IN THE MĀORI LAND COURT OF NEW ZEALAND AOTEA DISTRICT A MOARI MARAEA BAILEY AND JULIAN TAITOKO BAILEY Applicants

Transcription

1 322 Aotea MB 67 IN THE MĀORI LAND COURT OF NEW ZEALAND AOTEA DISTRICT A UNDER IN THE MATTER OF Sections 18 and 231of Te Ture Whenua Māori Act 1993 Te Riri A Te Hore 2 Block BETWEEN AND MOARI MARAEA BAILEY AND JULIAN TAITOKO BAILEY Applicants THE MĀORI TRUSTEE Respondent Hearing: 23 April 2013 at 301 Aotea MB May 2014 at 321 Aotea MB June 2014 at 321 Aotea MB 207 Appearances: J Unsworth for the Applicants G Shaw for the Respondent Judgment: 11 July 2014 RESERVED JUDGMENT OF JUDGE L R HARVEY ON AN APPLICATION FOR JOINDER Solicitors: J Unsworth, Horsley Christie, P O Box 655Whanganui 4540 johnu@horsleychristie.co.nz G Shaw, Te Tumu Paeroa, P O Box 5038 Wellington 6145 greg.shaw@tetumupaeroa.co.nz

2 322 Aotea MB 68 Introduction [1] This decision concerns an application by Te Tumu Paeroa (the Māori Trustee) to join the former lessees, Kerry David Slight and Frances Cornelia Slight (the Slights), as respondents in the current application. The issue for determination is simply whether or not the application for joinder should be granted. Background [2] Moari Maraea Bailey and Julian Taitoko Bailey filed two applications in relation to Te Riri A Te Hore 2 Block on 15 December The first for replacement of trustees per s 239 of Te Ture Whenua Māori Act The second for a review of trust and recovery of costs for damages to land, per ss 231 and 18 of the Act. [3] The applications allege mismanagement of the block by the Māori Trustee in relation to deterioration of the land, in particular the failure of the Māori Trustee to ensure the terms of the lease were properly enforced. The applicants sought damages to restore the land to a manageable condition, and acted to have themselves appointed as responsible trustees to replace the Māori Trustee. [4] The Māori Trustee denies the claims. Counsel submits that he had fulfilled both his contractual and equitable obligations to the owners and acted appropriately in respect of his trusteeship at all times. Further, the Māori Trustee argued that it had not damaged the land by act or omission and had taken all reasonable steps to look after the land and enforce lessor obligations under the lease. If there had been any changes to the land the Māori Trustee submitted that those were natural changes not foreseeable or preventable by them. Procedural history [5] An initial hearing was held on 23 April 2013, where I made an order appointing the applicants as responsible trustees and Manu Tukapua as an advisory trustee. 1 The application for review of trust and recovery of costs was then adjourned for two months for the applicants to obtain legal advice. I granted further adjournments on 16 July 2013, 8 October 2013, 18 November 2013, and 21 January A teleconference was held on Aotea MB 281 (301 AOT 281) 305 Aotea MB 153 (305 AOT 153), 309 Aotea MB 163 (309 AOT 163), 312 Aotea MB 48 (312 AOT 48), 314 Aotea MB 273 (314 AOT 273)

3 322 Aotea MB 69 May 2014 and timetabling directions made for the filing of a more particularised claim and submissions in response. 3 [6] Counsel for the Māori Trustee subsequently filed a memorandum seeking an order of the Court to join the Slights as respondents and consequential directions. 4 At a teleconference held on 18 June 2014, I considered that the documents relating to the joining of the Slights as a party should be served on them, and I further indicated that a decision on the application would issue in due course. 5 That said, having carefully reviewed the relevant authorities I now incline to the view that while service prior to a determination on an application to join is preferable, it is not mandatory. Respondent s submissions [7] Mr Shaw submitted that the Mäori Trustee had now considered whether a third party contribution claim may be taken against the Slights as former lessees. In doing so, counsel contended that a third party notice and a third party claim could not be issued by the Māori Trustee within the parameters of the current application. He therefore considers that the Slights should be joined to the current proceedings. [8] Counsel submitted that the Slights could only be joined to the proceedings by the applicants or by the Court. As counsel for the applicants has indicated that they do not intend to do so, the Māori Trustee now seeks an order from the Court. Counsel also considers that unless the Slights are joined as a party and the Māori Trustee allowed to bring a claim against them, he will be prejudiced. Counsel further argues that joining the Slights will ensure the just and expeditious disposal of the application without any real prejudice to the applicants. [9] The Māori Trustee submitted that the Court could join additional parties in accordance with r 6.14 of the Māori Land Court Rules 2011 (the Rules), and pursuant to s 67 of the Act, could make such consequential directions as may be necessary. Counsel further argued that Part 9 of the Rules dealt with civil applications but did not make provision for claims made by a respondent against a third party. However, he also submitted that the power of the Court under r 9.1(2) of the Rules, to adapt or amend the procedures set out in rr Aotea MB 135 (321 AOT 135) Submissions of Counsel for the Māori Trustee, 5 June Aotea MB 207 (321 AOT 207)

4 322 Aotea MB to 9.4 to fit the circumstances of a particular case, should be applied in this case to make provision for cross-claims within the application. [10] Specifically in relation to prejudice, counsel submitted that the case against the Māori Trustee will necessarily rely on him satisfying the Court that the Slights remained in breach of the lease at lease expiry. As the Māori Trustee is no longer the responsible trustee of the block, counsel submitted that he no longer has standing to bring proceedings for breach of covenant against the Slights. Only the applicants, as current trustees, retain such a right. The election of the applicants not to pursue the Slights should not be allowed to prejudice the Māori Trustee s defence or potential relief. [11] Accordingly, Mr Shaw seeks an order to join the Slights as respondents. He also seeks the following directions: (a) (b) (c) (d) (e) The previous timetable directions be vacated; The applicants are to file and serve an amended claim on the Slights and the Māori Trustee as respondents by Friday 18 June; The Slights and the Māori Trustee are to have six weeks from the date of service to file and serve on each other party their respective responses to the claim; The Māori Trustee is to file and serve any notice of cross-claim within eight weeks from the date of service of the amended claim; and A judicial conference is to be convened with all parties in early September to consider next steps and further directions. Applicants submissions [12] The applicants submitted that they do not agree with the Slights being joined as respondents to the proceedings. They say this is because their claims are against the Māori Trustee for his alleged failings in relation to the proper administration and protection of the land. They submit that the issues around the condition of the land were initially raised with the Māori Trustee three years ago, and that he was allowed time to address those matters with the lessees before the expiry of the lease. The Māori Trustee therefore had ample time to pursue proceedings against the Slights but failed to do so. [13] The applicants further argued that in separate proceedings brought by them in relation to this block, the poor condition of the land was also raised with the Māori Trustee.

5 322 Aotea MB 71 In those proceedings the Māori Trustee denied that there were any breaches of the lease by the lessee. The applicants do not consider that the Māori Trustee can now seek to blame the former lessees and do not wish the proceedings to be delayed any further. [14] Counsel filed further submissions on 1 July In those submissions counsel confirmed the opposition of the applicants to the joinder application. While counsel accepted that the Court had jurisdiction to join parties in accordance with the Rules, they submitted that a party need not necessarily be joined as an applicant or respondent, but could be joined as a third party. Counsel submitted that if the Court was minded to join the Slights, then they should be joined as a third party rather than respondents. [15] Counsel also did not accept the contentions of the Māori Trustee that it necessarily lacks the standing to proceed against the Slights, if joined as a third party. As there was privity of contract between the Māori Trustee and the Slights, which endured for the duration of the lease, it was submitted that it is at least arguable that they have standing to bring a claim against the Slights. Such a claim could still be explored by joining the Slights as third parties. [16] Counsel further submitted that the applicants accept that the rights and/or liabilities of the Slights may be directly affected by the determination of the application. The applicants also confirmed that they had considered their rights carefully and concluded that they have a clear cause of action against the Māori Trustee. It was argued that the applicants are entitled to pursue a remedy against the respondents alone and ought not to be compelled to proceed against other parties. In support of this position counsel cited High Court authorities and submitted that those authorities should be considered by the Court given that r 6.14 of the Rules is similar to r 4.56 of the High Court Rules The Law [17] Rule 6.14 of the Rules provides as follows: 6.14 Court may strike out or add parties to application (1) At any time before or during a hearing, the Court may, either on the application of any party or on its own initiative, and on any terms that it thinks just, (a) strike out the name of a party improperly or mistakenly joined in the application; or

6 322 Aotea MB 72 (b) join or, with the consent of the party substituted, substitute as a party any person or class of persons that the Court considers necessary for the Court to hear and determine all the questions involved in the application. (2) A person must not be added as an applicant without that person's consent. [18] This rule provides that the Court may join as a party any person that the Court considers necessary to hear and determine all questions involved in the application. The Court may invoke such power at any time before or during a hearing, and can do so on the application of any party, or on its own initiative, and further on any terms that it thinks just. An application for joinder of a party is therefore not limited to the applicants and the Court. [19] In Gardiner v Gorringe Tauwhao Te Ngare, the Court heard an application by defendants for joinder of a third party. 6 In that case Judge Clark, in joining the third party to the proceedings, considered that the relevant matters on determination were: the fact that it would enable two sets of proceedings to be heard in one action; that the proposed third party played a central role in the dispute (which was accepted by both parties); and that there had been no delay on the part of the defendants in seeking to join the third party. [20] In Waihua Block when considering a costs application by one defendant against another, the Court made comment that although counsel alleged that the co-defendants encouraged joinder of his clients as defendants, in fact it was initially raised by the Court. 7 The Court further noted however that it was inevitable that that party had to be joined as a matter of procedure, to ensure that the litigation was properly conducted. [21] Rule 6.14 of the Rules is comparable to r 4.56 of the High Court Rules 2008: 4.56 Striking out and adding parties (1) A Judge may, at any stage of a proceeding, order that (a) the name of a party be struck out as a plaintiff or defendant because the party was improperly or mistakenly joined; or (b) the name of a person be added as a plaintiff or defendant because (i) the person ought to have been joined; or (ii) the person's presence before the court may be necessary to adjudicate on and settle all questions involved in the proceeding. (2) An order does not require an application and may be made on terms the court considers just. (3) Despite subclause (1)(b), no person may be added as a plaintiff without that person's consent. 6 7 (2008) 93 Tauranga MB 63 (93 T 63) (2003) 273 Rotorua MB 228 (273 ROT 228)

7 322 Aotea MB 73 [22] The principal distinction between the High Court and the Māori Land Court rules is the addition of the requirements in the High Court that the party to be joined ought to be joined or that their presence may be necessary to adjudicate on and settle all questions involved in the proceeding. In any case it is evident that the purpose of the joinder rules is to secure the determination of all disputes relating to the same subject-matter without the delay and expense of a separate proceeding. 8 [23] The traditional approach of the general Courts to joinder of defendants has been liberal. 9 The modern New Zealand approach is set out in McKendrick Glass Mfg Co Ltd v Wilkinson. In that case the Court set out the traditional practice of the courts of equity in relation to parties, and considered that if such equitable principles still applied in New Zealand then the parties in that case were properly joined: 10 It is the constant aim of a Court of equity to do complete justice by deciding upon and settling the rights of all persons interested in the subject of the suit, to make the performance of the order of the Court perfectly safe to those who are compelled to obey it, and to prevent future litigation. For this purpose all persons materially interested in the subject ought generally to be parties to the suit, plaintiffs or defendants, however numerous they may be, so that the court may be enabled to do complete justice by deciding upon and settling the rights of all persons interested [24] In relation to defendants seeking joinder, the Court in Mainzeal Corporation Ltd v Contractors Bonding Ltd heard an application by a defendant for joinder of a party as an additional defendant rather than a third party. In considering the application the Court said: 11 It seems quite clear that, at the very least, the defendant is entitled to have Monadelphous joined as a third party on the basis that, if the defendant were liable under its bond to the plaintiff, then that liability was caused by Monadelphous' poor performance of its contract with the plaintiff, that, therefore, Monadelphous should indemnify the defendant. [25] The Court in that case considered the test for joinder in such circumstances: 12 Held, (1) the test for joinder is: in respect of the party sought to be joined, will its rights against or liabilities to any party to the proceeding in relation to the subject matter of the proceeding be directly affected by any order which may be made in the proceeding? (2) Where a defendant applies for joinder of an additional defendant, the plaintiff's wishes are not decisive of the application, nor are they irrelevant even if the grounds for joinder specified in the rules are made out. Rather, the plaintiff s wishes and its possible liability for additional costs are factors in the exercise of the Court's discretion Brookers online commentary McGechan on Procedure (online ed) at [HR ] Ibid at [HR4.3.02] [1965] NZLR 717 (SC) at 723 (1989) 2 PRNZ 47, at 49 Ibid at p 47

8 322 Aotea MB 74 [26] More recently in Orion New Zealand Ltd v Earl P Smith Ltd, the High Court considered the application of r 4.56 in relation to a defendant joining a second defendant where the plaintiff was opposed. In the event the party in question was joined: 13 [29] I approach r 4.56 with the following considerations in mind: (a) (b) (c) (d) (e) The jurisdiction is inherently discretionary. Once the threshold within the jurisdiction exists (whether under limb (1)(b)(i) or (1)(b)(ii)) the usual practice of the Court will be to prefer the procedure which is most likely to be more convenient and to lead to the more efficient and expeditious disposition of the proceeding. Where a defendant seeks joinder of a defendant against the plaintiff s wishes, the plaintiff s consent is not required. There is something in the nature of a prima facie presumption that a plaintiff may sue the defendant it chooses. The plaintiff s wishes are a relevant consideration in exercise of the discretion, but are not decisive. The plaintiff s possible liability for additional costs is a factor relevant to the discretion. A plaintiff s wishes may, in the Court s discretion, be considered less significant where a plaintiff sues one of a number of cocontractors. The fact that the plaintiff s approach or the plaintiff s evidence may ultimately be such as to enable the proposed defendant to obtain entry of judgment against the plaintiff in its favour, or nonsuit at trial, does not of itself render inappropriate a joinder where the defendant has satisfied one of the threshold tests under r 4.56(1)(b). [27] While there is no specific procedure for applications for joinder the established practice is to serve existing parties but not the person sought to be joined. 14 The Court may also require that the parties proposed to be joined be served and this may be a sensible course of action. There is, however, no requirement to serve the proposed parties. 15 Discussion [28] The provisions set out in r 6.14 enables the Court to join any party it considers necessary to hear and determine all the issues involved in the application. The principal question is: does the Court consider that the involvement of the former lessees, the Slights, in the current proceedings is necessary to hear and determine all questions relating to the alleged damages resulting from the Māori Trustee s failure to rectify breaches of the lease? [2013] NZHC 1411 at [29] Brookers online commentary McGechan on Procedure (online ed) at [HR ] See Mainzeal Corp Ltd v Contractors Bonding Ltd (1989) 2 PRNZ 47, Standard Optical Co of Australasia Ltd (in receivership) v Charmant Optical Co Ltd HC Wellington CP1007/90, 14 May 1992

9 322 Aotea MB 75 [29] The applicants at this stage have not filed an amended statement of claim to particularise their allegations against the Māori Trustee. From the current pleadings it appears that the condition of the land directly relates to alleged breaches of the lease. So once again the question becomes can a proper investigation of such alleged breaches therefore be properly considered by the Court in the absence of evidence from the Slights? On balance, I think not. [30] The Slights leased the land. The Mäori Trustee was responsible trustee at the relevant times. It is alleged that the owners have suffered loss as a result of claims that the Mäori Trustee failed in his duties to properly oversee and ensure that the conduct of the lessees was consistent with the terms of the lease. The Mäori Trustee says that the role of the lessees, amongst other things, is central to any determination of liability. In my assessment, while the Slights may strongly disagree, I can see no apparent prejudice arising for the applicants if the Slights are joined. Moreover, it is probable that the Slights will be in a position to provide relevant evidence that may go to the heart of the present claims now. Decision [31] The application of Te Tumu Paeroa to join Mr & Mrs Slight is granted. [32] The claim documents are to be provided to Mr & Mrs Slight as soon as possible. [33] Counsel are invited to file a joint memorandum as to fresh timetabling directions within 14 days from the date of this decision. Pronounced in open Court at 4.20 pm in Rotorua on the 11 th day of July 2014 L R Harvey JUDGE