Archive | Supreme Court

Kauri export opponents get partial win in Supreme Court

The Northland Environmental Protection Society has won one ground of appeal to the Supreme Court on the export of kauri products, but has failed to get a declaration from the court on exports of swamp kauri.

The court issued its judgment today.

The declarations sought relating to the operation of the Forests Act included a declaration that light surface carvings or decoration don’t meet the definition of finished or manufactured indigenous product and a declaration that the Ministry for Primary Industries had acted unreasonably in approving exports of swamp kauri.

The majority held that, to be lawfully exported, an item must be a product in itself and in its final or kitset form.

The court majority concluded, on the Forests Act appeal: “We have differed in a number of major respects from the Court of Appeal’s interpretation of the definition of finished or manufactured indigenous timber product. This means that the appeal on this point must be allowed.”

The court held that the Protected Objects Act doesn’t cover swamp kauri as a category, and dismissed that appeal.

However, the court majority suggested that, given swamp kauri is a finite resource and the threat to living trees from kauri dieback disease, “a review of the legislative framework with regard to swamp kauri may be desirable”.

Justice Willie Young reached the same conclusions but provided separate reasoning, primarily around certification. Since 2004, no mandatory certification process applied to exports of finished or manufactured indigenous timber product.

Justice Susan Glazebrook wrote the majority decision. The other judges on the bench were Justices Mark O’Regan, Ellen France & Terry Arnold.

Supreme Court kauri export decision

Attribution: Judgment.

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Top court rejects golfcourse levy on Pauanui Lakes subdivision section owner

Pauanui Lakes homeowner Hartley Vincent has defeated the final attempt, in the Supreme Court, to make him pay levies to the golf club which runs the Coromandel development’s golfcourse.

Gary MacDougall (Pauanui Lake Resort Ltd) began his ambitious $34 million resort project in 1998 — 153 residential sections, mostly round the edge of an 18-hole golfcourse, and a 60-room lodge on a 100ha Duck Creek property that runs along a valley 4km from Hoppers’ Pauanui coastal development, but that original development company went into receivership on 1 August 2001.

Other developers took on the project but also collapsed in 2009 as the global financial crisis took hold.

Mr Vincent, co-owner of Harpers Fashions Ltd whose family trust owns lot 75 of the residential subdivision developed around the course, and current golfcourse business owners & managers Lakes International Golf Management Ltd & The Lakes International Golf Course Ltd squared off before Associate Judge Hannah Sargisson in 2 separate summary judgment cases in the High Court in 2013, for a nil decision.

The case then went to trial in the High Court before Justice Paul Heath, who found the golfcourse businesses were entitled to levy Mr Vincent for fees. Justice Heath found that Lakes International Golf Management was entitled to enforce the covenant originally to have been held by an incorporated society, which was never formed, and that Mr Vincent was required as owner of a subdivision lot to join the golf club.

Mr Vincent appealed to the Court of Appeal, which supported his case in 2014.

The Court of Appeal said: “In our view, the scheme of the covenant and the wording of the definition of ‘golf club’ are clear and permit of only one meaning. The obligations were imposed in relation to a golf club that was to be incorporated as an incorporated society to provide for playing rights on the golf course.”

However, in the Supreme Court decision written by Justice Sir Willie Young & issued on Wednesday, the country’s highest court said it was satisfied “that there is no occasion for us to reach a concluded view in respect of them [arguments over whether a society as postulated would meet what was envisaged by the covenant]. This is because the case must be determined by reference to what has, and not what might have, happened.

“What has happened is that the golf club as established is not of the kind stipulated in the covenant. That it might have been no less onerous for Mr Vincent to join a golf club which was an incorporated society is of no moment as he cannot be compelled to do something which is different from what he agreed.”

The 5 members of the Supreme Court who heard the case in March were Chief Justice Dame Sian Elias and Justices Sir Willie Young, Susan Glazebrook, Mark OʼRegan & Ellen France.

Link: Supreme Court decision

Earlier story:
U: The names behind the action, the week to 24 April 2011, part 1, Richard & Susan Herbert’s insolvency proposals go to joint hearing

Attribution: Supreme Court decision.

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Supreme Court rejects individual owners’ case against body corp on leaky repairs

The Supreme Court has rejected an appeal by 5 of the 22 owners of the Bridgewater Bay block of apartments in Paihia who opposed a comprehensive repair that the majority wanted.

The 5 applicants contended that the comprehensive $3 million repair estimated by the body corporate was outside the powers of the body corporate under the Unit Titles Act 2010 and that only targeted repairs to some units were necessary.

The 5 owners lost their case in the High Court and on all 6 grounds in the Court of Appeal. They wanted to contest the decisions on 5 of the 6 grounds.

The first of those 6 grounds concerned the relationship between 2 sections of the Unit Titles Act, sections 138(1)(d) & 80(1)(g). Section 138(1)(d) requires a body corporate to repair & maintain “any building elements & infrastructure that relate to or serve more than one unit”. Section 80(1)(g) requires an owner of a unit to repair & maintain the unit to ensure that no damage or harm is or has the potential to be caused to the common property, any building element, any infrastructure, or any other unit in the building.

The Supreme Court said: “The applicants wish to argue that the latter takes priority over the former and that, on the facts of the present case, that means that they as owners should determine what repairs to make to their respective units, rather than having a comprehensive repair undertaken by the body corporate.”

However, the Supreme Court bench of Justices Sir Willie Young, Sir Mark O’Regan & Dame Ellen France saw little prospect of the applicants overturning the ruling of the Court of Appeal, which found that section 138 provided the authority for the body corporate to carry out work required to address water ingress into the common property.

The case was brought by Derek & Carol Wheeldon & 4 other owners against body corporate 342525.

Supreme Court decision
Court of Appeal decision, 7 June 2016

Attribution: Court judgments.

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Supreme Court rejects Mangawhai Ecocare case

The Supreme Court has declined the Mangawhai Ratepayers & Residents Association’s application for leave to appeal against the Court of Appeal’s dismissal of its claim against the Kaipara District Council, and awarded the standard $2500 costs against the association.

The ratepayers association lost its case in the High Court primarily because of the Kaipara District Council (Validation of Rates & Other Matters) Act, passed in December 2013. The association’s case was heard in February 2014 and was unable to overcome the validation act.

In the High Court, Justice Paul Heath said he was satisfied that, had the validation act not been passed, the association would have succeeded in obtaining the relief it originally sought in relation to the council rating decisions over the Mangawhai Ecocare wastewater system.

But the validating law was passed, the illegal borrowings were deemed to be protected transactions under the Local Government Act, and neither Justice Heath nor the 3 Court of Appeal judges could see their way past those barriers.

The Supreme Court bench of Chief Justice Dame Sian Elias & Justices Terence Arnold & Mark O’Regan said the association sought to argue that the operation of the protected transactions provisions didn’t affect the lawfulness of rates set by the council. The association said those provisions affected only the contractual relationship between the council & the creditor, and had no effect on the statutory relationship between the council & the ratepayer. “That then provides the foundation for an argument that rates that have been set by the council for the purposes of meeting its obligations in respect of the protected transactions are unlawful because the purpose for which they are set is, itself, unlawful. The association wishes to argue that its interpretation becomes clearer when the protected transactions provisions are interpreted in a manner that gives effect to the right of review in section 27(2) of the NZ Bill of Rights Act.”

From there, the Supreme Court gave its answers on the 3 points the association raised:

“The question as to whether a local authority can set rates to service the performance of obligations under a protected transaction is a question of general or public importance, as the council accepts. But, in the face of the clear wording of section 118, the association’s argument cannot succeed. There is no scope for a narrower interpretation. We do not therefore see this case as an appropriate one to address the proposed question. Nor do we see any risk of a miscarriage if leave is not given on this point.

“The second point relates to the 2013 act. The association wishes to argue that the validation of rates effected under section 5 of that act, which declares that the rates ‘are valid & declared to have been lawfully set by the council’, has a narrower meaning than appears on its face, particularly if the provision is interpreted in a manner which is consistent with the right of judicial review under section 27(2) of the Bill of Rights.

“The association says that the effect of the 2013 act is to validate only the irregularities listed in the preamble to the 2013 act, and the fact that the rates were assessed in relation to illegal borrowings and that the council failed to consult with ratepayers were not specifically referred to in that preamble. The association wishes to argue that its narrow interpretation is more consistent with the Bill of Rights.

“Legislation validating illegally struck rates is not uncommon, and therefore the interpretation of the 2013 act could be a matter of general importance. However, we see the 2013 act as unique, and the arguments relating to its interpretation as specific to the present facts.

“Nor do we see any risk of miscarriage in the event that leave is not granted on this point. We are not persuaded that it is arguable that the 2013 act can be interpreted other than as a validation of all irregularities, not just those recited in the preamble. We are not persuaded there is room for a narrower Bill of Rights-compliant interpretation.

“The third matter concerns the costs award made in the Court of Appeal. The association submitted in that court that costs should lie where they fell because the litigation was public interest litigation. The Court of Appeal did not consider that there was any proper basis to depart from the normal rule that costs follow the result. It said that, although the association was motivated by considerations of principle, its members had a private interest in the outcome it pursued in the Court of Appeal.

“The association wishes to argue that the fact that, as ratepayers, members of the association would benefit from a favourable outcome should not have led to a conclusion that a concessionary approach to costs should be applied because the litigation was public interest litigation. We see this as a facts-specific inquiry and not a matter that can be classed as of public significance. We also see no risk of a miscarriage of justice if leave is not granted on this point.”

Rogan reaction

Association chair Bruce Rogan commented on the Kaipara Concerns website: “The champagne corks will be popping in every council office in New Zealand because it now means that when a council borrows money it no longer has to comply with the Local Government Act or the Local Government (Rating) Act. Even monies raised for an unlawful purpose become the responsibility of ratepayers.

“It is also a sad reflection on the attitudes of our courts that the High Court, the Court of Appeal & the Supreme Court adopted with some gusto the meaning of 2 enactments – the Mangawhai Validation Act & the protected transaction provisions in the Local Government Act – that endorsed the approach of local government, but which could not be justified on the plain meaning of the words or on the basis of the legislative history.

“In spite of the Supreme Court stating that there has been no miscarriage of justice, a great injustice has been perpetrated on the people of Kaipara. That also applies to the people of New Zealand, but they remain in ignorance of the true significance of the decisions that have been made. It is also a very sad day for the rule of law in New Zealand.”

I began covering this case, including the High Court hearing in Whangarei, because clear injustice was overruled by the validation act, and I was curious to see if any other approach might see the ratepayers recover any of the $58 million of Ecocare debt that was mostly raised on their behalf but in their ignorance.

The only avenues appeared to be to argue that lenders hadn’t undertaken adequate due diligence and that the office of the Auditor-general was negligent in its auditing.

In March, the council, run by commissioners since 2012, reached a settlement with the office of the Auditor-general for a payment of $5.375 million.

Kaipara Concerns

Earlier stories:
31 March 2016: Auditor-general settles with $5.375 million payment to Kaipara council
18 December 2015: Resounding Appeal Court defeat for Mangawhai ratepayers
27 August 2014: Kaipara council to sue ex-ceo & Audit NZ, looking at ex-mayors, councillors & consultants
28 July 2014: Judge tells Mangawhai ratepayers to pay up, also awards them indemnity costs in more elaborate decision
28 May 2014: Judge to issue hamstrung Mangawhai ratepayer group indemnity costs, accepts new validation law, wants more debt options considered
23 June 2014: Kaipara commissioners get debt report, obliged to adopt annual plan, and Mangawhai group says it will appeal case
30 May 2014: Commissioner says Mangawhai rates liability now “crystal clear”

Attribution: Court decision, Kaipara Concerns.

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3 appeal points to argue in schools’ leaky claims against Carter Holt

The Supreme Court approved 3 grounds for appeal & cross-appeal today in Carter Holt Harvey Ltd’s defence of leaky building claims against it by the Ministry of Education & a number of schools.

The bench of Justices Sir Willie Young, Dame Susan Glazebrook & Terry Arnold said the 3 grounds were whether the Court of Appeal was correct to conclude that the claims in negligence were arguable, the claims for negligent misstatement were not arguable, and section 393 of the Building Act 2004 (on limitation defences) didn’t apply to the claims.

In July, the Court of Appeal allowed Carter Holt’s appeal in part and struck out the third cause of action in relation to negligent misstatement.

The Minister, Ministry & Secretary of Education, on behalf of the boards of trustees of schools – possibly over 1400 of them, with Orewa Primary named in the cases – filed a product liability claim against 4 manufacturers, including Carter Holt, saying the cladding sheets & cladding systems installed in various schools throughout New Zealand were defective and were designed & manufactured by Carter Holt in circumstances giving rise to a tortious duty of care & other causes of action.

The claimants filed claims against Carter Holt in negligence, breach of the Consumer Guarantees Act & breach of the Fair Trading Act. Carter Holt applied to the High Court to strike out all claims, except the Fair Trading Act claim, arguing the causes of action couldn’t succeed and so should not proceed to trial. Carter Holt also argued the proceedings were brought out of time, falling outside the 10-year longstop limitation period in the Building Act.

The High Court held that all challenged causes of action were arguable, and found that the claim wasn’t out of time.

The first appeal question was whether it was arguable Carter Holt was liable as a product manufacturer for carelessly designing & manufacturing its cladding product, shadowclad.

The Court of Appeal said the existence of a duty of care was arguable in light of the contractual context between the parties, the relevant statutes governing building and the construction of schools and their health & safety obligations. The court also found it arguable that Carter Holt owed a separate duty of care to warn the claimants about any potential risk the cladding sheets might pose.

The Court of Appeal ruled against the schools’ claims of negligent misstatement. They’d argued Carter Holt had falsely stated through its advertising materials that the cladding was fit for purpose, and the claimants had relied on those statements. However, the court ruled that these statements weren’t reasonably capable of being relied upon because they were general & made to all consumers.

On the question of being out of time, the Court of Appeal held that the claims weren’t subject to the Building Act longstop, saying this was consistent with the policy of the Building Act, which wasn’t intended to apply to manufacturers & suppliers of building products.

Link: Court of Appeal judgment, CA 321

Attribution: Judgments.

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Insurance Council wins again in court battle over quake-strengthening

The Insurance Council has won again in its third court battle over Christchurch City Council’s attempt to force owners – and thereby their insurers – to strengthen buildings beyond the “earthquake-prone” level, 34% of new building standard.

In the wake of the 2010-11 earthquakes, the city council wanted to make building owners strengthen their buildings to 67% of the standard.

The Canterbury Earthquakes Royal Commission, High Court, the Court of Appeal and, yesterday, the Supreme Court supported the Insurance Council’s position, that 34% was enough.

The latest decision, by a 5-judge bench of the Supreme Court, was on an appeal by Canterbury University. The city council dropped out of the case after losing in the High Court, and the body corporate for the Oxford apartment building dropped out after losing in the Court of Appeal.

The university argued that a territorial authority was entitled to require that buildings be strengthened to a greater extent than that specified earthquake-prone level. Although the university accepted the interpretation of the lower courts & the royal commission was available to them, it argued that its interpretation better reflected the statutory context and, in particular, the focus on safety in the Building Act & instruments.

A lot of money is at stake. The difference between the city council policy & Insurance Council position amounted to about $140 million for the university.

The Insurance Council said the city council policy would have affected the costs to insurers & building owners of repairing or reinstating damaged buildings, the level of cover available under material damage insurance policies and the willingness of reinsurers to invest in the New Zealand market.

The Supreme Court majority of Justices John McGrath, Mark O’Regan & Peter Blanchard accepted the Insurance Council interpretation.

Although concurring in the result, Justices Susan Glazebrook & Terry Arnold gave separate reasons. Their view was that the danger to be removed by exercise of the power given to the city council was the likelihood of collapse in a moderate earthquake. They said the city council might accordingly require a building to be strengthened beyond 34% of the new building standard if that was necessary to reduce or remove that danger.

Link: University of Canterbury v The Insurance Council of NZ

Attribution: Judgment & court release.

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Unit owners win Empire access case in Supreme Court

A group of owners of units in the Empire Apartments in Auckland, privately managed as a student hostel, has won a Supreme Court appeal over access to the building at 21 Whitaker Place, 7 years after taking court action.

The group of 9 unit owners, represented in the claim by first plaintiff Chuan Wu, an Australian owner, rejected operation of the building by Theta Management Ltd (John Chen) under long-term leases and wanted to be able to lease their units directly to tenants. They refused to sign a building security & access protocol or to pay a security deposit as a condition of access to the building.

They were denied access, including having unit locks changed. Mr Wu claimed in private nuisance & trespass.

Justice Raynor Asher agreed with Mr Wu’s claim in the High Court, but the Court of Appeal allowed the appeal by the body corporate & Theta Management in part.

The Supreme Court bench of 5 judges agreed that Mr Wu (as representative) should not have been deemed a trespasser, and 4 of the 5 judges agreed Mr Wu should not have been required to sign the protocol to mitigate his losses.

The court thus dismissed the body corporate & Theta’s cross-appeal on mitigation. Justice Sir Willie Young concluded that Mr Wu could have mitigated his losses by accepting an offer by Mr Chen in 2008 enabling access by signing the protocol for $1000, without prejudice to subsequent court decisions, but the other 4 judges found it would have been unreasonable.

The Supreme Court requires the body corporate & Theta to pay Mr Wu $25,000 costs plus disbursements, the Court of Appeal costs orders have been set aside and the High Court’s costs & interest orders reinstated.

Attribution: Judgment.

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Supreme Court denies Pouakani right to Waikato River ownership

The Crown can rest easy in its ownership of the Waikato River, which means power station owner & operator Mighty River Power Ltd can also rest easy.

On Friday, the Supreme Court issued a very long judgment, containing separate opinions by 4 judges, all rejecting the appeal by a group of descendants of the Pouakani people at Mangakino against lower-court findings that they didn’t retain an interest in about 35km of the riverbed to the midpoint, or that the Crown held an interest in the riverbed on their behalf through constructive trust ever since land titles were issued in the late 1800s.

According to the potted history in the Supreme Court judgment, the Pouakani people decided in the 1880s they’d like to have their land surveyed and titles issued, a task completed in the 1890s after some disputes were ironed out.

In return for the survey, the Crown acquired some of the Pouakani land, which looked an excessive fee no matter which century it was done in.

The recent question in the courts, however, was whether the Crown acquisition included the riverbed to the midpoint, a custom under English common law. I suspect back then, as now, people used the river but didn’t think of it in terms of ownership. Nevertheless, their use of it was probably an expression of ownership.

Use of the river gained a different value when the Government started building power stations along it, and a new value when ownership of the power generation business was privatised, in this case through Mighty River Power.

The Mighty River share float was deferred at the time of the last general election, in 2011, when legal action was threatened over river ownership. But it’s been ongoing legal action, either in the courts or through treaty settlement actions. The first-named appellant, John Hanita Paki, has been fighting since the 1970s for redress of ownership.

The latest case before the Supreme Court was heard in February 2013. One of the 5 judges, Robert Chambers, died before the decision was written, Chief Justice Dame Sian Elias wrote the main section and Justices Sir John McGrath, Sir Willie Young & Dame Susan Glazebrook supported her, with some different reasoning.

All 4 judges rejected the Pouakani claim to the riverbed, essentially on 2 grounds, best expressed by Justice Glazebrook. She said if custom in the 1880s had it that riparian owners owned the river to the midpoint, the Crown wouldn’t have had to tell the Maori owners about this and the vendors of the land would have known they were also handing over half the river. If that wasn’t the custom, then the ancestors of the appellants never owned half the river. Either way, the judge said, they lost.

Detail from the judgment follows:

Chief Justice Elias wrote in her conclusion: “Whether the Crown became the owner of the riverbed adjacent to the Pouakani lands on purchase of the interests of the Pouakani riparian owners depends upon whether any customary property in the riverbed was extinguished upon investigation of the riparian lands.

“It is not established that ownership of the riverbed was vested in the owners to whom the riparian lands were awarded and subsequently passed to the Crown with its purchases.

“Such ownership to the middle of the flow does not arise by operation of law and could only be established if consistent with Maori custom & usage (a question of fact for investigation). The necessary foundation for the claim of breach of fiduciary duty in the Crown acquisition of the riparian lands has not been established and cannot be assumed. As a result, the claims fail.

“The appeal must be dismissed, but for reasons that differ from those given by the Court of Appeal. Although the Crown has formally succeeded on the appeal, that was not on the basis of the cases put forward by either party. In these unusual circumstances, I would make no order for costs.”

Justice Young write in his section of the judgment: “This case concerns a large block of land at Pouakani, near Mangakino and adjacent to the Waikato River. In the 1880s, the then Maori owners of Pouakani applied to the Native Land Court to have titles created. The land in issue in the case became vested in, or was transferred to, the Crown at various dates between 1887 and 1899.

“The appellants, suing as descendants of the owners recognised by the court, say that, unbeknownst to those owners, this process resulted in the Crown acquiring the riverbed adjacent to the land it purchased; this by operation of a rule of the English common law whereby a conveyance of riparian land is presumed also to transfer title to the adjacent riverbed up to its mid-point. This rule has a Latin tag, usque ad medium filum aquae, but I will refer to it as ‘the mid-point presumption’.

“The appellants say ‘the Crown’ (that is, the Crown officials involved in the purchases) should have warned the Maori owners about this presumption and failed to do so. Their case is that the obligation to warn arose by reason of the nature of the relationship between the Crown and the Maori owners. The appellants assert that the Crown now holds the land on a constructive trust (or perhaps on a resulting trust) in favour of the appellants. The appellants seek a declaration to that effect, but their counsel, Mr Millard QC, confirmed that the remedies they would ultimately seek, if successful, were proprietary & monetary remedies.

“In the High Court, the appellants’ claim failed on a number of grounds. Justice Rhys Harrison found that the claim was barred by the terms of the Pouakani Claims Settlement Act 2000. He also found that the Waikato River as a whole was a navigable river, with the consequence that the bed of it was ‘deemed to have always been vested in the Crown’ by virtue of section 14 of the Coal-mines Act Amendment Act 1903. He further held that the Crown did not owe a fiduciary (or similar) duty at large to indigenous people or a group of them. Any claim would, in any event, be barred by reason of the effluxion of time.

“The appellants’ appeal to the Court of Appeal failed. The Court of Appeal disagreed with Justice Harrison as to his finding that the claim was barred by the Settlement Act. But it agreed with him that the Waikato River was navigable for the purposes of the 1903 Act, and it further considered that, even if it could be established that the Crown owed a fiduciary duty, it was far from clear that there was a breach of it.

“However, the Court of Appeal did explore the possibility of recognising a relational duty of good faith with respect to Crown-Maori relations, though it concluded there was a lack of factual material to allow the court to determine whether there was a sustainable breach in this case. But even assuming a breach of fiduciary or relational duty in respect of Crown-Maori relations, the Court of Appeal did not consider it possible to impose a constructive trusteeship on the Crown, given the accretion of interests in the river over the course of a century and the problems of demarcation.

“Acting on the assumption that it owned the riverbed, the Crown has extensively developed it for power generation. There have also been other interests created in the riverbed. Once power generation development began, it must have been obvious to the appellants’ ancestors that the Crown was asserting ownership of the riverbed. This development began in 1918 at a time when some of those who had been involved in, and thus could have explained the transactions, were presumably still alive.

“The appellants say that it was impracticable to commence litigation earlier than they did. They say that up until the last 25 years or so, the courts tended to dismiss claims based on the tTreaty. As well, by the time that the Crown began to develop the river for power generation, their ancestors had been dispossessed & disempowered as a result of Crown actions & inactions and were in no state to commence complex litigation.

“This argument, if accepted, would result in the examination of 19th century transactions through a 21st century lens, with a resulting risk of distortion. And more generally & importantly, the force which the argument undoubtedly has is outweighed by considerations already referred to. The delay has simply been too long for the case to be able to be determined fairly, and too much has happened on the river for it to be practicable or fair to return to the situation as it was in the last years of the 19th century.”

In an article on the No Right Turn blog at the weekend, blogger Idiot/Savant summed up some of the context: “In 2003, the Court of Appeal delivered a bombshell ruling in Ngati Apa v Attorney-General: the Crown had not generally extinguished Maori customary rights over the foreshore & seabed, and ownership of particular areas of the foreshore & seabed was a question of fact to be determined by the Maori Land Court in accordance with the facts & history of the area. The resulting pakeha outrage at the idea that Maori might still have property rights led to the passage of an unjust raupatu law, the formation of the Maori Party, and its subsequent alliance with National to pass pretty much the same law under a different name. Now the Supreme Court has delivered a similarly explosive ruling.”

A court press release on Friday’s judgment described the appellants and went into considerable detail on the history to the claim. The first paragraph of that release is repeated here, the rest of it available through the link at the foot of the story: “The appellants are descendants of members of hapu who were awarded interests in land subdivided from the Pouakani block by the Native Land Court in the late 19th century. The lands included in their titles were bounded by the Waikato River and were said by the appellants to have included the riverbed to the midpoint through the operation of a presumption of the common law.

“They claimed that the Crown’s later acquisition of these lands also transferred the riverbed to the midpoint as a result of the midpoint presumption. The acquisition of the riverbed by the Crown in this way was claimed to have been in breach of fiduciary & equitable duties owed by the Crown to the Maori vendors of the riparian lands because it was not explained to them that, with the sale of the land to the Crown, they would lose their interest in the riverbed by presumption of law.”

Links: Supreme Court judgment, John Hanita Paki and others v The Attorney-General  
Court media release
No Right Turn blog entry, Another meteorite
No Right Turn
Pouakani Claims Settlement Act 2000

Attribution: Judgment, court media release, No Right Turn blog.

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After 17-year fight, highest court rules couple did have eligible leaky home claim

The Supreme Court declared yesterday that an Auckland couple’s 17-year-old leaky home claim against Auckland Council was eligible to be heard by the Weathertight Homes Tribunal.

The case revolved around the 10-year cut-off for seeking an assessor’s report for leaky home claims with the tribunal.

After the Supreme Court hearing last November, the couple, John & Helen Osborne, and the council reached a settlement, but it was conditional on the court not releasing a judgment.

Shortly after it was released, Auckland Council issued a statement saying: “The council’s offer to the Osbornes is now null & void and the claim will go back to the tribunal. This is not to say the claim is not capable of settling on different terms at a later date, but all the building parties of both the original works and the unconsented repairs will be included in the resolution of the claim.”

The Osbornes bought the newly built home on 26 April 1997. Its construction had been substantially completed by 15 August 1996 and code compliance certificates were issued on 19 February & 18 April 1997. The house began to leak in late 1997 and subsequent repairs weren’t effective.

The appellants applied for the assessor’s report on 14 February 2007. The assessor found the house became habitable on or around 15 August 1996 and was therefore outside the eligibility criterion specified in section 14(a) of the Weathertight Homes Resolution Services Act. Among other things, section 14(a) requires that the claim must relate to a house that was built within the period of 10 years before the day the claim is brought.

Auckland Council maintained section 14 was more restrictive than section 393 of the Building Act, which said the 10-year clock should start ticking on the date of issue of a consent, certificate or determination.

The Osbornes claimed against the council in the leaky homes tribunal but, in June 2007, the tribunal ruled they were eligible to claim for work after 13 February 1997, but dismissed the council as a respondent on the basis of the 10-year rule.

Justice Sir Willie Young, giving the 5-judge bench’s reasons in its decision, said the Osbornes “fell into a rather nasty trap when they initiated proceedings under the Weathertight Homes Resolution Services Act. As noted, on 14 February 2007, their claim against the Auckland Council was not precluded by section 393 of the Building Act, but by the time their claim under the Weathertight Homes Resolution Services Act had been ruled ineligible, which was not until June 2007, more than 10 years had elapsed since the issue of code compliance certificates, and any proceedings in the courts were barred by the 10-year long-stop limitation period provided for by section 393.1”.

Justice Young said the Supreme Court considered that “section 14(a), when construed in context and having regard to its purpose, is appropriately interpreted as a paraphrase of section 393 of the Building Act, with the result that a claim which may be within the long-stop limitation period provided by that section meets the section 14(a) eligibility criterion”.

Justice Young said the courts so far had concluded that the stopping of time provided for by section 37 applied only to proceedings under the leaky homes act and, for this reason, didn’t apply where claims were held to be ineligible.

He said the court agreed with the Osbornes’ lawyer, Tim Rainey, that Parliament intended section 14(a) to align the eligibility criteria with the operation of section 393 of the Building Act.

The Court of Appeal found: “Parliament has deliberately adopted the term ‘built’ [in section 14(a)] rather than the broader language used in section 393 of the Building Act or the expression ‘building work’ used in that act. Had Parliament intended to align the 2 provisions it would have been a simple matter to have done so.”

The Supreme Court saw a number of difficulties with the view that section 14(a) should be construed as imposing an independently operating limitation period which is virtually, but not exactly, the same as the 10-year long-stop limitation period in section 393 of the Building Act, and set out 6 points on why it differed from the lower courts:

(a)  The date a house is completed to building consent requirements would provide a strange starting point for what in substance is a limitation period. In many instances it will post-date the relevant acts or omissions of those involved in defective construction. It will, however, necessarily precede the date upon which the code compliance certificate is issued, which will almost always be the last relevant act of the territorial authority

(b)  There is no good reason why a claim which is within the 10-year long-stop limitation period provided for by section 393 of the Building Act should not be eligible under the Weathertight Homes Resolution Services Act. The policy reasons why the legislature provided for the processes stipulated by the Weathertight Homes Resolution Services Act – quick, and facilitated resolution or adjudication of claims – are just as appropriate for the claim which Mr & Mrs Osborne had against the council as at 14 February 2007 as they would have been if the claim had been initiated 6 months earlier (and thus prior to the final inspection of the house)

(c)  The informality & ex parte nature of the eligibility assessment procedures and the absence of any intra-statute mechanism for challenge by a respondent (meaning that any such challenge can only be by way of judicial review) suggests that section 14(a) was not meant to confer substantive rights on respondents

(d)  Unless section 37 is of general application, section 14(a) will operate as a trap for lay people, as illustrated by the result for the Osbornes contended for by the council. As we have noted, they sought an assessor’s report at a time when their claim against the council was still within the long-stop limitation period but, by 29 June 2007, when they were notified that the claim was ineligible, the 10-year long-stop limitation period had elapsed

(e)  For those reasons there is no plausible legislative purpose which such an interpretation gives effect to. Indeed, it is inconceivable that those responsible for the drafting of the Weathertight Homes Resolution Services Act could have intended such a result

(f)  The interpretation is inconsistent with the legislative history and what we take to be the purpose of maintaining consistency with the 10-year long-stop provision in section 393 of the Building Act.

“Against that background, it is clear that section 14(a) should be construed as operating only to exclude claims which are necessarily barred by section 393 of the Building Act, providing that this result can be reconciled with the statutory text. We consider that such reconciliation can be achieved.”

On the post-hearing settlement and the condition that the court not release a judgment, Justice Young said even if the settlement was unconditional and the parties had filed a discontinuance of the claim, it remained open to the court to release its judgment.

He said the approved questions raised when the Supreme Court granted the Osbornes leave to appeal “raised questions of public importance which were likely to affect people other than the Osbornes”. It was also apparent from the way argument went at the hearing that the court was likely to allow the appeal and “the public interest factors in favour of releasing the judgment outweigh the advantages to the Osbornes of allowing the settlement to become unconditional”.

The immediate outcome was that the Osbornes were awarded $25,000 costs for their appeal to the Supreme Court, costs on the judicial review proceedings in the High Court and on their appeal to the Court of Appeal – and a return to the tribunal to fight for their original claim.

Attribution: Judgment.

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Supreme Court rejects Pandey bid to continue scrap over running of liquidation

CP Asset Management Ltd (Prakash Pandey) has lost a Supreme Court bid to overturn a Court of Appeal judgment which reinstated the original court-appointed liquidators to another Pandey company.

Moteliers Brian & Bridgit Lawrence, now of Tauranga, got summary judgment for $1 million against NZ Properties Holding Ltd (director Charles Pandey, Mt Roskill, head of the Pandey/CP hotel group), weren’t paid and had the company wound up in 2012.

The claim arose from the state of a building the Lawrences leased from the Pandey group and the consequent effect on their business. The Rotorua motel flooded 51 times in 5 years and went out of business in 2008.

Damien Grant & Steven Khov (Waterstone Insolvency) were appointed liquidators of NZ Properties Holding, but CP Asset Management Ltd, listed as an NZ Properties Holding creditor, had the support of 5 related companies and another with the same registered office (the Pandey hotel group’s Queen St office) at a creditors’ meeting in August 2012 to oust Mr Grant & Mr Khov and replace them as liquidators with Arron Heath & Mike Lamacraft (Meltzer Mason Heath).

Justice Geoffrey Venning declined Mr Grant & Mr Khov’s application to set aside the creditors’ resolution and appointed Mr Heath & Mr Lamacraft in their place. The Court of Appeal reversed that decision on the basis that the resolution was contrary to the interests of unsecured creditors and was causing prejudice to the Lawrences.

The Supreme Court said in yesterday’s decision: “The Court of Appeal’s concern was that the creditors may not get an adequate investigation into the affairs of the company if the replacement liquidators remained in office and, in particular, that the possibility of recovery from the Pandey family would not be adequately investigated.

“Various transfers of assets over the period 2006-11 out of NZ Properties (then called CP Holdings Ltd) were outlined by the Court of Appeal. These had left the company without assets. The Court of Appeal noted that Justice Venning’s attention does not seem to have been drawn to these dispositions.”

The Supreme Court ruling went on to say that the difference between the lower courts’ decisions depended largely on a differing view of the facts: “There is thus no point of general, public or commercial significance. Nor is there the possibility of a miscarriage of justice.”

For their efforts, the Supreme Court made costs orders of $2500 in favour of Mr Grant & Mr Khov as liquidators, and secondly in favour of the Lawrences.

Attribution: Judgment.

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