Proprietors of Wakatu v Attorney-General

JurisdictionNew Zealand
CourtCourt of Appeal
JudgeHarrison,French JJ,Harrison J
Judgment Date19 December 2014
Neutral Citation[2014] NZCA 628
Date19 December 2014
Docket NumberCA436/2012

[2014] NZCA 628

IN THE COURT OF APPEAL OF NEW ZEALAND

Court:

Ellen France, Harrison and French JJ

CA436/2012

BETWEEN
Proprietors Of Wakatū
First Appellant
Rore Pat Stafford
Second Appellant
Rore Pat Stafford, Paul Te Poa Karoro Morgan, Waari Ward-Holmes And James Dargaville Wheeler As Trustees Of Te Kōhui Ngahuru Trust
Third Appellants
and
Attorney-General
Respondent

and

Ngāti Rārua Iwi Trust And Ngāti Kōata Trust
Interveners
Counsel:

A R Galbraith QC, K S Feint and K C Johnston for Appellants

D J Goddard QC, J R Gough and J M Prebble for Respondent

T J Castle for Interveners Ngāti Rarua Iwi Trust and Ngāti Kōata Trust

Appeal against the High Court's dismissal of claims against the Crown for breaches of trust and fiduciary duty — appellants said that under an 1845 grant of land, the Crown agreed to reserve one-tenth of the land for reserves for Maori — argued that the circumstances of the grant gave rise to private trust and equitable obligations on the part of the Crown and that there had been breaches of those obligations which the appellants could enforce — whether there was standing to bring the claims — whether there was a breach of fiduciary duty — whether there were limitation and/or laches defences.

The issues were: whether there was standing to bring the claims; whether there was a breach of fiduciary duty; whether the land was held on a resulting or constructive trust; and whether there were limitation and/or laches defences.

Held: In the context of the claims based on a private law trust, the problem for Wakatu in terms of standing was, as the Crown submitted, that a stranger to a trust could not bring a claim to enforce the trust. The appellants relied on the fact that under s250 TTWMA (Effect of order), the effect of making of an order incorporating the owners of land was that the incorporation held the land and other assets on trust for the incorporated owners in proportion to their several interests in the land. The vesting did not affect the beneficial interests in the land which remain vested in the several owners.

However, while Wakatu had as its members a number of persons who were beneficiaries and so not strangers to the purported trust, it was a separate legal entity that did not itself possess the requisite standing. For similar reasons, Wakatu's argument that as successor trustee it could sue its predecessor (the Crown) for breach of trust, had to be rejected. The two trusts were not the same. Rather, on analysis, the claim was really one that Wakatu should be a trustee of a bigger pool of assets.

As to the claim of fiduciary duty, as the claim was advanced, any equitable duty owed would be to the collective, customary, owners. There was a clear difference between Wakatu and the interveners about the place of the iwi trusts and that of hapū and whanau. It was not possible to resolve questions about to whom the Crown's obligations were owed in this case. There was a group who had claims who were not represented by Wakatu.

A relaxed approach to standing was evident in legal contexts that were amenable to testing matters engaging public or national interests, such as declaratory relief and judicial review. But there was a distinction between cases of this kind and those involving purely private individuals or claims. Wakatu's claim, albeit arising in the context of the Treaty of Waitangi and relying on it in a general contextual way, was not based on the Treaty. The fiduciary duty alleged was private in character and to seek its enforcement, there had to be an interest in the duty allegedly breached. In this context, the rationale for the various rules about standing were applicable.

Contrary to the HC decision, the second appellant had standing to bring the appeal in respect of the fiduciary claims as rangatira and member of at least part of the relevant customary collective. He was one of the two who lodged the initial claim to the Tribunal in relation to the Nelson Tenths, Wai 56. In his evidence to the Tribunal, he said that claim was not lodged on behalf of Wakatu “as such” on behalf of the descendants of all the original owners”. Because of the customary authority associated with his status it was not necessary for him to obtain a representative order before he could assert that authority in the proceeding.

The appeal was allowed in part to the limited extent that the second appellant had standing to bring this proceeding.

The existence of a fiduciary duty was not excluded by the Treaty relationship or the existence of other remedies. However any duty was based on the traditional fiduciary duty that might arise in circumstances where there was a duty of loyalty and an undertaking assumed in or implied from the instruments and circumstances relied on by claimants to protect their specific interests. While the Treaty was part of the factual context for the recognition of such a duty, it was not the basis for the claim of one.

As to the nature of the Crown's responsibilities, the point was simply that the Crown could be involved in relationships or obligations that were legal in nature. It was well accepted that the Crown could be in a position of trust in a legally enforceable sense.

As to the availability of other remedies, this militated against the refashioning of the requirements for a fiduciary duty and, in particular, against removal of the requirement for a duty of loyalty. But it did not tell against the possibility of a duty altogether. If there was no other remedy available for those in the position of the current appellants, that omission might well support a more flexible approach to fiduciary duty and the requirement of a duty of loyalty. But, as the present case demonstrated, there were avenues of redress available and, moreover, they had borne fruit in the settlement that had been reached. In the circumstances, the claim for fiduciary duty was one that needed to demonstrate loyalty as that term was traditionally understood.

In this case, the arrangements made reflected agreements of a political nature which were to be realised in legislation. Over the relevant period, the Crown was also balancing the various interests so the duty of loyalty was not established. The appellants had not shown that they were owed a fiduciary duty.

In respect of the express trust argument, The HC's factual findings based on an assessment of the various instruments and the context were correct. The requisite certainty of intention was absent. Further, there was no certainty of subject or objects.

It was not possible to address issues of defences of laches/excessive delay and bar by analogy without establishment of the facts giving rise to liability in any meaningful way. In terms of laches, there was no merit in the argument made by the appellants that they could rely on the “continuing violation doctrine”, as it was inconsistent with the way in which the appellants' case had been presented, which relied on a specific time frame and specific documents.

The present claims did not fall within either s21(1)(a) or s21(1)(b) Limitation Act 2010. Section 21 provided for a six year time bar for claims for breach of trust unless either there was fraud to which the trustee — here purported to be the Crown — was a party or recovery from the Crown of trust property held by the Crown or the proceeds of such property received by the Crown were dealt with for the Crown's own benefit. The issues raised by the application of these two exceptions were however heavily factually dependent and the Court should not address them.

The absence or otherwise of prejudice was relevant to whether laches/excessive delay applied. The Crown had not shown prejudice

The basis for implying an analogous time bar was that the equitable claim was sufficiently analogous to the statute-barred claim to make it inequitable to allow it to proceed. Significantly, the Court also foreshadowed that there might be “policy or other reasons” militating against the case for applying the bar by analogy

Per Harrison and French JJ: Wakatu's claim had to be approached within the framework of the orthodox exposition of settled equitable principles. It did not require a deviation from or development of settled principles. In the context of relationships with the Crown, the loyalty requirement posed obvious difficulties. The Crown's principal obligation was to all its citizens in whose collective interests the Crown had to act. It followed that, in the absence of an express undertaking, implicit acceptance of an absolute duty of loyalty to one group alone would negate an essential element of the Crown's constitutional responsibilities. Such cases would be rare. In exercising its constitutional responsibilities here, the Crown was balancing interests of a truly competing nature,

Without a requirement of loyalty, the relationship could not be properly characterised as one of absolute trust and confidence. In particular, its absence would defy equity's requirement of a fiduciary to eschew self-interest when the circumstances require.

In claiming the Crown agreed to act as a fiduciary in a private law capacity from 1840 onwards by assuming the New Zealand Company's role and conscience as trustee relating to the creation and management of the Tenths Reserves, Wakatu was simply recasting or restating the essential elements of its claim for an express private trust.

It was unnecessary and wrong both for doctrinal and policy reasons to strain settled legal principles in order to find a remedy where Parliament had by the Treaty of Waitangi Act 1975 established a mechanism to recognise and provide remedies for Treaty breaches by the Crown. The Treaty was the primary instrument governing relationships between the Crown and Māori. In recognition of the Treaty's status as the source of the Crown's duties, both legal and moral, and its breaches of those duties, the Waitangi Tribunal had been established to...

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3 cases
  • Rore Pat Stafford v Accident Compensation Corporation
    • New Zealand
    • Court of Appeal
    • 15 May 2020
    ...breach of fiduciary obligation claim (which is not focused on the ACC land) is drawn from the Supreme Court's judgment in Proprietors of Wakatu v Attorney-General, particularly the reasons of Elias CJ who set out the historical background in considerable detail. 5 In 1839, William Wakefield......
  • Williams v Auckland Council
    • New Zealand
    • Court of Appeal
    • 9 October 2015
    ...[1983] NZLR 280 (CA) at 292, citing Nwakobi v Nzekwu [1964] 1 WLR 1019 (HL) at 1026. See also Proprietors of Wakatu vAttorney-General [2014] NZCA 628, [2015] 2 NZLR 298 at 79No. 68 Ltd (CA), above n 77, at [50], citing Neylon v Dickens [1987] 1 NZLR 402 (CA) at 407; Wellington City Council......
  • Proprietors of Wakatū & ORS v ATTORNEY-GENERAL
    • New Zealand
    • Supreme Court
    • 8 May 2015
    ...for leave to appeal the judgment of the Court of Appeal delivered on 19 December 2014 in Proprietors of Wakatū v Attorney-General [2014] NZCA 628, 2 NZLR 298 is granted. B The cross-application by the respondent for leave to appeal against the finding of the Court of Appeal that the second ......

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