P D STAITE and Others as trustees of the WHAOA NO 1 LANDS TRUST and Others v A M KUSABS and Others as trustees of the TUMUNUI LANDS TRUST and Others
| Jurisdiction | New Zealand |
| Judge | Christiansen |
| Judgment Date | 25 July 2013 |
| Neutral Citation | [2013] NZHC 1851 |
| Docket Number | CIV 2009-463-000888 |
| Court | High Court |
| Date | 25 July 2013 |
Under the Trustee Act 1956 and the Declaratory Judgments Act 1908 and the Land Transfer Act 1952
and
and
and
[2013] NZHC 1851
CIV 2009-463-000888
IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY
Application under r15.1 High Court Rules (dismissing or staying all or part of proceeding) to strike out the plaintiff's first amended statement of claim — dispute over lease of Maori land owned by the plaintiff, the Whaoa Trust — allegation chairman of two trusts (Whaoa Trust and Tumunui Trust) breached his fiduciary duty to ensure that his duty as trustee of both did not cause any conflict of responsibilities — alleged he arranged for Tumunui to take the lease in circumstances which favoured one and disadvantaged Whoa — declaration sought that chairman had breached his fiduciary duty to the beneficiaries of the Whaoa Trust and sought to have the Tumunui lease set aside as a breach of the Rule against Self-dealing — doctrine of laches, whether claim was barred by s4 Limitation Act 1950 (limitation of actions of contract and tort, and certain other actions) — whether or not the defence of laches was only suitable for consideration at trial and not on an interlocutory application for strike out where the only evidence for consideration was affidavit evidence.
M McKechnie for the Applicants/Defendants
D Chesterman for the Plaintiffs/Respondents
JUDGMENT OF ASSOCIATE JUDGE Christiansen
This judgment concerns the defendants' application for strikeout of the plaintiffs' first amended statement of claim.
The proceeding was initially filed on 17 December 2009. It was an 8 page document comprising 40 paragraphs and contained a single cause of action of an alleged breach of the Rule against Self-dealing.
The named plaintiffs were noted as being trustees of the Whaoa No.1 Lands Trust (the Whaoa Trust) and the Ngati Whaoa Maori Reservation, and Mr P D Staite. The defendants were named trustees of the Tumunui Lands Trust.
On 19 July 2012 the plaintiffs filed an application for leave to file an amended statement of claim, to add new defendants, and to remove and add a second plaintiff.
The proposed amended statement of claim was a 41 page document comprising 161 paragraphs and containing six causes of action.
The application to leave to file the amended statement of claim was opposed.
My judgment upon that application issued on 14 December 2012. It reviewed a not uncomplicated history of issues now emerging concerning the lease by the Tumunui Trust of Maori freehold land owned by the Whaoa Trust for 42 years from 1 June 1990. When the Tumunui Trust took over the land in question from the previous tenant it converted its use from dry stock grazing to a dairy unit and had completed this by 1 June 1990 before the lease term began.
The leased land comprised part of the 529.8624 hectares owned by the Whaoa Trust. On 31 October 1985 the Maori Land Court made a recommendation that 174.0183 hectares of the said land be set aside as the Whaoa Reserve for the purposes of a timber reserve, catchment area and a place of historical interest for Ngati Whaoa. On 17 February 1986 that reserve land was set apart by Gazette notice.
From 1964 the balance of the land (i.e. that which was not eventually set aside as a reserve) comprising approximately 355.72 hectares was leased by a Mr Mills, through his company, for dry stock grazing.
In October 1985 and, the Court assumes, as a precursor to the events formalised by the aforesaid orders of the Maori Land Court, the Whaoa Trust and Mr Mills entered into a partial surrender of the leased area whereby occupation of an area of 174.0185 hectares was surrendered.
Mr Kusabs a trustee of the Tumunui Trust deposes the Trust was informed that Mr Mills wished to quit his lease of the Whaoa Land. In discussions that followed Tumunui reached a settlement to acquire Mr Mills lease in early 1989. Mr Kusabs said it was understood that the consent of the Whaoa Trust would be required to any assignment of the lease. Mr Kusabs says extended discussions between the trustees of Tumunui and Whaoa Trusts then occurred. Both trusts were at that time represented by experienced lawyers. In that process the Whaoa Trust instructed surveyors to undertake a land survey for the purpose of defining the area to be leased by the Tumunui Trust. In the plan prepared the surveyors depicted the Whaoa Reserve as comprising 158.1600 hectares, that being 15.8583 hectares less than the area of land set aside when the partial surrender of lease occurred in 1986.
On 16 November 1992 the trustees of both Trusts agreed on the terms and conditions for a new lease. A deed of lease (the Tumunui lease) was completed on 16 February 1994 and on 23 June 1994 that lease was registered. The Tumunui lease includes those 15.8583 hectares of land which belongs as part of the Whaoa reserve.
The initial statement of claim pleads that at the time the Tumunui lease was negotiated Mr Edward Moke was the chairman and trustee of the Whaoa Trust and a trustee of the Tumunui Trust who owed a fiduciary duty to ensure that his duty as trustee of both did not cause any conflict of responsibilities. Contrary to the duties he bore it is pleaded that he arranged for the Tumunui Trust to take a lease of the land in circumstances which favoured Tumunui and disadvantaged Whaoa.
Relief sought by Whaoa included a declaration that Edward Moke had breached his fiduciary duty to the beneficiaries of the Whaoa Trust and to the beneficiaries of the Whaoa Reserve, and therefore a declaration was sought that the Tumunui lease be set aside as a breach of the Rule against Self-dealing.
The original proceeding had been set down for trial before leave was sought to file the amended statement of claim. In the meantime new counsel had been appointed to represent Whaoa.
By my judgment dated 14 December 2012 I granted leave for the amended statement of claim to be filed on the basis of claims that new material had only recently been discovered by the plaintiffs which, together with the discovery already available, had enabled the plaintiffs to better plead causes of action. Also the new pleading attempted to distinguish the responsibilities of the present trustees from the defendant trustees involved when Tumunui took over their lease. As well, the estate of Mr Edward Moke was separately joined. Mr Moke died in 2003.
Regarding the addition of causes of action counsel for the plaintiff submitted it was appropriate to add a pleading of a breach of trustees duties in the alternative to a pleading of breach of fiduciary duty; that a new pleading of undue influence was a “natural legal extension which recognised the controlling power that Mr Moke had within the plaintiff trust…”; and that a new pleading of knowing receipt/unjust enrichment arises from the newly discovered documents showing, it is claimed, that Mr Moke worked for the Tumunui Trusts interests by failing to provide complete information to his co-trustees of the Whaoa Trust. New causes of action under ss 80 and 81 of the Land Transfer Act 1952 arose, counsel submitted, because of the recently discovered documents which provided the necessary information showing how the loss of the 15.8385 hectares strip came about. Finally, a new cause of action relating to an alleged breach of right-of-way over the leased land to access the Reserve arises because of new factual allegations in relation to the issues involved.
The defendants opposed leave to file the amended statement of claim. In large part I agreed with criticism of the plaintiffs claim and it's pleading. The heart of the claims are assertions that Mr Moke controlled the decisions made by the two trusts but no particulars were given about how that control was alleged to have been made or how it was claimed any undue influence was said to have been exercised. No particulars were provided of the claim that Mr Moke was the controlling decision maker within the Whaoa Trust. I considered the barest of connection could be made out to link the allegations against Mr Moke with suggestions that those were causative of the signing of the lease by the two trusts. Both trusts were in receipt of legal advice at the time.
Suggestions in the plaintiffs proceedings criticising the actions of Mr Kusabs an accountant who was for a time the auditor of the Whaoa Trust, are not supported by particulars at all. Indeed it appeared there was a considerable gap between vague suggestions of influence or actions done and the pleading of particulars in support.
Also Mr McKechnie drew the Court's attention to a dispute in 2011 when the Whaoa Trust gave notice of multiple alleged breaches of lease. In the judgment of Barry Paterson QC after the arbitration that followed he noted that although the lease was not signed...
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