John Hanita Paki and Others v Attorney-General of New Zealand for and on Behalf of The Crown

• Jurisdiction: New Zealand
• Judge: Elias CJ,McGrath J,William Young J,Glazebrook J
• Judgment Date: 29 August 2014
• Neutral Citation: [2014] NZSC 118
• Docket Number: SC 7 /2010
• Court: Supreme Court
• Date: 29 August 2014

BETWEEN

John Hanita Paki, Toriwai Rotarangi, Tauhopa Te Wano Hepi, Matiu Mamae Pitiroi and George Mongamonga Rawhiti

Appellants

and

Attorney-General of New Zealand for and on Behalf of the Crown (“The Crown”)

Respondent

Mighty River Power Limited

First Intervener

The Proprietors of Wakatu; Rore Pat Stafford; and Rore Pat Stafford, Paul Te Poa Karoro Morgan, Waari Ward-Holmes, and James Dargaville Wheeler as Trustees of the Te Kahui Ngahuru Trust

Second Interveners

[2014] NZSC 118

Court:

Elias CJ, McGrath, William Young, Chambers* and Glazebrook JJ

SC 7 /2010

IN THE SUPREME COURT OF NEW ZEALAND

Counsel:

I R Millard, QC M P Armstrong and M S Smith for Appellant

V L Hardy and D A Ward for Respondent

J E Hodder QC and L L Fraser for First Intervener

B W F Brown QC and K S Feint for Second Interveners

• A The appeal is dismissed.

• B No order for costs is made.

JUDGMENT OF THE COURT

REASONS

	Para No.
Elias CJ	[1]
McGrath J	[168]
William Young J	[198]
Glazebrook J	[314]

Elias CJ

1 The appellants claim on behalf of descendants of members of the hapu of Ngati Wairangi, Ngati Moe, Ngati Korotuohu, Ngati Ha, Ngati Hinekahu and Ngati Rakau who were awarded interests in land subdivided from the Pouakani block along the left bank of the Waikato River, by the Native Land Court in the late 19th century. Pouakani No 1 was vested immediately in the Crown by the Native Land Court for payment of survey and other costs on its partition from the larger Pouakani block in 1887. The remaining subdivisions were reinvestigated in 1891 following petitions by a number of hapu and chiefs who claimed to have been wrongly excluded or included in the wrong capacity in the titles. Following reinvestigation, Pouakani B8, B10, and C3 were purchased by the Crown from the Maori owners in 1892. Pouakani B6, which had been awarded to 242 owners, was subject to further subdivision in 1899, when the Crown failed to obtain the agreement of all owners to sale. Pouakani B6A was vested in the Crown when the Crown applied to the Native Land Court to award it a defined portion of B6 equal to the proportion of interests it had acquired. 1 Pouakani B6A encompassed the northern half of B6, and took in the entire river frontage of B6 with the exception of B6E in

the extreme east of the block, which was vested in Werohia Te Hiko of Ngati Wairangi, with a restriction on alienation. 2

2 At the time of the purchases in 1892 the Crown was effectively a monopsony purchaser. 3 At the time of the purchases in 1899 a statutory monopsony was in place. 4

3 The appellants asserted in the High Court that the vesting of Pouakani No 1 and the Crown acquisitions of the other riparian blocks gave the Crown ownership of the bed of the river to the middle of the flow (“ usque ad medium filum aquae”), by operation of a conveyancing presumption of English common law. They claimed that, in taking advantage of this common law presumption which could not have been understood by the Maori vendors and which was not explained to them, the Crown breached fiduciary or equitable duties of disclosure and fair dealing to the Maori vendors. They said that the owners would not have agreed to transfer of the riverbed land with the riparian lands conveyed to the Crown because the Waikato River was essential to their identity and was an important tribal property valued for its spiritual qualities as well as for the sustenance provided by the food resources obtained from it. The appellants sought in the High Court a declaration that, “to the extent the Crown has claimed ownership of the riverbed of the Waikato River adjacent to the Blocks” under the presumption that a conveyance of riparian land carries the land to the middle of the stream, “the Crown holds such riverbed of the Waikato River as constructive trustee” for the descendants of the original owners.

4 For its part, the Crown asserts its ownership of the riverbed. Its pleadings claim that, “to the extent that the [river] … is navigable”, it was vested in the Crown by s 14 of the Coal-mines Act Amendment Act 1903 (a provision re-enacted in the Coal Mines Act 1979 and now found in s 354(1)(c) of the Resource Management Act 1991). Counsel for the Crown in this Court acknowledged that the Coal-mines

Act Amendment Act vesting was the basis upon which the Crown has relied for its ownership in recent times, as is confirmed by the two land transfer titles which have been issued in relation to discrete parts of the riverbed. They refer to the land as Crown land pursuant to s 261 of the Coal Mines Act 1979 (the successor to s 14 of the Coal-mines Act Amendment Act 1903). It was accepted by the appellants that if the Crown was correct in its contention that the land was vested in it by statute, the claim based on breach of fiduciary duty could not succeed because it was overtaken by the legislation, which provides that the beds of all navigable rivers “shall remain and shall be deemed to have always been vested in the Crown”. (Whether this vesting applied to Maori customary land was doubted by Cooke P in Te Runanganui o Te Ika Whenua Inc Society v Attorney-General5 but is not in issue in this appeal.)

5 The Crown also pleaded by way of defence to the claim of breach of fiduciary and equitable duties that, “to the extent that the Waikato River between Atiamuri and the Waipapa River is non-navigable”, the Crown acquired title to the bed “by the principle of ad medium filum”. It denied that it owed any fiduciary duty to the vendors in acquiring the riverbed in accordance with the presumption that it was obtained with acquisition of the riparian land and in any event denied that it was in breach of any fiduciary or equitable duties. It also pleaded that the claim is barred by lapse of time under the Limitation Act 1950 and under the equitable doctrine of laches and acquiescence.

6 The Crown was successful in its contention that the Waikato River was navigable and that the riverbed had vested in the Crown by virtue of the Coal-mines Act Amendment Act in both the High Court 6 and the Court of Appeal. 7 It was unnecessary in those circumstances for the Courts below to resolve finally whether any duties owed by the Crown in the transaction were breached. Nor was it necessary to decide questions of remedy, including whether the claim was barred by the lapse of time. Despite this, Harrison J in the High Court went on to consider the

claim to breach of fiduciary duty in case on appeal his decision on application of the statutory vesting was not upheld.

7 Harrison J expressed the view that the claim based on breach of duties said to be owed to the vendors by the Crown could not succeed because it depended on a right to the riverbed that was severable from the riparian lands, a conclusion he considered to be excluded by the decision of the Court of Appeal in 1962 in Re the Bed of the Wanganui River8 as a matter of Maori custom. 9 Even if Maori enjoyed a discrete customary right to the riverbed, he considered that right was extinguished by order of the Native Land Court when giving title and not by the subsequent act of acquisition. 10 Beyond this, he did not further consider whether the Crown owed the Pouakani vendors duties of good faith or in the nature of fiduciary obligations and whether, if so, they were breached. He did however go on to indicate the view that the relief of a remedial constructive trust would be barred by lapse of time both under the Limitation Act 1950 and by the equitable doctrine of laches. 11

8 The Court of Appeal, while not coming to a concluded view, indicated some doubts about the nature of the claim for breach of fiduciary duty and raised whether the claim might be better expressed as based on a “relational duty of good faith”. 12 It expressed the view that the relief of a remedial constructive trust, sought by the appellants, would not be available, however, because of the overlapping interests that had arisen in relation to the river over the past century. 13 It did not find it necessary to deal with the question of limitation or laches. 14

9 On application by the appellants for leave to appeal to this Court, it was decided that we should first hear the appeal against the determinations in the Courts below that the river was navigable and that the lands had vested in the Crown by

operation of statute. 15 Leave was granted in relation to four additional points identified in the Court's leave judgment, but their hearing was deferred until the judgment of the Court on the navigability question was delivered. 16

10 The majority decision of the Court that the river was not navigable in these reaches and that the riverbed land did not vest under the Coal-mines Act Amendment Act 17 made it necessary to hear argument on the additional appeal points, upon which leave to appeal had first been granted by judgment of 21 July 2010. They are:

• (iii) … [D]id the Crown acquire title to the claimed part of the riverbed through application of the presumption of riparian ownership ad medium filum aquae by reason of its acquisition of the riparian lands?

• (iv) If so, in the circumstances in which the Crown acquired the claimed part of the riverbed, was it in breach of legally enforceable obligations owed to the owners from whom title was acquired?

• (v) If so, have the [appellants] lost their right to enforce such obligations by reason of defences available to the Crown through lapse of time?

• (vi) If not, what relief is appropriate?

Why the appeal should be dismissed

11 It is necessary for me to explain in some detail why I take the view that the outcome of the claim is not determined by application of the decision of the Court of Appeal in 1962 in Re the Bed of the Wanganui River. Because that explanation requires lengthy discussion of the case and its background, I start with the reasons why I consider...