IN THE MĀORI LAND COURT OF NEW ZEALAND AOTEA DISTRICT A

Transcription

1 352 Aotea MB 211 IN THE MĀORI LAND COURT OF NEW ZEALAND AOTEA DISTRICT A UNDER Section 19 of Te Ture Whenua Māori Act 1993 IN THE MATTER OF Waipapa 1D 2B 3B BETWEEN AMY AMIRIA WALKER, DAVID TE RAWHITI FLIGHT, KATARAINA KATHLEEN PITIROI, RAWIRI CHARLES HEREMAIA, SHARON MATEWAI FLETCHER and TE MIHIATA KEITA HAKIWAI-WHAANGA as TRUSTEES OF WAIPAPA AND TOKAANU MᾹORI LANDS TRUST Applicants AND LESLIE ERLE FLIGHT Respondent Hearings: 336 Aotea MB dated 13 April 2015 (Heard at Tūrangi) Appearances: J Koning for the Trustees A Vane for the Respondent Judgment: 12 May 2016 RESERVED JUDGMENT OF JUDGE L R HARVEY Solicitors: Le Pine & Company, DX KP37001,Taupō avane@lepine.co.nz Koning Webster Lawyers, PO Box 11120, Papamoa 3151 john@kwlaw.co.nz

2 352 Aotea MB 212 Contents Introduction... [1] Issues... [6] Background... [8] Do grounds exist for the granting of a permanent injunction?... [14] Is there a continuing trespass?... [18] Applicant s case [18] Respondent s case [22] Discussion... [24] Is a permanent injunction the appropriate remedy?... [30] Are common law remedies adequate?... [34] Applicants case [34] Respondent s case [39] Discussion... [40] How relevant is the parties conduct?... [50] Respondent s case [50] Applicant s case [53] Discussion... [56] Is hardship a relevant consideration?... [64] Respondent s case [64] Applicant s case [67] Discussion... [69] Are alternative remedies available?... [74] Respondent s case [74] Applicants case [75] Discussion... [77] Conclusion... [83] Decision... [89]

3 352 Aotea MB 213 Introduction [1] The trustees of the Waipapa and Tokaanu Māori Lands Trust seek a permanent injunction against Leslie Erle Flight. In an earlier judgment I determined that Mr Flight was the legal owner of the dwelling situated on the trust s land. The trustees now seek a permanent injunction requiring Mr Flight to remove the dwelling. They say that they cannot grant the respondent an occupation order or any other alternative as Mr Flight is not an owner in the trust s land; rather, he is a beneficiary of a whānau trust with shares in the land. [2] In addition, the trustees say that there is no evidence that the respondent has any support from the whānau trust as to the grant of an occupation order in his favour. Further, the trustees say that they have the legal right to manage the land in accordance with the trust order. In the exercise of their discretion they have decided that the dwelling should be removed. The evidence of the trustees is that the area occupied by the respondent, including his dwelling and outbuildings, comprises of approximately 1,500 square metres of Waipapa 1D2B3B. That block comprises a total area of approximately 40 hectares. [3] Mr Flight implores the Court to refuse the injunction. He says that a dwelling of one form or another has been situated on the land for almost three quarters of a century. In addition, the respondent says that he cares for a child with a chronic mental illness and simply cannot afford to either live somewhere else or pay the costs of removal of the dwelling. [4] Mr Flight also says that earlier and genuine attempts to negotiate a practical settlement of the issues that remain in dispute failed when the trustees procured a building inspection report that said his dwelling was not habitable. Since then Mr Flight says that he has expended approximately $8, of borrowed funds on improving the house and has filed in support of his position evidence from a builder to confirm that the house is now habitable. [5] Further, Mr Flight says that the trustees are acting unreasonably and contrary to their trust order. This includes in failing to provide beneficial owners with sites on the trust land for dwellings. He suggests that the trustees be removed and replaced with the Māori Trustee. Issues [6] The issues for determination are:

4 352 Aotea MB 214 (a) (b) (c) (d) (e) (f) (g) Do grounds exist for the granting of a permanent injunction? Is there a continuing trespass? Is a permanent injunction an appropriate remedy in this case? Are common remedies adequate? How relevant is the parties conduct? Is hardship a relevant consideration? Are alternative remedies available? [7] For completeness, I record that the parties have attempted a form of alternative dispute resolution in 2012 unfortunately the issues between them could not be resolved, hence the issuing of this decision. Background [8] Waipapa 1D 2B 3B is a block of Māori freehold land created by partition order on 30 August Part of the block, ha, is administered by Te Kawakawa Ahu Whenua Trust. The trust was established on 21 March 1983 and the original trustees were John Te Herekiekie Grace, Rangikamatua Downs, Kingi Marshall Grace and Arthur Lancaster Grace. 2 [9] At the time this application was filed the responsible trustees were Arthur Lancaster Grace, John Hura and Rangikamutua Downs. 3 On 10 February 2016 I appointed Robert Rangitukehu Grace, Jeffrey Paoratepohoi Bennett, Tyronne Andrew Smith and Te Ngaehe Wanikau as replacement trustees for Rangikamatua Downs and Arthur Lancaster Grace. 4 [10] The advisory trustees are Alfred Fearon Rangikahekeiwaho Grace, Anihera Waitapu Konui, Arthur Te Takinga Smallman (deceased), James Tautahanga Rangitaua, Lawrence Grace, Manu Hallett, Te Awhe Petera Te Rangi, Te Rakato Rangiita and William Duff Tokaanu MB 327 (42 ATK 327) 65 Tokaanu MB 195 (65 ATK 195) 98 Aotea MB 291 (98 AOT 291) 348 Aotea MB 243 (348 AOT 243) 65 Tokaanu MB 195 (65 ATK 195)

5 352 Aotea MB 215 [11] The remaining ha of the block, is administered by the Waipapa and Tokaanu Māori Lands Trust. 6 The trust was established on 15 November 1983 and the original trustees were Edward Te Rangi, James Kahu, William Te Rangi, Gene Heremaia, Hono Lord, Ted Pokaia, Tureiti Te Rangi, Joe Malcolm, Eileen Duff, Awhi Te Rangi and Andrew Malcolm. 7 [12] The current trustees are Amy Amiria Walker, David Terawhiti Flight, Kataraina Kathleen Pitiroi, Mikaere Pitiroi, Rawiri Ronald Charles Heremaia, Sharon Matewai Fletcher and Te Mihiata Keita Hakiwai-Whaanga. 8 [13] As set out in the February 2014 judgment the Flight whānau have occupied the dwelling site since they were granted an order for a dwelling site per s 440 of the Māori Affairs Act 1953 on 28 March Do grounds exist for the granting of a permanent injunction? [14] Section 19 of Te Ture Whenua Māori Act 1993 states: (1) The Court, on application made by any person interested or by the Registrar of the Court or of its own motion, may at any time issue an order by way of injunction (a) against any person in respect of any actual or threatened trespass or other injury to any Māori freehold land, Māori reservation, or wāhi tapu; or [15] In Taueki v Horowhenua Sailing Club - Horowhenua 11 (Lake) Block the Māori Appellate Court discussed the requirements for granting a permanent injunction: 10 [15] In applying for a permanent injunction, applicants must also fulfil the legal elements relating to the action of trespass before the Court will exercise its jurisdiction to grant the remedy. These elements are set out below: The action for trespass to land is primarily intended to protect possessory rights, rather than rights of ownership. Accordingly, the person prima facie entitled to sue is the person who had possession of the land at the time of the trespass. Actual possession consists of two elements: the intention to possess the land and the exercise of control over it to the exclusion of other persons. Either element alone is not sufficient Tokaanu MB 168 (66 ATK 168) Ibid 300 Aotea MB 13 (300 AOT 13) Flight v Walker - Waipapa 1D2B3B (2014) 316 Aotea MB 3 (316 AOT 3) at [46] Taueki v Horowhenua Sailing Club - Horowhenua 11 (Lake) Block [2014] Māori Appellate Court MB 60 (2014 APPEAL 60)

6 352 Aotea MB 216 [16] Once the elements for the trespass action are made out, the Court then considers what remedy is appropriate. The prima facie rule is that a landowner is entitled to an injunction to restrain a trespass. However, the Court still has discretion as to whether to grant the injunction or not. Matters affecting the exercise of the discretion include the parties conduct. [16] In Te Hokowhitu v Proprietors of Matauri X the Appellate Court considered: 11 [39] There are limited Māori Appellate Court authorities on this point. But some guidance can be taken from the Māori Appellate Court decision of Eriwata v Trustees of Waitara SD Sections 6 & 91 Land Trust (2005). Although involving a Māori land trust, the principles concerning the rights that attach to legal owners apply equally to Māori land incorporations. The Court found that legal ownership prima facie entitles the trustees to an injunction where a trespass has been committed. This rule applies whether the tort of trespass is committed by a stranger or beneficial land owner of a trust. The Māori Appellate Court did note that an injunction may not issue where there was some matter that could have influenced the exercise of discretion to the contrary. [40] We consider that the position adopted in the English Courts and in the High Court of New Zealand, elaborates upon what test is needed when a judge, in the exercise of their discretion, may consider that an injunction may be unduly oppressive and thus when damages may be substituted for an injunction. (Emphasis added) [17] Consistent with these authorities, in determining whether to grant a permanent injunction, consideration must be given as to whether the elements of trespass have been established. Following that I can then consider whether an injunction is an appropriate remedy in this case. Is there a continuing trespass? Applicant s case [18] Mr Koning submits that, following the decision of the Court determining ownership of the dwelling in favour of Mr Flight, a notice to vacate was served on Mr Flight, who has since then, refused to comply with the notice and as a consequence the trustees now seek a permanent injunction requiring Mr Flight to remove the dwelling and associated improvements from Waipapa 1D 2B 3B. [19] Mr Koning argues that Mr Flight has occupied the site since 1987 without any formal permission from the trust. At best, he says, Mr Flight has an implied bare licence revocable by the trust at will and upon notice. Mr Koning submits that the bare licence did not require Mr Flight to pay any rental to the trust rather he was only required to pay the local council rates for the site. 11 Te Hokowhitu v Proprietors of Matauri X [2010] Māori Appellate Court MB 57 (2010 APPEAL 57)

7 352 Aotea MB 217 [20] In addition, Mr Koning contends that, on 21 March 2014, the trust served Mr Flight with a notice to cease occupation by 27 June 2014 and then to remove the dwelling and associated buildings and improvements from the land by 30 September According to Mr Koning, Mr Flight did not vacate within the given time period and has in effect been trespassing on the block. [21] Mr Koning submits that the trustees as registered proprietors of the block have the ability to revoke the bare licence held by Mr Flight. Such revocation has taken place and the trustees, he says, are now entitled to a permanent injunction. Respondent s case [22] Mr Vane submits that, given that the Court determined Mr Flight to be the owner of the dwelling, no liability rests with the trustees, thus the basis on which the notice to vacate was issued and the injunction application filed has now gone. Mr Vane confirmed that his client has undertaken remedial work to the dwelling such as to bring it into a reasonably habitable state or at the very lease to improve its habitable state. Accordingly, Mr Vane submits that there is no reason why the settlement agreement previously considered by the parties could not now be implemented. [23] Mr Vane further submits that there is no compelling reason or need for Mr Flight to vacate the land, there is no pressing need or use for the land and the dwelling has existed on the land for over 75 years fulfilling one of the objectives of the trust namely the better habitation or use by beneficial owners and the provisions for any special needs of owners as a family group. Mr Vane accepts that Mr Flight is not a direct owner of the land but says he is an indirect owner by virtue of being a beneficiary of the Heremaia Whānau Trust which is an owner in the block. Mr Vane adds that Mr Flight has a strong connection to the land and has been living on it since the late 1980s. Discussion [24] As foreshadowed, the action for trespass to land is primarily intended to protect possessory rights, rather than rights of ownership. 12 Accordingly, the person prima facie entitled to sue is the person who had possession of the land at the time of the trespass. 13 Actual possession consists of two elements: the intention to possess the land and the exercise of control over it to the exclusion of other persons Taueki v Horowhenua Sailing Club - Horowhenua 11 (Lake) Block [2014] Māori Appellate Court MB 60 (2014 APPEAL 60) Ibid Ibid

8 352 Aotea MB 218 [25] In Te Hokowhitu v Proprietors of Matauri X, the Māori Appellate Court referred to the High Court judgment of Proprietors of Parininihi ki Waitotara Block v Horitamakiterangi Manuirirangi where Harrison J noted that the tort of trespass occurs by: 15 (a) (b) (c) the act of a person entering or remaining; upon the land in the lawful possession of another; without lawful justification; and (d) is actionable without proof of actual damage. [26] The trustees are the registered proprietors of the land and as such have an absolute right of occupation and possession. From a strictly legal perspective, there is much force in the trustees arguments. In accordance with my earlier judgment Eriwata, affirmed by the Māori Appellate Court in 2005, the trustees are the legal owners of the land and have all of the powers of an absolute owner. 16 The trustees are entitled to make decisions in the best interests of the owners as a whole, taking into account relevant considerations in the exercise of their discretions. [27] It is also important to underscore that the trustees are not necessarily constrained by the express terms of the trust order as to the limitations of their powers, apart from the inability to alienate the freehold. The Supreme Court in Naera v Fenwick confirmed that the trustees have the powers of absolute owners generally, subject to any express constraining limitations set out in the trust order. 17 [28] In addition to having the legal power to manage the land as they see fit, the trustees no doubt are concerned as to any encroachment on their authority as legal owners. As Mr Koning put it, reduced to its simplest element, the current set of circumstances amounts to a trespass. Mr Flight has no legal right or permission from the legal owners to remain on the land. The trustees have asked him to vacate. Mr Flight has failed or refused to heed their instructions as the legal owners. The trustees now seek a permanent injunction so that, no doubt, they can then seek the assistance of a bailiff and other persons to evict Mr Flight from the land Te Hokowhitu v Proprietors of Matauri X [2010] Maori Appellate Court MB 566 (2010 APPEAL 566) at [30]-[31] citing Proprietors of Parininihi ki Waitotara Block v Horitamakiterangi Manuirirangi HC New Plymouth CP18/99, 31 October 2003 Eriwata - Waitara SD Sections 6 and 91 Land Trust (2005) 155 Aotea MB 269 (155 AOT 269) affirmed in Eriwata v Trustees of Waitara SD s6 and 91 Land Trust - Waitara SD s6 and 91 Land Trust (2005) 15 Whanganui Appellate Court MB 192 (15 WGAP 192) Naera v Fenwick [2014] NZSC 58

9 352 Aotea MB 219 [29] In conclusion, I find that the ground for establishing an action for trespass is made out. The next issue is whether a permanent injunction is the appropriate remedy in this case. Is a permanent injunction the appropriate remedy? [30] Whilst, prima facie the trustees are entitled to an injunction to restrain a trespass the Court retains the discretion as to whether to grant the injunction or not. Matters affecting the exercise of the discretion include the parties conduct. As noted in Te Hokowhitu an injunction is a discretionary remedy and even in the case of a continuing trespass a court may refuse an injunction if the circumstances of the case bring it within L Smith LJ s good working rule in Shelfer v City of London Electric Lightening Co, and possibly in other exceptional circumstances. 18 [31] This case was followed in Jaggard v Sawyer where the Court of Appeal held: 19 (1) The court had jurisdiction to award damages instead of granting an injunction to restrain continuing acts of trespass or breach of covenant where (i) the injury to the plaintiff's rights was small, (ii) its value was capable of being estimated in money and (iii) of being adequately compensated by a small money payment and (iv) it would be oppressive to the defendant to grant an injunction. When considering the question of oppression the court should not slide into application of a general balance of convenience test. Oppression had to be judged as at the date the court was asked to grant an injunction, and the court could not ignore the reality with which it was then confronted; the fact that the plaintiff could at an early stage have sought interlocutory relief was clearly relevant, as was the fact that the defendant could have sought a declaration of right. Those considerations were not however decisive; for example, it would weigh against a finding of oppression if the defendant had acted in blatant and calculated disregard of the plaintiff's rights. On the facts, the judge had been correct in finding that conditions (i), (ii) and (iii) above were satisfied. He had also been entitled to conclude on the basis of the material before him at trial, in particular the defendants' conduct, the plaintiff's failure to seek interlocutory relief at an early stage and the fact that restrictive covenants were not absolute or perpetually inviolable, that the grant of an injunction would be oppressive, and to award the plaintiff damages in lieu (see p 198 d e, p 203 a to h, p 204 a c d, p 208 b to d and p 209 d to j, post); dictum of A L Smith LJ in Shelfer v City of London Electric Lighting Co [1891 4] All ER Rep 838 at applied; Woollerton & Wilson Ltd v Richard Costain Ltd [1970] 1 All ER 483 disapproved. (2) Where a plaintiff's rights were capable of being protected by injunction it was proper for the court to award damages 'once and for all' in respect of future wrongs because it awarded them in substitution for the grant of an injunction and to compensate for those future wrongs which an injunction would have prevented. Further, there was no reason why the compensatory damages in lieu should not be measured by the amount which the plaintiff could reasonably have expected to receive for the release of the covenant. The judge's approach to the assessment of damages was correct on the facts and in accordance with principle and the appeal would therefore be dismissed (see p 201 c d, p 202 b c h j, p 204 b c, p 206 d, p 211 h and p 212 j to p 213 a, post); Wrotham Park Estate Co v Parkside Homes Ltd Te Hokowhitu v Proprietors of Matauri X [2010] Maori Appellate Court MB 566 (2010 APPEAL 566) at [37] to [38] Jaggard v Sawyer [1995] 2 All ER 189

10 352 Aotea MB 220 [1974] 2 All ER 321 applied; Surrey CC v Bredero Homes Ltd [1993] 3 All ER 705 considered. [32] I also note that in the Māori Appellate Court decision of O Malley v Wyborn Orokawa 3C2B that Court held that even where equitable considerations will be relevant in assessing the appropriateness of injunctive relief, the statutory objectives found in the Act must also be given consideration, if not precedence: 20 [35] While equitable considerations, in particular those of hardship and balance of convenience, should therefore be weighed by the Court in deciding whether to make injunctive orders, these must be balanced against the statutory objectives set out in sections 2 and 17 of the Act; that is, the retention of Māori land and General land owned by Māori in the hands of the owners, and the effective use, management, and development, by or on behalf of the owners, of Māori land and General land owned by Māori. [36] We agree with the assertion by counsel for the appellant that in the exercise of this discretion these statutory objective must be accorded just as much weight and often more than the well known equitable principles. Section 17 states that the statutory objectives shall be the primary objective of the Court. While they are therefore the primary consideration to be made in deciding whether to grant an injunctive relief, they are not the sole consideration. [33] In determining the appropriateness of a permanent injunction it is evident that issues of damages, conduct and hardship are relevant considerations. 21 Are common law remedies adequate? Applicants case [34] Mr Koning contends that the only reasonable defence available to Mr Flight is the good working rule referred to in Jaggard v Sawyer (referred to above). He acknowledged that whilst it is for Mr Flight to satisfy the elements of that rule nonetheless it should be noted that in this case, there is a significant injury to the trust s legal rights given that Mr Flight seeks the exclusive use and enjoyment of the site for an indefinite period without permission from the trust. [35] Mr Koning accepts that the value of injury to the applicants is capable of being estimated in money. Even so, he argues that the applicants would not be adequately compensated by a small monetary payment O Malley v Wyborn Orokawa 3C2B [2010] Maori Appellate Court MB 494 (2010 APPEAL 494) at [35]-[36] See Andrew Butler, Equity and Trusts in New Zealand (2 nd ed, Thomson Reuters, Wellington, 2009) at for list of factors for consideration

11 352 Aotea MB 221 [36] As to the question of oppression, Mr Koning contends that while the grant of a permanent injunction would be inconvenient and distressing for Mr Flight, it would not be oppressive. According to Mr Koning there is no compelling evidence before the Court that Mr Flight could not find suitable alternative accommodation. [37] In addition, counsel submits that the question of oppression must be considered against the history of the matter. Mr Flight has occupied the site for 28 years and has not paid any rent to the trust. He has had the exclusive use and occupation of the site in return for paying a modest amount of rates to the local authority. [38] Mr Koning submits that an award of damages in substitution for a permanent injunction would mean a non beneficial owner would prevail over the powers and responsibilities given to the trustees under the trust order and the Act which would be prejudicial to the interests of the beneficial owners as a whole and oppressive to the trust. Counsel suggests that s 17(2) (d) will apply in the present case and that the majority interest of the trust must be protected against the respondent as an unreasonable minority. Respondent s case [39] Mr Vane submits that the usual rationale and basis of an injunction is to protect the plaintiff against injury and harm for which the plaintiff cannot be compensated by damages or some other order of the Court. Mr Vane argues that in this case as no such harm or injury had been identified this raises the question as to whether an injunction is appropriate. Discussion [40] As a starting point the general position is that an injunction will not normally be granted when an effective common law remedy is available. This remedy frequently takes the form of damages and the question for the Court is whether an award of damages will fully compensate the plaintiff if injunctive relief is refused. 22 In Jaggard v Sawyer the Court considered that it had jurisdiction to award damages instead of granting an injunction to restrain continuing acts of trespass or breach of covenant where: 23 (a) (b) (c) the injury to the plaintiff's rights was small; its value was capable of being estimated in money; the plaintiff could be adequately compensated by a small payment; and Ibid at (2)(a) Jaggard v Sawyer [1995] 2 All ER 189 at pp

12 352 Aotea MB 222 (d) it would be oppressive to the defendant to grant an injunction. When considering the question of oppression the court should not slide into application of a general balance of convenience test. [41] During the hearing I discussed with Mr Koning the approximate size of the dwelling site and the potential money loss to the trust. I also made some comparisons to the Eriwata decision. Mr Koning considered that there is no evidence before the Court about a particular pecuniary loss that might be suffered if Mr Flight continued to occupy the dwelling site. He did however argue that a proceeding for trespass is actionable without proof of damage. 24 [42] There are two factual incongruities in this proceeding and Eriwata which underscores the differences between that and the instant case. First, in Eriwata the respondent had not held occupation of the land for very long and her dwelling was seemingly temporary in nature, taking on the appearance of a lean to affixed to a caravan according to photographic evidence submitted by the trustees. It was certainly not a house or dwelling in the commonly understood meaning of those terms. So there was no real history of occupation spanning more than intermittent use of a relatively short period of time. There was no suggestion in Eriwata that the respondent had been in occupation for almost three decades and that her immediate whānau had maintained a presence on the land for almost three quarters of a century. [43] Second, it was said that the respondent in Eriwata had also interfered with the then lessee of the land to the point where he warned that he might give notice to terminate his lease if nothing was done to cause the respondent to desist. Thus the respondent in Eriwata not only caused financial loss to the trust due to her own unlawful occupation, she was creating a significant financial risk for the trust with the potential loss of the lessee through her own conduct and that of her associates. [44] There is no evidence that the dwelling on Waipapa 1D2B3B is not a house for practical purposes. I did not understand that it was a temporary structure of the kind evident in Eriwata. Indeed, the claim of some $8,000 being spent on the dwelling suggests that it is a house and not temporary in nature. And unlike Eriwata in this case the trustees have acknowledged that Mr Flight and his whānau have occupied the land and its associated dwelling for a long period Aotea MB 163 (336 AOT 163) at MB 170

13 352 Aotea MB 223 [45] There is also no evidence that Mr Flight is interfering with any income generating activities on the land, with the exception of the 1,500 square metres he is occupying. So the comparisons with Eriwata are, as foreshadowed, are not entirely congruent. [46] In my assessment, it is certainly arguable that the payment of damages may be viable as a remedy in this case, given the particular circumstances including the reality that the occupation has been long standing and over several generations of the one whānau and apparently without serious opposition from the owners or their representatives until relatively recently; the trustees have sat on their rights for an extended period during the occupation by the whānau; and the impact of the occupation on the trust and its beneficiaries appears inconsequential there is no evidence to the contrary. [47] The counterpoint to that is whether or not policy considerations militate against owners, their whānau or hapū unilaterally occupying land administered by trustees without their consent. The precedents such unauthorised occupations might then set could be counterproductive to the interests of the beneficiaries of the trust as a whole. If any owners, their whānau or hapū acted in the same way the result in an extreme scenario would be chaos as the trustees would then lose control of the management of the land. [48] In the end, the trustees are the legal owners of the land. A fundamental incidence of such ownership must surely be the ability to lawfully exclude any person from use or occupation in accordance with the trustees duties including the duty to act prudently. 25 [49] On balance, I conclude that, in the particular circumstances of this case and in the absence of any detailed evidence on this possibility, damages are not likely to be an adequate remedy. How relevant is the parties conduct? Respondent s case [50] Mr Vane put the suggestion to the Court that the trustees, in declining to grant permission for Mr Flight to continue to occupy the site, were acting improperly. He also submits that his client s dwelling provides housing for owners and, in the absence of a compelling reason to do so, the trustees are in breach of the trust order by requiring his client 25 Nicholls v Trustees of the W T Nicholls Trust - Part Papaaroha 6B Block [2013] Māori Appellate Court MB 636 (2013 APPEAL 636); and Whaanga v Whaanga - Town Section 90 Mahia and Town Section 91 Mahia (2014) 42 Tairawhiti MB 292 (42 TRW 292)

14 352 Aotea MB 224 to vacate the land. At the very least he says they are not promoting one of the objectives of the trust to provide housing sites for owners. [51] Mr Vane accepts that the Court cannot compel the trustees to honour the settlement agreement reached between the parties on 3 September However, he argues that in the absence of any compelling reason or need for Mr Flight to vacate the land, coupled with the trustees failure to meaningfully engage in negotiations with the respondent post the settlement agreement, the Court can consider the removal of the present trustees and their replacement by the Māori Trustee in order that reasonable and objective consideration can be given as to whether the dwelling should remain on the land. [52] Mr Vane submits that the building report obtained by the trust formed the basis for the trustees view that the house was not for habitation and that gave rise to the belief that the trustees would or might have liability arising from the state of the dwelling. That belief, he says, became the impediment to the implementation of the settlement agreement entered into on 3 September Mr Vane further submits that, given that evidence has now been filed confirming that the building is habitable, the current application should be declined because the basis for it no longer exists. Applicant s case [53] Mr Koning refers also to cl 2, 3(xi) and (xii) of the trust order as being relevant to this application. He submits that cl 3(xi) is the key provision as it expressly relates to residential occupation on the block. Mr Koning adds that, per Eriwata, the trust is not required to achieve all objects in the trust order. Therefore, Mr Flight cannot argue that he must be given permission to occupy the site simply on the grounds that one of the objects of the trust under cl 2 is to provide for the better habitation of the block by the beneficial owners. [54] Under cl 3(xi), Mr Koning submits, the trustees have a discretion and beneficial owners are required to apply to the Court for an occupation order with the consent of the trustees. Mr Flight is not a beneficial owner and is therefore not entitled to be granted permission to occupy the block. The wording in the trust order requires that regard must be had to shareholding. Mr Flight is a beneficiary of a trust and there is no evidence that the whānau trust consents to the occupation. Mr Koning submits that the Court cannot grant an occupation per s 328 without the trustee s consent and in any event the respondent does not qualify per s 328(1). He further argues that s 329(1)(b), (2)(b) and (c) are particularly

15 352 Aotea MB 225 relevant in the present circumstances where Mr Flight is a non beneficial owner without the support of the whānau trust. [55] On that basis, Mr Koning submits that the trustees had not acted improperly or unreasonably per cl 3(xi) and contends that cl 3(xii) is not applicable in the present case as it concerns purposes other than residential occupation of the block. Counsel argued that the trustees have properly and reasonably exercised their discretion per cl 3(xii) of the trust order. Discussion [56] In considering whether to grant a permanent injunction the Court may take into account the parties conduct. In particular I have regard to the maxim that whoever comes to equity must come with clean hands. 26 I also note that the equitable principles of acquiescence and laches may disentitle the plaintiff to injunctive relief. 27 [57] Acquiescence is described by Thesiger LG in De Busshe v Alt as: 28 If a person having a right, and seeing another person about to commit, or in the course of committing an act infringing upon that right, stands by in such a manner as to really induce the person committing the act, and who might otherwise have abstained from it, to believe that he assents to its being committed, he cannot afterwards be heard to complain of the act. This is the proper sense of the term "acquiescence." [58] As to laches, the length of the delay and the nature of the acts of the plaintiff during the interval are crucial in determining the balance of justice or injustice between the parties. 29 In some cases an inference may be drawn as a matter of common sense that delay in making a claim has prejudiced the defendant. 30 [59] It is surprising that this issue of occupation had not been raised much earlier by the trustees. It also seems curious that the Flights had been permitted to occupy the land with a dwelling and out buildings in full view of the trustees for at least five decades, apparently without demur Andrew Butler, Equity and Trusts in New Zealand (2 nd ed, Thomson Reuters, Wellington, 2009) at (2)(c) Ibid Ibid Laws of New Zealand Equity (online ed) at [275] Ibid

16 352 Aotea MB 226 [60] Conversely, Mr Flight has not acted at all times in his own best interests it would appear. He too might have taken steps to formalise his occupation of the land. If the evidence is to be accepted he and his whānau have been in occupation of the current dwelling for almost 30 years. It might have occurred to him and this family that a more formal and permanent arrangement regarding their use of the land could have been entered into long before now. [61] In my assessment, neither party has deliberately acted improperly or in such an unreasonable or reckless manner as to warrant serious criticism from the Court in the context of the clean hands doctrine. While I have identified instances where they both might have done more earlier to bring clarity to the nature and extent of their historic, present and future relationships, I do not consider that either of them are prevented from seeking equitable relief due to any positive act of misconduct or otherwise that would disentitle either party from at the very least seeking relief. [62] As is so often the way with Māori land administration, informal arrangements and understandings may have been made some time ago. Those understandings may or may not have been misunderstandings viewed objectively well after the event. That neither party took any positive steps at seeking to enforce what legal rights may have existed is also unsurprising. My conclusion is that the parties conduct has been relevant and that none of it disentitles either from seeking equitable relief. [63] For completeness, I acknowledge counsel s submission on the trustees and the prospect of their removal for cause. That said, in my assessment, there is no serious application before the Court for the drastic remedy of removal per s 240 of the Act. There would need to be more evidence of breach of duties and the absence of any tenable defence let alone an application for relief before any real consideration could be given to the serious step of removal. Is hardship a relevant consideration? Respondent s case [64] Mr Vane contends that his client has a pressing and compelling need for the dwelling to remain on the land to house himself and his family and in particular his son who suffers chronic mental illness and who Mr Flight has responsibility for as his primary caregiver.

17 352 Aotea MB 227 [65] Mr Vane further submits that it would be inequitable to grant an injunction requiring Mr Flight to vacate the land and remove the dwelling. The settlement agreement provided a more reasonable basis for his client to remain on the land. Counsel argues that cl 3(xii) is not restricted in the manner suggested by the trustees. [66] He further argues that there is no compelling reason or need for Mr Flight to vacate the land, there is no pressing need or use for the land and the dwelling has existed on the land for over 75 years fulfilling one of the objectives of the trust namely the better habitation or use by beneficial owners and the provisions for any special needs of owners as a family group. Counsel accepts that Mr Flight is not a direct owner of the land but says he is an indirect owner by virtue of being a beneficiary of the Heremaia Whānau Trust which is an owner in the block. Mr Vane adds that Mr Flight has a strongly connection to the land and has been living on it since the late 1980s. Applicant s case [67] As foreshadowed, Mr Koning submits that the grant of a permanent injunction would likely be inconvenient and distressing for Mr Flight, but not oppressive. Mr Flight has occupied the site for 28 years and had not paid any rent to the trust. He has had the exclusive use and occupation of the site in return for paying a modest amount of rates. [68] Mr Koning reiterates that if the permanent injunction was not granted that would mean a non beneficial owner would prevail over the powers and responsibilities given to the trustees under the trust order and the Act. This he contends would be prejudicial and oppressive to the trust. Counsel suggests that s 17(2)(d) will apply and that the majority interest of the trust must be protected against the respondent as an unreasonable minority. Discussion [69] Hardship that may be caused to either or both the parties is also a consideration. 31 In that context I have considerable sympathy for the position of Mr Flight. In my assessment it does seem unduly harsh and arguably inconsistent with the role of the trustees to remove whānau from their land where they have an interest according to tikanga in circumstances where he and his whānau have been in occupation for many years and where that occupation has not been seriously challenged until relatively recently and has not caused significant economic loss to the trust. It is not as if he and his whānau are rāwaho outsiders or strangers to the land with no real connection or link. 31 Andrew Butler, Equity and Trusts in New Zealand (2 nd ed, Thomson Reuters, Wellington, 2009) at (2)(d)

18 352 Aotea MB 228 [70] It will also be remembered that the trustees were on the verge of reaching settlement with Mr Flight over his occupation until issues as to whether the dwelling was habitable became seemingly insoluble. To which Mr Flight responded by undertaking remedial work to ensure that the dwelling was habitable again. [71] In any event, it appears likely that the hardship occasioned to Mr Flight by the granting of a permanent injunction will be real and consequential. He says that if removed he and his son will have nowhere to go. Those circumstances are not to be regarded lightly. Mr Flight and his whanaunga have occupied the site for over 50 years. He has a strong connection to the land and would be required to remove all buildings, his possessions and his whānau from the site. This will inevitably involve considerable expense. [72] Moreover, it is unlikely that Mr Flight will have access to such resources given the delays in having the remedial works completed and taking into account the evidence on the Court file. If the injunction is granted and is rendered incapable of fulfilment by Mr Flight it seems unlikely that the trustees will wish to underwrite the removal costs involved. Failing that, then, as in Eriwata, the registrar and other relevant authorities may need to become involved if enforcement of any injunction is sought. [73] On the other hand, the trustees are the legal owners of the land and have the right to determine who may occupy the block. That right must be balanced against the objectives set out in the trust order including the duty to provide for dwelling sites. Even so, as Mr Koning has pointed out previously, the trust is not obliged to achieve all of its objectives at any one time and may be selective as to its approach. The trustees indeed have the right to prioritise their often scarce resources as the custodians of the land. Are alternative remedies available? Respondent s case [74] Mr Vane argues that, given that the Court determined Mr Flight to be the owner of the dwelling, no liability rests with the trustees thus the basis on which the notice to vacate was issue and the injunction application filed has now gone. Mr Vane also confirms that his client has undertaken remedial work to the dwelling such as to bring it into a reasonably habitable state or at the very lease to improve its habitable state. This work continues. Accordingly, counsel submits that there is no reason why the settlement agreement could not now be implemented.

19 352 Aotea MB 229 Applicants case [75] Mr Koning argues that if the permanent injunction was not granted that would mean a non beneficial owner would prevail over the powers and responsibilities given to the trustees under the trust order and the Act which would be prejudicial to the interests of the beneficial owners as a whole. This he argues would be oppressive to the trust. [76] Counsel reiterates that the trustees do not wish to lease the site to Mr Flight and have exercised their discretion not to allow him to continue to occupy the dwelling site. Discussion [77] I note that some emphasis was placed on the fact that Mr Flight is not a beneficial owner in the land rather he is the beneficiary of a whānau trust which is an owner in the land It is correct that s 328(1) does not allow occupation orders to be made in favour of beneficiaries of a whānau trust. The Court has previously been able to adopt a pragmatic approach and circumvent this anomaly by making orders in favour of trustees of the whānau trust who then grant a licence to occupy to the beneficiary, or the trust order may expressly grant the right of occupation to a specific beneficiary. 32 [78] There is no doubt that Mr Flight is a person connected with the land. The fact that he is a beneficiary of a whānau trust should not of itself completely disentitle him from being eligible for consideration for an occupation site. Moreover, the trust order provides that the trustees, may, at their discretion, lease, licence or provide for beneficial owners to personally occupy or grant licence to beneficial owner or blood relative. Mr Flight would certainly come within the provisions of this clause. [79] It is also accepted that Mr Flight should have obtained the support, ideally, of the whānau trust of which he is a beneficiary. That might have then diminished some of the trustees objections over the point that he is not an owner and had provided no evidence of the support of the whānau trust. [80] Mr Flight might have also taken steps to secure local authority support for the habitability of the dwelling. That too may have strengthened his case that the trustees, having agreed to enter into a licence previously, were now acting unreasonably by their refusal to accept such approval and the improvements he had made. If that had occurred 32 McCarthy Utakura 9 (2008) 124 Whangarei MB 84 (124 WH 84). This decision was followed in Larkin Wairau North 2F1 (2008) 124 Whangarei MB 90 (124 WH 90) and Milner and Hart Whanau Trust Takahiwai 7C1B (2008) 124 Whangarei MB 95 (124 WH 95)

20 352 Aotea MB 230 then the reasonableness of the trustees conduct might have also been subject to some form review. [81] For example, in Wrightson Ltd v Fletcher Challenge Nominees Ltd Fisher J considered that the exercise of a discretion may be set aside where a trustee has: 33 (a) (b) (c) (d) (e) acted in bad faith or for an improper motive; failed to exercise the discretion by considering the wrong question or misinterpreting the trust terms; considered irrelevant considerations; failed to consider relevant considerations; or reached a decision that is perverse or capricious. [82] I make no such findings on the present facts in the absence of further evidence and argument. Conclusion [83] This has been a very difficult case to decide. Neither party is wholly with or without responsibility for what has occurred. As foreshadowed, Mr Flight has not always acted in his own best interests given that there were steps he might have taken much earlier during these events that could have assisted his present position. He has undertaken remedial works to have the house deemed habitable he says but I was unsure of the presence of any relevant evidence from the local authority to recant an earlier negative view on this subject. Similarly, he infers that there is support from the whānau trust but has not produced any compelling evidence to support that assertion. [84] In his favour, there is uncontroverted evidence that Mr Flight s whānau have been in occupation of the land for well over a half century and in full view of the owners and the trustees for at least three decades. This has not been a case of occupation by stealth. That reality should count for something with the trustees in their deliberations. As mentioned previously, unlike the situation in Eriwata, this is no new occupation or one that lacks the permanency of a dwelling. [85] Then there are the personal considerations. If Mr Flight is to be believed, and I have no evidence to suggest that should not be so, he cannot afford to move the dwelling even if 33 Wrightson Ltd v Fletcher Challenge Nominees Ltd (1998)1 NZSC 40,388 at 40,413

21 352 Aotea MB 231 he wanted to make such a change. Should that be the case then the costs to remove the dwelling will likely fall to the owners through their trustees. In such a circumstance it must be considered what the gain to the trust would be for incurring such costs an extra 1,500sqm of land out of a 40 ha block currently administered by the trust. It hardly seems worth a candle. It is thus difficult to see that such an action and the incurring of such expenses would necessarily be prudent. Mr Flight also says, more seriously, that if he is forced to leave then he will have nowhere to live for either himself or his son who he says suffers from serious illness-hardly a desirable prospect on any basis. [86] Turning to the applicants position, the law provides that trustees, in the normal course of events, are entitled to the free and unencumbered use and possession of the trust property and to use it as they see fit in accordance with their duties to the beneficiaries, especially their duty of prudence and impartiality. By permitting Mr Flight to remain without securing some form of return for use of the land they may be open to challenge from their owners that they are not acting prudently and are favouring one owner over all the rest. They may also be faced with similar forms of conduct, of owners and their whānau simply occupying the land without the consent of the trustees. [87] Even so, the trustees were prepared to entertain a settlement with Mr Flight that might have seen the dwelling remain in situ, subject to important conditions. They were concerned about the lack of suitability of the house for human habitation. Yet Mr Flight says he has had the dwelling repaired so that those concerns can now be allayed. As to the prudent management test, it is likely that the actual area in occupation by Mr Flight some 1,500 sqm- is not going to provide a significant return to the trust in any case. Added to this is the fact that Mr Flight is not interfering with the activities of a principal lessee so as to cause economic loss, as was the case in Eriwata. Perhaps, of more significance, they have not taken any positive steps to seek to remove Mr Flight and his whānau before him for many long years. [88] In summary, it is evident that the peculiar set of circumstances in this case has rendered the issuing of a final decision from this Court, very difficult. Nonetheless I regret the delay in the issuing of this judgment in favour of the trust. Decision [89] Having regard to the overall circumstances of this case, the position of the respective parties and their conduct, I accept the argument, by a very narrow margin, that the application for a permanent injunction should now be granted.

22 352 Aotea MB 232 Pronounced at 4.30 pm in Rotorua on Thursday this 12 th day of May 2016 L R Harvey JUDGE