in the high court of new zealand wellington registry … · 20 mitchell v r [1896] 1 qb 121; dunn v...
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ACCIDENT COMPENSATION CORPORATION v STAFFORD [2018] NZHC 218 [22 February 2018]
IN THE HIGH COURT OF NEW ZEALAND
WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA
TE WHANGANUI-Ā-TARA ROHE
CIV-2018-485-000047
[2018] NZHC 218
UNDER
The Land Transfer Act 1952 and Part 19 of
the High Court Rules
IN THE MATTER OF
an application under s 143 of the Land
Transfer Act 1952 for an order that a caveat
be removed
BETWEEN
ACCIDENT COMPENSATION
CORPORATION
Applicant
AND
RORE PAT STAFFORD
Respondent
Hearing:
12 February 2018
Counsel:
D A Laurenson QC and R L Roff for Applicant
K S Feint and M S Smith for Respondent
D J Goddard QC and J R Gough for Attorney-General
Judgment:
22 February 2018
JUDGMENT OF COLLINS J
Summary of judgment
[1] The principal issue addressed in this judgment can be distilled to the following
question:
Does Mr Stafford have a reasonably arguable case that he has a caveatable
interest over the title to a property in central Nelson owned by the Accident
Compensation Corporation (ACC)?1
1 Referred to as the ACC property.
[2] The answer to this issue hinges upon how two sub-issues are resolved.
[3] The first of those sub-issues, which is addressed in Part II of this judgment, is
whether it is reasonably arguable that the ACC property may be applied towards
settling any Crown liabilities arising from the Wakatū proceeding,2 the scope of which
is explained in [30]–[49].
[4] The second sub-issue, which is the focus of Part III of this judgment, is whether
it is reasonably arguable Mr Stafford currently has a beneficial interest in the ACC
property, in order to maintain his caveat over the title to that property.
[5] I have concluded that in the context of this case, it is not reasonably arguable
Mr Stafford currently has a caveatable interest in the ACC property. I am, however,
allowing Mr Stafford’s caveat to remain in place until 22 March 2018 to enable
responsible Ministers to consider taking steps which may produce a solution that is
favourable to Mr Stafford.
[6] It is to be stressed this judgment, which has had to be issued urgently, has been
determined solely in the context of an application to remove a caveat, which is a very
unsatisfactory procedural mechanism when difficult and novel constitutional and legal
issues are engaged.
[7] Before addressing the issues I have summarised in [3]–[4], I shall, in Part I,
briefly set out the background to this proceeding by describing the parties, the effect
of the Supreme Court’s judgment in the Wakatū proceeding,3 the history to part of the
title to the ACC property, the law governing the removal of caveats and another case
in which the High Court upheld caveats lodged by interests associated with
Mr Stafford against Crown land in Nelson.
2 Proprietors of Wakatū v Attorney-General HC Wellington CIV-2010-442-181. 3 Proprietors of Wakatū v Attorney-General [2017] NZSC 17, [2017] 1 NZLR 423.
PART I
BACKGROUND
The parties
[8] Mr Stafford is a kaumātua of Ngāti Rārua and Ngāti Tama descent. He is the
second plaintiff in the Wakatū proceeding. Mr Stafford is supported by the Wakatū
Incorporation, a Māori Incorporation under Te Ture Whenua Māori Act 1993 that was
first incorporated by an Order in Council in 1977. Mr Stafford has led a team of
persons who may benefit from the Supreme Court’s decision in the Wakatū
proceeding. He was instrumental in the decision to caveat the title to the ACC
property.
[9] Because land is a “taonga tuku iho of special significance to Māori”,4
Mr Stafford’s focus is on returning the ACC property, and other lands in and around
Nelson, to those whom he maintains are the rightful owners.
[10] ACC is a Crown agent,5 a species of Crown entity defined in s 7 of the Crown
Entities Act 2004.6 There are five categories of Crown entities defined in the Crown
Entities Act. The first category comprises statutory entities that are bodies corporate
established by an Act.7 A statutory entity is “a legal entity separate from its members,
office holders, employees, and the Crown” (emphasis added).8 It continues to exist
until it is dissolved by an Act.9 There are three categories of statutory entities provided
for in the Crown Entities Act, namely Crown agents, autonomous Crown entities and
independent Crown entities.10 Crown agents “must give effect to government policy
when directed by the responsible Minister”.11 Crown entities are quite distinct from
other bodies that are connected to Government. For example, the State-Owned
4 Ririnui v Landcorp Farming Ltd [2016] NZSC 62, [2016] 1 NZLR 1056 at [43], citing from the
preamble Te Ture Whenua Maori Act 1993. 5 Crown Entities Act 2004, Schedule 1, Part 1. 6 Philip A Joseph Constitutional and Administrative Law in New Zealand (4th ed, Thomson Reuters,
Wellington, 2014) at 621; Te Heu Heu v Attorney-General [1999] 1 NZLR 98 (HC). 7 Crown Entities Act 2004, ss 7(1)(a) and 15. 8 Section 15(b). 9 Section 15(c). 10 Section 7(1)(a). 11 Section 7(1)(a).
Enterprises Act 1986 introduced a business model for the trading functions of
Government. A State-Owned Enterprise is a “creature”12 of the Crown that carries out
its commercial operations without being subject to direct ministerial control.
[11] ACC was created as a body corporate by the Accident Insurance Act 1998 and
continued to be a body corporate when the Accident Compensation Act 2001 was
passed.13
[12] The Accident Compensation Act 2001 is the fifth statute to have governed
New Zealand’s no-fault public accident compensation scheme (the scheme). The first
of those statutes was passed in 1972 and created the Accident Compensation
Commission as a statutory body, separate from the Department of Labour, which was
responsible for administering the Accident Compensation Act 1972. Since the
creation of the scheme, ACC and its earlier manifestations have been distinct legal
entities.
[13] The public nature of the scheme is evident in s 3 of the Accident Compensation
Act 2001, which refers to the purpose of that Act as being to enhance the public good
and reinforce the social contract represented by the Accident Compensation Act 1972
under which those injured by accident lost the opportunity to sue for personal injury
in exchange for comprehensive cover and compensation.
[14] The public nature of the scheme is also confirmed by the fact that two of the
accounts administered by ACC are funded, at least in part, by appropriations approved
by Parliament.14 All of ACC’s accounts are funded to varying degrees through returns
on ACC’s investments.
[15] The role of the Minister responsible for ACC (Minister) includes overseeing
and managing the Crown’s interest in, and its relationship with, ACC.15 Those
ministerial roles are discharged in a number of ways. For present purposes, it is
12 New Zealand Māori Council v Attorney-General [1994] 1 NZLR 513 (PC) at 520. 13 Accident Compensation Act 2001, s 259(1). 14 The Non-Earners Account and the Treatment Injury Account. Three other accounts are partially
funded by levies. 15 Crown Entities Act 2004, s 27(1).
sufficient to refer to the following three ways the Minister can assert control over the
ACC Board (the Board).
[16] First, the Minister plays a pivotal role in appointing members to the Board (by
making recommendations to Cabinet, which makes the appointment decision).16 The
Minister may determine the remuneration of Board members17 and he or she “may, at
any time and entirely at his or her discretion, remove a member” of the Board from
office.18 Members of the Board are accountable to the Minister for performing their
duties.19
[17] The power of the Minister to dismiss members of the Board, at will, is
reminiscent of the historic powers of the Crown when it employed its servants “at
pleasure”.20 The power of Ministers to dismiss members of boards of Crown entities
without cause provides Ministers with greater influence over members of the boards
of Crown entities than employees of the departments of the Public Service who have
the protections afforded by the Employment Relations Act 2000, the State Sector Act
1988 and contracts of employment.
[18] Second, through directing the Board to give effect to government policy so far
as it relates to ACC’s functions and obligations. Section 103(1) of the Crown Entities
Act provides:
103 Power to direct Crown agents to give effect to government policy
(1) The responsible Minister of a Crown agent may direct the entity to
give effect to a government policy that relates to the entity’s functions
and objectives.
Any direction given by the Minister to ACC under s 103 of the Crown Entities Act
must be complied with.21
16 Crown Entities Act 2004, s 28. 17 Section 47(1). 18 Section 36(1). 19 Section 26(2). 20 Mitchell v R [1896] 1 QB 121; Dunn v R [1896] 1 QB 116. 21 Crown Entities Act 2004, s 114.
[19] Section 103(1) of the Crown Entities Act is, however, subject to s 113 of that
Act, which puts in place safeguards to protect the independence of Crown entities. In
particular, s 113(1)(b) states that the Crown Entities Act does not authorise a Minister
to direct a Crown entity to perform or refrain from performing “a particular act, or the
bringing about of a particular result, in respect of a particular person or persons”.
Furthermore, no direction can be given under s 103 of the Crown Entities Act without
following the process of consultation between the Minister and ACC set out in s 115
of the Crown Entities Act.
[20] In addition to the powers of direction set out in s 103 of the Crown Entities
Act, the Minister of State Services and the Minister of Finance may jointly direct
Crown entities under s 107 of that Act “to support a whole of government approach
by complying with specified requirements” for a number of purposes, including the
management of “risks to the Government’s financial position”.22
[21] Mr Healy, a senior manager in ACC, annexed to his affidavit a letter from the
Hon Ruth Dyson, a former Minister for ACC. That letter was dated 28 September
2007 and appears to have been a direction given by the Minister to ACC concerning
the “disposal of Crown land”. Regrettably, the speed with which this case has been
presented has meant that the full background of the direction in question has not been
explored. On its face, the direction appears to have been given in the context of the
then Government’s “land of potential interest process”. That process required every
Crown agency to notify its responsible Minister when consideration was being given
to the disposal of “sensitive land”. The then Chief Executive of ACC wrote to the
Minister on 28 November 2007 saying that ACC would comply with the
Government’s “land of potential interest process”. That process was discontinued in
2009.
[22] Third, through the mechanisms of setting ACC’s “strategic direction and
performance expectations and monitoring [ACC’s] performance under [the Crown
Entities Act]”.23 The Minister’s role in setting ACC’s strategic direction and
performance expectations is achieved through the Minister providing letters of
22 Crown Entities Act 2004, s 107(1)(e). 23 Section 27(1)(f).
expectation to the Board and the Board providing the Minister with its statement of
intent, the purpose of which includes “enabling the Crown to participate in the process
of setting [ACC’s] strategic directions and medium term undertakings”. Examples of
ACC’s strategic directions include assurances in its current statement of intent “to
support the Crown in its Treaty of Waitangi relationships and deliver [its] services in
ways that enable equitable outcomes for Māori”.24
[23] Although ACC is subject to a degree of oversight and control by Ministers, the
Crown is not liable to contribute to the payment of any debt or liability of ACC.25
ACC’s independence is reflected in the fact that it can “do anything that a natural
person of full age and capacity may do [for the purpose of performing its functions]”,26
including borrowing, giving security, issuing indemnities,27 entering into contracts and
other enforceable obligations,28 and bringing an action to defend its rights or enforce
its agreements.29
[24] ACC discharges most of its roles through its Chief Executive, who is appointed
by the Board in consultation with the Minister and the State Services Commissioner.30
[25] One of ACC’s important roles concerns the management of investments, which
assumed particular significance when, in 1999, the Government changed the scheme
to a fully-funded model. This means ACC must receive sufficient money each year to
cover the full lifetime costs of every claim that occurs in that year. ACC’s returns on
its investments contribute towards the future costs of claims incurred by clients
suffering long-term injuries. ACC’s investment portfolio is significant. As at
31 March 2017, the investment portfolio was worth $36.9 billion.
[26] Section 275 of the Accident Compensation Act sets out ACC’s broad
investment responsibilities. The relevant parts of that section provide:
24 Statement of Intent 2015-2019 (Accident Compensation Corporation, 23 June 2015) at 29. 25 Public Finance Act 1989, s 49. 26 Crown Entities Act 2004, ss 17 and 18. 27 Accident Compensation Act 2001, s 276. 28 Crown Entities Act 2004, s 127. 29 Accident Compensation Act 2001, s 248(2)(a); Crown Entities Act 2004, s 59(3). 30 Accident Compensation Act 2001, sch 5, cl 17; Crown Entities Act 2004, s 117.
275 Investments
(1) Subject to any policy direction under section 103 of the Crown
Entities Act 2004, the Corporation must invest, in the same manner as
if it were a trustee, all money received by it in respect of any Account
that is not immediately required for expenditure.
(2) Any returns on investments must be apportioned across the Accounts
in a way that reasonably represents the contribution to the investment
of each Account.
(3) The Minister must consult with the Minister of Finance before making
a policy direction under section 103 of the Crown Entities Act 2004
relating to investment.
…
[27] Although the Minister may give an investment policy direction to ACC, the
day-to-day investment decisions of ACC are undertaken by a specialist investment
team operating under the delegated authority of the Board Investment Committee.
[28] All of ACC’s assets are held in the name of ACC and accounted for in its annual
financial statement.31 Land owned by ACC, including property purchased as part of
its investment portfolio, is registered in the name of ACC, including the property that
is the subject of the present application.
[29] Although ACC’s investment properties are held in its name, all of its assets,
including its investment properties, are incorporated into the Crown’s consolidated
accounts. Section 27(3) of the Public Finance Act requires the annual financial
statements of the Government to include the “Government reporting entity’s interests
in … all Crown entities”.32
The Wakatū proceeding
[30] Mr Mokena, the Chair of Wakatū Incorporation, has explained in an affidavit
that the first arrangements between The New Zealand Company (the Company) and
rangatira in Te Tau Ihu o Te Waka-a-Māui concerning the acquisition of land by the
31 Accident Compensation Act 2001, s 278. 32 Government reporting entity is defined in s 2 of the Public Finance Act 1989 to mean–
(a) the Sovereign in right of New Zealand; and
(b) the legislative, executive, and judicial branches of the Government of New Zealand.
Company in the Tasman-Golden Bay area occurred in 1839. Those arrangements pre-
dated the Crown acquiring sovereignty in New Zealand.
[31] The Crown proclaimed sovereignty over New Zealand on 14 January 1840.
The following year an Ordinance was issued that declared all previous purchases of
land from Māori null and void unless confirmed by the Crown.33
[32] The Company intended to give effect to its agreement with Māori by setting
aside, amongst other areas, 100 one-acre allotments in central Nelson that were
surveyed in April 1842. The 100 one-acre allotments included section 443, half of
which now forms part of the ACC property. The Company also intended to set aside
lands in suburban Nelson, Motueka and Moutere.
[33] Mr William Spain was appointed as a Commissioner to investigate the
purchases of land by the Company. In 1845, he concluded the purchases in and around
Tasman and Golden Bay had been equitable and determined a grant of 151,000 acres
be made to the Company that was to include 11,000 acres in the Nelson district that
had already been surveyed (the Spain award). Of crucial importance was that the
Spain award provided for one-tenth of the total area (15,100 acres) to be set aside as a
reserve for Māori (the tenths reserve).
[34] In 1845, the Crown issued a grant to the Company, excluding the 100 one-acre
allotments to Māori in central Nelson. A number of issues emerged, however,
concerning the Crown grant. Some of the suburban and all of the rural area that the
Company intended to set aside had not been surveyed and some reserve land was
found to include lands occupied by Māori that should have been excluded from the
reserve allotments. The Company refused to accept the grant because by this stage it
believed it needed more land for the Nelson settlement.
[35] In 1848, the Crown issued another grant, which was accepted by the Company.
In the meantime, Governor Grey had agreed to a re-distribution of some of the one-
acre allotments in central Nelson so that by 1848 there remained just 53 one-acre
allotments in central Nelson reserved for Māori. Section 443 continued to form part
33 Land Claims Ordinance 1841.
of the land reserved for Māori. Also by this time, the Crown had taken possession of
the land set aside for Māori and proceeded to administer it. In July 1850, the Company
surrendered all of its remaining assets to the Crown.
[36] It is part of Mr Stafford’s case that, by 1850, the Company’s Nelson settlement
comprised approximately 172,000 acres but the Nelson tenths reserve was just 3,953
acres (excluding designated occupation reserves).
[37] A series of Acts were passed, starting in 1856, which formalised the
administration of reserve land under the control of the Crown in the Nelson area. In
1882, another Act was passed that vested in the Public Trustee all of the reserve land
on behalf of those Māori who were held to have beneficial interests in that land. By
this time, the tenths reserve comprised approximately 2,774 acres of the original 5,100
acres that were meant to have been reserved in 1845. In 1892, the Native Land Court
identified 253 beneficiaries of the reserve land. In due course, the Māori Trustee
replaced the Public Trustee as the trustee of these lands.
[38] In 1997, an entity called The Proprietors of Wakatū Inc was established to
represent the descendants of the beneficiaries of lands that were reserved, or should
have been reserved, for Māori. By this time, the residue of the reserved land
comprised just 1,626 acres.
[39] In 1986, Mr Stafford and others filed a claim with the Waitangi Tribunal which
reported in 2008 that there had been a number of breaches of the Treaty of Waitangi
in relation to the lands reserved for Māori in the Nelson region.34 The Crown
responded by signing deeds of settlement with the local iwi. That settlement
culminated in a claims settlement Act in 2014.35 The claims settlement Act, however,
did not address all of the concerns of Mr Stafford and others concerning the
unallocated and lost reserve lands (the “shortfall”).
34 Waitangi Tribunal Te Tau Ihu o te Waka-a-Māui: Report on Northern South Island Claims
(Wai 785, 2008). 35 Ngāti Kōata, Ngāti Rārua, Ngāti Tama Ki Te Tau Ihu, and Te Ātiawa o Te Waka-a-Māui Claims
Settlement Act 2014.
[40] The Proprietors of Wakatū and Mr Stafford commenced proceedings in the
High Court in 2010, claiming the Crown breached its duties as a trustee and fiduciary
duties to the customary owners of the land within the area covered by the Spain award
when it failed to reserve the full allotment that Commissioner Spain had set aside for
Māori.
[41] The third amended statement of claim in the Wakatū proceeding identifies six
causes of action. The essential features of the claim allege the Crown is liable to the
plaintiffs for failing to ensure during the 1845 to 1850 period that the tenths reserve
comprised the full entitlement of 15,100 acres set out in the Spain award.36 It is alleged
that “between 1845 and 1849 the Crown significantly reduced the Nelson tenths
reserves, by removing sections from the existing estate, and further deciding not to
create rural tenths reserves at all”.37
[42] The plaintiffs allege that the Crown had a duty as a trustee and or fiduciary to
ensure that 15,100 acres were reserved from the Crown grant for the Nelson tenths
reserve (together with occupation reserves). The shortfall between the 15,100 acres
set out in the Spain award and the amount actually reserved for Māori is 11,147 acres.
It is pleaded that “the Crown either still holds the shortfall on trust for the tenths’
owners, or, in breach of trust, has converted the shortfall to its own use or sold or gifted
the land to others”.38
[43] No claim is made in the pleadings in relation to the 53 one-acre sections that
were in fact reserved for Māori in Nelson, and were not disposed of prior to vesting in
the Public Trustee in 1882. I will return to that aspect of the case in [89]–[92].
[44] In the High Court, Clifford J dismissed the plaintiffs’ causes of action.39 In
summary, Clifford J concluded the plaintiffs, including Mr Stafford, lacked standing
and that there had been no breach of trust or fiduciary duty on the part of the Crown.
Appeals to the Court of Appeal resulted in findings that Mr Stafford had standing to
36 There is also a claim for an “uplift” to reflect the increase in the size of the lands actually acquired
by the Company and or the Crown in the Nelson area. It is not, however, necessary to refer further
to that aspect of the claim in this judgment. 37 Third Amended Statement of Claim at [54]. 38 At [83]. 39 Proprietors of Wakatū Inc v Attorney-General [2012] NZHC 1461.
bring a claim for breach of fiduciary duty but the other plaintiffs lacked standing. The
Court of Appeal unanimously concluded the Crown owed no fiduciary duty to
Mr Stafford or those whom he represented and that the Crown was not a trustee of the
tenths reserve. Mr Stafford and the other plaintiffs appealed to the Supreme Court.
[45] The essential conclusion of the majority of the Supreme Court was “that the
Crown owed fiduciary duties to reserve 15,100 acres for the benefit of the customary
owners and, in addition, to exclude their pā, urupā and cultivations from the land
obtained by the Crown following the 1845 Spain award”.40
[46] The majority of the Supreme Court was satisfied that, in 1842, 5,100 acres of
land was reserved for Māori, comprising 100 one-acre town lots in Nelson and 100
50-acre lots in Motueka and Moutere. The Supreme Court was satisfied that not all of
this land was in fact retained for Māori and directed the High Court determine the
extent of the lands that should have been but were not reserved for Māori. The
Supreme Court was satisfied that the remaining 10,000 acres in the area covered by
the Spain award were never reserved for Māori – a fact acknowledged by the Crown.
[47] The Supreme Court held that by accepting Commissioner Spain’s award,
customary title was extinguished in relation to the 151,000 acres purchased by the
Company. When this happened the Crown:
(1) held the land actually reserved for Māori in 1842 on trust for the Māori
customary owners; and
(2) held, in relation to the “shortfall” that should have been reserved for
Māori, an equitable obligation with respect to the remainder of the land
in the area covered by the Spain award.
[48] The Supreme Court determined Mr Stafford’s claim could proceed in the High
Court on the basis he was seeking to recover from the Crown, trust property in its
possession. His claim was therefore not barred by the Limitation Act 1950.41 The
40 Proprietors of Wakatū v Attorney-General, above n 3, at [1]. 41 Limitation Act 1950, s 21(2).
reasons for this are explained in the judgment of Arnold and O’Regan JJ, where they
agreed with Elias CJ and Glazebrook J that Mr Stafford could proceed with his claim
to recover, through an institutional constructive trust, “land that came into the hands
of the Crown that should have been part of the tenths reserve”.42 This included the
land that became vested in the Crown as a result of the failure to reserve the “missing”
10,000 acres.
[49] As a result of the Supreme Court decision, Mr Stafford can continue his claim
in the High Court to try to recover lands “in the hands of the Crown” covered by the
Spain award which form part of the shortfall of land that should have been, but was
not, reserved for Māori.
The ACC property
[50] The ACC property comprises 11 parcels of land, including five that were once
part of section 443. It also comprises all of section 442 and part of section 439 that
were never reserved for Māori. The following diagram shows the layout of the
property and the 11 parcels of land derived from sections 443, 442 and 439. The
boundaries of the original section 443 are also marked. As can be seen, approximately
one-third of the ACC property (parcels 1 to 5) is derived from half of section 443.
42 Proprietors of Wakatū v Attorney-General, above n 3, at [815].
[51] Section 443 was subdivided for leasing purposes. A certificate of title was first
raised for section 443 by the Maori Trustee in 1926. Another title was raised in 1940.
The title lists a transfer in 1969 of part of section 443 from the Māori Trustee to the
Nelson Club but that related to a part that does not form part of the ACC property. In
1970, the part of section 443 that forms part of the ACC property was transferred from
the Māori Trustee to Newman Bros Ltd (Newmans). The residue of section 443 was
transferred to the Wakatū Incorporation in 1977, pursuant to the Wakatū Incorporation
Order 1977. There is no evidence before me concerning the Māori Trustee’s decision
to sell section 443 to Newmans. I do not know what consultation was undertaken or
how the proceeds were accounted for.
[52] The Newmans’ part of section 443 was transferred to numerous entities
between 1987 and 2008, which is the year ACC acquired it as part of an investment
property.
[53] There is no information before me concerning the history of sections 442 and
439 other than that they were not reserved for Māori. They were probably sold by the
Company and or the Crown to settlers and are likely to have been in private ownership
since about 1845, before being acquired by ACC in 2008.43
The present proceeding
[54] On 15 September 2017, ACC entered into an agreement for sale and purchase
of the ACC property to Cephas Property No 1 Ltd (Cephas). The settlement date was
originally to be 31 March 2018 but Cephas exercised a right available to it under the
agreement to bring the settlement date forward to 31 January 2018.
[55] On 24 October 2017, Mr Stafford lodged a caveat application pursuant to
s 137(1) of the Land Transfer Act 1952 after learning that it was either for sale or was
already subject to an agreement for sale and purchase.
[56] Initially the Registrar-General refused to register the caveat on the basis that
the caveat did not comply with s 137(2)(c) of the Land Transfer Act because ACC “is
a legal entity separate from the Crown” pursuant to s 15 of the Crown Entities Act and
therefore there was insufficient connection between the registered proprietor and the
claimed beneficial interest.
[57] Mr Stafford then commenced an urgent application for judicial review of the
Registrar-General’s decisions to reject his caveat application, seeking declarations that
it should have been registered. On 29 January 2018, the parties reached an agreement
whereby ACC accepted that the Registrar-General could register the caveat and ACC
would apply under s 143 of the Land Transfer Act to have it removed. The judicial
review proceeding was discontinued.
[58] The appendix to the caveat records that Mr Stafford has a beneficial interest in
the ACC property and that ACC “is subject to a sufficient degree of ministerial control
that it comprises an instrument of executive government and as such [ACC] constitutes
the Crown for the purposes of the beneficial interest the Caveator claims in the land”.
43 Refer Carl Walrond “Nelson Region-European Settlement” (3 August 2015) Te Ara – The
Encyclopaedia of New Zealand https://www.teara.govt.nz/en/zoomify/28951/nelson-town-
blocks.
[59] ACC and Cephas then reached a further agreement deferring settlement until
29 March 2018. Cephas, however, has the option to cancel the agreement if ACC fails
in its proceeding or if judgment is not given by 15 March 2018. The deed of
compromise between ACC and Cephas also contains a mechanism for the parties to
cancel the contract if Mr Stafford appeals this judgment.
The caveating of land
[60] The registered proprietor of any estate or interest in land has, save for limited
exceptions, an indefeasible title.44
[61] Where a person claims to be entitled to, or to be beneficially interested in, the
land, they may then lodge a caveat with the Registrar-General of Land in the
prescribed form. Not all beneficiaries are, however, entitled to lodge a caveat against
a title to land that is held on trust. For example, a beneficiary under a discretionary
trust has only the right to have the trust properly administered and does not have a
caveatable interest in land held by the trust, unless the trustees have resolved to
distribute that land, or part of it, to that beneficiary.45
[62] A caveat lodged under s 137 of the Land Transfer Act must explain how the
land or interest claimed is derived from the registered proprietor.46 The requirement
to explain how the caveator’s beneficial interest is derived from the registered
proprietor appears to be a unique feature of the Land Transfer Act. Equivalent
provisions do not exist in Australian, Canadian or the United Kingdom legislation
governing the lodging of caveats or notices against the title for land. In those
jurisdictions, the caveator is required to simply particularise the interest, lien or charge
claimed without reference to that interest, lien or charge being derived from the
registered proprietor.47
44 Land Transfer Act 1952, s 62. 45 Rutherford v Rutherford [2015] NZHC 878, [2015] NZAR 1303 at [18]; Patchett v Williams
HC Blenheim CIV-2005-406-82, 5 October 2005. See also R & I Bank of Western Australia Ltd
v Anchorage Investments Pty Ltd (1993) 10 WAR 59 (FC). 46 Section 137(2)(c). 47 Refer Real Property Act 1886 (SA), s 39; Land Transfer Act 1893 (WA), s 30; Land Title Act 1994
(Qld), s 121; Real Property Act 1990 (NSW), s 74B; Land Titles Act 1925 (ACT), s 30; Land Title
Act 2000 (NT), s 137; Transfer of Land Act 1958 (Vic), s 89; Land Title Act RSBC 1996 c 250,
ss 282 and 286; Land Title Act RSA 2000 c L-4, s 130; The Land Title Act RSO 1990 c L-5, ss 128
and 131; Land Registration Act 2002 (UK), ss 32–39.
[63] An application to remove a caveat is made under s 143 of the Land Transfer
Act which provides:
143 Procedure for removal of caveat
(1) Any such applicant or registered proprietor, or any other person
having any registered estate or interest in the estate or interest
protected by the caveat, may, if he thinks fit, apply to the High Court
for an order that the caveat be removed.
(2) The court, upon proof that notice of the application has been served
on the caveator or the person on whose behalf the caveat has been
lodged, may make such order in the premises, either ex parte or
otherwise, as to the court seems meet.
[64] The onus is on the caveator to establish that he or she has a reasonably arguable
case for the interest claimed.48 The caveator bears the onus because it is they who
seek to impose their alleged interest over an existing property right. Even if the
caveator establishes a reasonably arguable case to support the continuation of his or
her caveat, the Court has a discretion to make an order removing the caveat. This
discretion will normally not be exercised if the legitimate interests of the caveator will
be compromised by removing the caveat.49
Other caveats
[65] Ms Feint, senior counsel for Mr Stafford, placed reliance on another judgment
of Clifford J in Proprietors of Wakatū v Attorney-General50 (Wakatū caveats
judgment), in which he upheld caveats placed by Wakatū on the titles to three schools
in the Nelson area. That judgment was delivered after Clifford J had dismissed the
claims in the Wakatū proceeding and before the Court of Appeal and the
Supreme Court had delivered their judgments in the Wakatū proceeding. The Wakatū
caveats judgment was delivered after the Settlement Act had been passed.
[66] In the case of two of the schools, the caveated land was part of the original
tenths allotment still owned by the Crown. In the case of the third school, the caveated
land was part of the Matangi Awhio pā as it existed in 1842. Thus, while the land of
48 Paugra Holdings Ltd (in liq) v Harvestfield Holdings Ltd [2014] NZCA 164, (2014) 15 NZCPR
227 at [34]. 49 Pacific Homes Ltd (in rec) v Consolidated Joineries Ltd [1996] 2 NZLR 652 (CA). 50 Proprietors of Wakatū v Attorney-General [2014] NZHC 1785.
the third school was not reserved as a tenths allotment, it was land that should not have
been transferred to the Company. That land was also owned by the Crown.
[67] Clifford J explained that, although he found against the plaintiffs in the Wakatū
proceeding, he was satisfied that the claims advanced by the Proprietors of Wakatū
and Mr Stafford were reasonably arguable.51 He accordingly held the caveats could
remain registered against the titles to all three schools. Of significance is the fact that
the titles to all three schools were, indisputably, in the name of the Crown.
PART II
IS IT ARGUABLE THE ACC PROPERTY CAN BE USED TO SETTLE
POSSIBLE CROWN LIABILITIES?
The concept of the Crown
[68] Wide ranging and at times irreconcilable definitions of “the Crown” can be
found in our statute books, case law and in text books. Dame Alison Quentin-Baxter
and Professor Janet McLean have recently observed that the common law is not settled
about definitions of the Crown. They lament “not only is case law confusing, current
New Zealand legislative usage also appears to be inconsistent”.52
[69] This problem is not unique to New Zealand. Professor Loughlin, writing about
the United Kingdom experience, has said:53
The manner in which the concept of the Crown has been utilised borders on
the incoherent. The judiciary has failed to develop the common law in a
systematic fashion … [and] statutory formulations have, on a charitable
interpretation, been highly confusing.
51 At [39]. 52 Alison Quentin-Baker and Janet McLean The Realm of New Zealand: The Sovereign,
The Governor-General, The Crown (Auckland University Press, Auckland, December 2017) at
41. 53 Martin Loughlin in “The State, the Crown and the Law” in Maurice Sunkin and Sebastian Payne
(eds) The Nature of the Crown: A Legal and Political Analysis (Oxford University Press, Oxford,
2003) at 37.
[70] Statutory definitions of the Crown include the constitutional concept of the
Crown in New Zealand as “Her Majesty the Queen in right of New Zealand”.54 Other
statutory definitions of the Crown are very specific and include, for example, “a
contractor or security contractor” as defined in the Corrections Act 2004 or the Penal
Institutions Act 1954.55
[71] Some statutory definitions of the Crown expressly include Crown entities,56
while others expressly exclude Crown entities.57
[72] Judicial attempts at devising a definition of the Crown have also failed to
produce any uniformity. In Town Investments Ltd v Department of the Environment,
Lord Diplock said:58
… instead of speaking of “the Crown” we [should] speak of “the Government”
–a term appropriate to embrace both collectively and individually all of the
Ministers of the Crown …
In the same case, Lord Simon said:59
The departments of State including the Ministers at their head … are then
themselves members of the corporation aggregate of the Crown.
In M v Home Office,60 Lord Templeman took a bifurcated approach to the meaning of
the Crown when he said “the expression ‘the Crown’ has two meanings; namely the
monarch and the executive”.61
[73] Textbook writers have also proffered suggestions as to what is meant by the
Crown. Professors Hogg, Monahan and Wright, after quoting Professor Maitland’s
54 Crown Forest Assets Act 1989, s 2(1); State-Owned Enterprises Act 1986, s 2; National Provident
Fund Restructuring Act 1990, s 2; Post Office Bank Act 1987, s 2; New Zealand Public Health
and Disability Act 2000, s 6(1); Finance Act (No 2) 1990, s 2; Māori Purposes Act 1993, s 3; Rural
Banking and Finance Corporation of New Zealand Act 1989, s 2(1). 55 Prisoners’ and Victims’ Claims Act 2005, s 6(2). 56 Search and Surveillance Act 2012, s 167(2); Trans-Pacific Partnership Agreement Amendment Act
2016, s 41. 57 Public Finance Act 1989, s 2(1); Copyright Act 1994, s 2(1). 58 Town Investments Ltd v Department of the Environment [1978] AC 359 at 380-381. 59 At 400. 60 M v Home Office [1994] 1 AC 377. 61 At 395.
quip that the Crown is a piece of jewelled headwear in the Tower of London,62 proceed
to say:63
Despite the fact that we now have a “constitutional monarchy”, in which the
role of the Queen [and of her representatives in the commonwealth countries]
has become almost entirely formal, the term ‘the Crown” has persisted as the
name for the executive branch [not the legislative branch] of government.
Executive power is actually exercised by the Prime Minister … and the other
ministers who direct the work of the civil servants in the various government
departments ... This structure … is commonly and accurately described as
“the government”, or “the administration”, or “the executive”, … but lawyers
usually use the term “the Crown”.
[74] Professor Joseph, in Constitutional and Administrative Law in New Zealand,64
has examined the scope of the Crown in the New Zealand context by reference to
“instruments of executive government”. After examining the “umbrella of the Crown”
through the degree of control65 that a Minister or department is legally66 entitled to
exercise over the body in question, Professor Joseph explains that Crown entities
“may, or may not qualify as emanations of the Crown”.67 He then says:68
Crown agents are the only entities that fall squarely under the Crown’s
umbrella. The responsible Minister may direct a Crown agent to give effect
to government policy, and the entity is under a statutory duty to comply. This
power and correlative duty subject Crown agents to the degree of
governmental control needed to satisfy the common law control test. But
questions may still arise. An entity’s Act may supplement or expressly modify
or negate the Crown Entities Act 2004. The Crown Entities Act 2004 is a
generic statute that prevails over an entity’s constituent Act, except to the
extent that an entity’s Act expressly provides otherwise. Thus, a Crown agent
would not qualify as the Crown where its statute expressly negated the
Minister’s power to issue binding directions under the Crown Entities Act
2004. Furthermore, Crown agents may be declared not to be the Crown for
specific statutory purposes. Under the Public Finance Act 1989, for example,
“the Crown” does not include Crown entities for any of the Act’s purposes.
62 Frederic W Maitland The Constitutional History of England (University Press, Cambridge, 1909)
at 418. 63 Peter W Hogg, Patrick J Monahan and Wade K Wright Liability of the Crown (4th ed, Carswell,
Ontario, 2011) at 12-13. 64 Philip A Joseph, above n 6, at 620. 65 While the “public functions” test was once used to delineate the Crown, it is now settled in
New Zealand that the courts should apply the “control test” to determine the scope of the Crown’s
reach in any particular fact situation; Commissioner of Inland Revenue v Medical Council of New
Zealand [1997] 2 NZLR 297 (CA) at 326-327; Miller v New Zealand Railways Corp [2011] NZAR
21 (HC) at 24. 66 Bank voor Handel en Scheepvaart NV v The Administrator of Hungarian Property [1954] AC 584
(HL) at 617. 67 Philip A Joseph, above n 6, at 619. 68 At 620.
[75] This brief summary of authorities leads to the following positions:
(1) First, the effect of s 15(b) of the Crown Entities Act is that all statutory
entities, and therefore Crown entities, are separate legal bodies from
the Crown. The legal distinction between the Crown and Crown agents
such as ACC leads me to the view that it is better to examine the
relationship between the Crown and ACC in terms of agency rather
than as ACC being a “emanation” or “instrument” of the Crown.69 The
concept of agency fits more comfortably with the terminology of the
Crown Entities Act, in which organisations such as ACC are classed as
Crown agents.
(2) Second, it is not particularly helpful to simply ask if ACC is an agent
of the Crown. The reason why this stark question is not particularly
helpful is because the answer is dependent on the circumstances in
which the question is asked. ACC may act on behalf of the Crown for
some purposes but clearly not for others. Thus, for example, a claim
against ACC in relation to a personal injury by accident is not the same
action as a claim against the Attorney-General seeking exemplary
damages arising from the same events. In those circumstances, ACC
“is not the Crown”.70 In other circumstances, for example when
Ministers give lawful policy directions to ACC pursuant to ss 103 or
107 of the Crown Entities Act, it is reasonably arguable ACC gives
effect to those directions on behalf of the Crown.
(3) Third, the appropriate inquiry is whether it is reasonably arguable, in
the context of this case, that responsible Ministers can lawfully exercise
control over ACC in a way that could lead to the ACC property being
applied towards the settlement of any Crown liability arising from the
Wakatū proceeding. Only in those circumstances would ACC hold the
property on behalf of the Crown.
69 Peter J Hogg, Patrick W Monahan and Wade K Wright, above n 63, at 462. 70 Attorney-General v Lamb [2017] NZCA 236, [2017] NZAR 955 at [23](a).
Context
[76] There are three contextual aspects to the issue addressed in this part of my
judgment.
[77] First, Mr Stafford’s application is a further step in a journey motivated by a
conviction that he and other descendants of the original owners of the land
encompassed within the Spain award have been, and are, the victims of a gross
injustice that commenced in about 1845 when the Crown failed to give full effect to
the Spain award. Those injustices have, at least in the eyes of Mr Stafford and his
supporters, been compounded by a succession of decisions since about 1845 that have
resulted in the severe diminution of the lands that either were, or should have been,
reserved for Māori pursuant to the Spain award.
[78] Second, the Supreme Court’s decision in Wakatū is a landmark decision that
illustrates how the common law in this country is continuing to evolve in order to
facilitate the resolution of historic grievances concerning the way the Crown has
deprived Māori of some of their land. In particular, in this case, the Supreme Court
has said Mr Stafford can pursue his claim based upon equitable principles in relation
to the land that came into the hands of the Crown that should have been part of the
tenths reserve.
[79] The Supreme Court’s decision in Wakatū can be viewed in the context of a
series of key cases concerning the development of New Zealand’s law governing the
relationship between the Crown and Māori, starting with the seminal decision of the
Court of Appeal in New Zealand Māori Council v Attorney-General.71 More recently,
in Ririnui v Landcorp Farming Ltd (Ririnui decision),72 the Supreme Court held that
shareholding Ministers could lawfully ask Landcorp Farming, a State-Owned
Enterprise, to refrain from selling a particular farm that was of interest to Māori. While
State-Owned Enterprises are a “creature” of the Crown, the State-Owned Enterprises
Act does not contain provisions similar to ss 103 or 107 of the Crown Entities Act.
There is considerably more legal distance between Ministers and the board of a State-
71 New Zealand Māori Council v Attorney-General [1989] 2 NZLR 142 (CA). 72 Ririnui v Landcorp Farming Ltd (Ririnui decision) [2016] NZSC 62, [2016] 1 NZLR 1056.
Owned Enterprise than between Ministers and the board of a Crown agency. The
Supreme Court was, however, satisfied that the Crown had the ability to exercise a
substantial degree of indirect control over the way in which State-Owned Enterprises
controlled their assets, particularly in relation to lands formerly held by the Crown that
were the subject of a claim by Māori. While there are a number of differences between
the facts in the Ririnui decision and the present case, the Ririnui decision illustrates
that a State-Owned Enterprise may be materially constrained by the legal obligations
the Crown owes to Māori when considering the sale of land that is of importance to
Māori. One important distinction between the Ririnui decision and the application
before me is that the plaintiffs in Ririnui brought an action for judicial review. Their
proceeding did not engage the caveating provisions in the Land Transfer Act.
[80] Third, the Wakatū proceeding has to be viewed in the broader context of the
commitment of successive Governments over recent years to resolve outstanding land
disputes between Māori and the Crown, particularly, but not exclusively, within the
context of Treaty of Waitangi settlements.
Analysis
[81] My analysis of the issues raised in Part II of this judgment is underpinned by
the approach taken by the Supreme Court in Ririnui. As previously noted, Ririnui
concerned the proposed sale of land that was of interest to Māori but which was owned
by a State-Owned Enterprise. The Supreme Court held that responsible Ministers had
the ability to “exercise a substantial degree of indirect control over the manner in
which a State-Owned Enterprise deployed its assets”.73 State-Owned Enterprises are
less subject to ministerial control than Crown agents. If responsible Ministers can
indirectly influence the way a State-Owned Enterprise deals with lands that are of
interest to Māori, then responsible Ministers have, through ss 103 and 107 of the
Crown Entities Act, even greater ability to control the way in which a Crown agent
can dispose of land that is of interest to Māori.
[82] It is therefore reasonably arguable the Minister could, after following the steps
in s 115 of the Crown Entities Act, issue a direction to ACC pursuant to s 103 of the
73 Ririnui decision, above n 72, at [86](b).
Crown Entities Act forbidding the sale of any land held by ACC that is the subject of
a claim by Māori on the basis that such lands may be used by the Crown to settle Māori
land claims. It is reasonably arguable that a general policy direction of that kind is
unlikely to offend s 113(1)(b) of the Crown Entities Act. Such a general direction
would, however, have the indirect effect of preserving the current ownership of the
ACC property until Mr Stafford’s claim is heard and determined. Alternatively, it is
reasonably arguable the Minister of State Services and the Minister of Finance may be
able to give a similar direction under s 107(1)(e) of the Crown Entities Act in order to
assist the Government in managing fiscal risks concerning claims against the Crown
by Māori.
[83] Such a direction or directions would be similar in nature to the instructions
Minister Dyson gave ACC in September 2007 in relation to the then Government’s
“land of potential interest process” and which ACC accepted at the time as being a
lawful instruction.
[84] It is not determinative of the issues addressed in this part of my judgment that
a direction of the kind I have set out in [82] has not yet been given. This is because
the control test focuses upon “the degree of control that is legally entitled to be
exercised [by Ministers over ACC]; not with the degree of control that is in fact
exercised”.74
[85] Nor is it significant that a direction of the kind set out in [82] would have the
indirect effect of the Minister asserting influence over the way ACC manages part of
its investment portfolio. The powers conferred upon the Minister by s 103 of the
Crown Entities Act are reinforced by s 275 of the Accident Compensation Act, which
specifically provides that investment decisions may be “subject to any policy direction
under s 103 of the Crown Entities Act …”.
[86] This analysis leads to the conclusion that it is reasonably arguable the ACC
property may indirectly be the subject of control by the Minister or Ministers when
giving directions concerning government policy for the resolution of land disputes
74 Philip A Joseph, above n 6, at 618, citing Bank voor Handel en Scheepvaart NV v Administrator
of Hungarian Property, above n 66.
between the Crown and Māori, or when managing the Crown’s fiscal risks in relation
to land disputes with Māori.
[87] The answer to the question posed in Part II of this judgment is therefore
answered in favour of Mr Stafford.
PART III
DOES MR STAFFORD CURRENTLY HAVE A CAVEATABLE INTEREST IN
THE ACC PROPERTY?
[88] My conclusion that it is reasonably arguable that the ACC property could be
applied towards settling any liability the Crown may have in relation to the Wakatū
proceeding does not, however, translate automatically into a finding that Mr Stafford
currently has a caveatable interest in the ACC property. The reasons for this can be
explained by exploring in further depth the three-way relationship between the Wakatū
claim, the ACC property, and the Crown. That will be done by first considering the
disconnection between the Wakatū claim and section 443 before turning to the balance
of the ACC property.
Section 443
[89] Mr Parker, an historian, explained in his evidence that section 443 was always
reserved for Māori and sold in two parts by the Māori Trustee in 1969 and 1970. As
previously noted, the part of section 443 that is now part of the ACC property was sold
by the Māori Trustee to Newmans in 1970.
[90] The third amended statement of claim in the Wakatū proceeding makes no
claim with respect to any of the 53 sections that were actually reserved for Māori and
not disposed of by the Company or the Crown to others prior to 1882, when the lands
vested in the Public Trustee. The focus of the Wakatū proceeding is on land that should
have been, but which was not, reserved for Māori and land that was disposed of by the
Crown between 1845 and 1882. There is no suggestion in the pleadings that the
Māori Trustee breached his duty to Mr Stafford or other beneficiaries of the
Tenths Trust when he sold part of section 443 to Newmans.75
[91] If the ACC property only comprised the part of section 443 that the
Māori Trustee sold to Newmans, then Mr Stafford would not have a caveatable interest
in the ACC property. This is because he has not claimed a beneficial interest in the
land actually reserved for Māori but subsequently sold by the Māori Trustee.
[92] A caveat can, however, only be registered against the title of the ACC property
as a whole. If Mr Stafford currently has a caveatable interest in the part of the property
derived from sections 442 and 439, then I would have no hesitation in holding that the
caveat in the present form should remain in force.76
Sections 442 and 439
[93] Mr Stafford claims a beneficial interest in those parts of the ACC property that
he says form part of the original estate held either by the Company or the Crown that
should have been reserved for Māori but which were not. In other words, Mr Stafford
is saying the ACC property, excluding that part derived from section 443, forms part
of the shortfall of land held by the Company or Crown in about 1845 that can now be
the subject of his claim because it is property that has again come under the control of
the Crown.
Analysis
[94] The lacuna in the reasoning advanced on behalf of Mr Stafford is that the ACC
property can only be applied towards addressing any claim Mr Stafford may
successfully pursue against the Crown if Ministers take steps along the lines I have set
out in [82]. The unexercised ministerial powers of direction I have explained in Part II
do not give Mr Stafford a caveatable interest in this case. This is because Mr Stafford
could not establish a beneficial interest in the land unless Ministers assert their control
75 If such a claim were made it would, in all likelihood, be a claim against the Crown, as the Māori
Trustee is defined as a government department in s 2(1) of the Crown Proceedings Act 1950. 76 Howard v Resort Development Ltd (2007) 8 NZCPR 505; Rawat v Melview Featherston Street
Ltd (2006) 7 NZCPR 561; Nicholson v Morning Star (St Luke’s Grand Apartments) Ltd (2008)
9 NZCPR 407.
over ACC. In that respect, Mr Stafford is in much the same position as a discretionary
beneficiary of a trust, who also lacks a caveatable interest in trust property.77
[95] This unfortunate dilemma for Mr Stafford arises because he has endeavoured
to use the blunt caveating provisions of the Land Transfer Act to achieve a short-term
remedy to a very complex constitutional and legal issue. Unfortunately for him,
Mr Stafford cannot circumvent the requirements of s 137 of the Land Transfer Act that
he derive his claimed beneficial interest in the ACC property from the registered
proprietor. Section 137(2)(c) mandates that a caveat contain information on how the
claimed interest is derived from the registered proprietor. This requirement reflects an
underlying principle in the Land Transfer Act that a beneficial interest in land under
s 137(1)(a) must in fact be derived from the registered proprietor.78
[96] I will not comment on whether or not Mr Stafford may have been better to have
followed the lead of Ririnui and sought an interim injunction against ACC and/or a
declaration requiring responsible Ministers to give consideration to issuing directions
of the kind I have set out in [82]. I have been asked to do no more than consider ACC’s
application to have Mr Stafford’s caveats removed from the ACC property.
[97] I do not, however, wish to see Mr Stafford and his supporters deprived of an
opportunity to persuade the Minister or Ministers to issue a direction or directions of
the kind I have described in [82], which may ultimately result in a solution that
achieves for Mr Stafford everything that he is endeavouring to achieve through his
caveat. To achieve this possible outcome, I will exercise the discretion conferred by
s 143 of the Land Transfer Act and keep in force Mr Stafford’s caveat over the ACC
property until 22 March 2018. Although this creates a very tight timeframe for the
Minister or Ministers to make a decision, it would be preferable if this aspect of
Mr Stafford’s dispute were able to be resolved through Ministers exercising their
statutory powers.
77 Rutherford v Rutherford, above n 45, at [18]. 78 See for instance, Pragma Designer Homes Ltd v Jiang [2016] NZHC 677 at [22]; Mahon v The
Station at Waitiri Ltd [2017] NZHC 631 at [39]-[41], affirmed by Mahon v The Station at Waitiri
Ltd [2017] NZCA 387 at [33]-[37]; and Edith Farms Ltd v Providence Lands Ltd [2013] NZHC
3108 at [27]-[29].
Costs
[98] Although ACC and the Attorney-General have substantially succeeded, the
public interest involved in this case is so significant that it is not appropriate for any
award of costs to be made in favour of ACC or the Attorney-General.
_____________________
D B Collins J
Solicitors: Accident Compensation Corporation, Wellington for Applicant Pitt & Moore, Nelson for Respondent Crown Law Office, Wellington for Attorney-General