litigants. They have no interest in Mr Mawhinney’s longstanding dispute with the Council regarding his proposal to subdivide. I am not persuaded there is any good reason why they should be delayed because of that dispute, or that the dispute is even relevant. If it is relevant, there will be scope, admittedly limited, for Mr Mawhinney and Sixty-Six to inform the trial Judge determining CIV-1499 and CIV-137.
[34] The interests of justice require me to have regard to the trustees’ position in CIV-137 and WFL’s.
[35] In support of the trustees’ originating application, Mr Alderton swore an affidavit on 25 October 2022. The trustees purchased the property in 1997 and, on Mr Alderton’s evidence, understood that in the fairly short-term they would be able to acquire the remaining 10 per cent that is now held by Sixty-Six. Some 26 years later, the ownership shares remain as they were at the outset.
[36] Sixty-Six may have a different perspective on matters but, as I have said, there is no affidavit evidence from its director or its shareholder. Moreover, Sixty-Six is not a party to CIV-36. Mr and Mrs Alderton, now in their 60s, are entitled to have a resolution of the issue they have put before the Court, so that they know where they stand and can structure their affairs accordingly.
[37] As to WFL, it is seeking to dispose of its land but the evidence of its director, Mr Duncan, is the state of the title is a deterrent to purchasers. Mr Duncan’s evidence is that the Right and encumbrance bring no ongoing advantage to their holders. The rights and wrongs of that contention will be a matter for the imminent trial.
[38] As to Mr Mawhinney’s application to be joined to CIV-137, this too is dismissed. There is nothing to be gained by joining Mr Mawhinney. Sixty-Six is capable of putting all relevant matters before the Court.
[39] To conclude, I do not consider it necessary to make any order that might interfere with the prompt determination of CIV-1499 and CIV-137, and I am not persuaded there is any disadvantage to Mr Mawhinney and Sixty-Six in keeping the various proceedings separate.
[40]Accordingly, I decline the application referred to in (b) above.
Council’s application to strike out and dismiss
[41] The grounds on which the Council relies in support of its application to strike out and set aside are:
(a)Mr Mawhinney is seeking to relitigate matters already determined;
(b)The counterclaim/third party notice and application to consolidate are likely to prejudice or delay the substantive claims;
(c)The relief sought against the Council in the counterclaim in CIV-1449 is not related to or connected with the original subject matter of the proceeding — see r 5.57.
(d)The third party notice does not meet the criteria in r 4.4(1) and should be set aside accordingly, pursuant to r 4.16.
(e)The claim against the Council is frivolous, vexatious and an abuse of process.
WFL abides the decision of the Court on the Council’s application.
Discussion
[43] It is sufficient for me to address the grounds in [41](c) and (d) only, which in turn require consideration of rr 4.4, 4.16 and 5.57. These provide:
4.4 Third parties
(1)A defendant may issue a third party notice if the defendant claims any or all of the following:
(a)that the defendant is entitled to a contribution or an indemnity from a person who is not a party to the proceeding (a third party):
(b)that the defendant is entitled to relief or a remedy relating to, or connected with, the subject matter of the proceeding from a third party and the relief or remedy is substantially the same as that claimed by the plaintiff against the defendant:
(c)that a question or issue in the proceeding ought to be determined not only between the plaintiff and the defendant but also between—
the plaintiff, the defendant, and the third party; or
(ii)the defendant and the third party; or
(iii)the plaintiff and the third party:
(d)that there is a question or an issue between the defendant and the third party relating to, or connected with, the subject matter of the proceeding that is substantially the same as a question or an issue arising between the plaintiff and the defendant.
(2)A third party notice must be issued within—
(a)10 working days after the expiry of the time for filing the defendant’s statement of defence; or
(b)a longer time given by leave of the court.
(3)A third party notice may be issued only with the leave of the court if an application for judgment is pending under rule 12.2 or 12.3.
4.16 Setting aside third party notice
(1)A third party may apply to the court to have a third party notice issued and served with the leave of the court set aside.
(2)A party to a proceeding served with a third party notice issued and served without leave of the court may apply to the court to have the notice set aside.
(3)In either case, the court may—
(a)set the third party notice aside and dismiss the defendant’s statement of claim against the third party—
(i)on the merits; or
(ii)without prejudice to the right of the defendant to pursue that claim against the third party in an independent proceeding; or
(b)give other directions.
5.57 Counterclaim against plaintiff and another person
(1)A defendant who has a counterclaim against the plaintiff along with any other person (whether a party to the proceeding or not) for any relief relating to or connected with the original subject matter of the proceeding may, within the time allowed for filing a statement of defence, file a statement of the counterclaim and serve a copy on the plaintiff and that other person (to be referred to as a counterclaim defendant).
...
(6)The court may at any time order that a counterclaim to which subclause (1) applies be struck out, upon such terms as it thinks just, if it appears—
(a)that, by reason of the counterclaim, the plaintiff is likely to be unduly delayed in obtaining relief; or
...
(c)that the relief sought in the counterclaim is not related to or connected with the original subject matter of the proceeding.
[44] I propose to put to one side Ms Low’s submission that WFL is not a party to the counterclaim.
Relief sought in the counterclaim
[45] By their counterclaim, the defendants seek a declaration that Sixty-Six is a “co-owner” of the land in issue. Whether Sixty-Six is a co-owner of the land is not a matter in which the Council has any interest or on which it can make a meaningful contribution.
[46] The defendants also seek a declaration and orders that the conditions are nullities and void; that Sixty-Six obtain a survey plan consistent with the consent to subdivide; and orders consequent upon the deposit of that plan.
[47] As Mr Waalkens for the Council submits, this relief is entirely unrelated to the subject matter of WFL’s proceeding. That there is such a relationship is required by both r 5.57 in respect of a counterclaim and rr 4.4(1)(b) and (d) as regards the issue of a third party notice. Nor are any of the other grounds on which a third party notice may be issued satisfied, these being rr 4.4(1)(a) or (c).
[48] It follows that the defendants’ third party notice and counterclaim are outside what is permitted by the High Court Rules 2016. Given that, I grant the Council’s application of 15 November 2022.
Result
[49] I grant Auckland Council’s application of 15 November 2022 to set aside the counterclaim/third party notice against it in CIV-1499.
[50]I dismiss the defendants’ (amended) application of 24 February 2023.
Costs
[51] The parties may file submissions on costs, not to exceed three pages in length, if they are unable to agree.
Peters J
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