IN THE MĀORI LAND COURT OF NEW ZEALAND WAIARIKI DISTRICT A Kotahitanga Log Haulage Limited Applicant. P F Olsen Limited 2 nd Respondent

Transcription

1 121 Waiariki MB 149 IN THE MĀORI LAND COURT OF NEW ZEALAND WAIARIKI DISTRICT A UNDER IN THE MATTER OF BETWEEN AND AND AND Sections 22 and 269(4) of Te Ture Whenua Māori Act 1993 MANGAROA & OTHERS BLOCKS INCORPORATED - POWER OF THE COURT TO GRANT SPECIFIC PERFORMANCE & COMMITTEE OF MANAGEMENT Kotahitanga Log Haulage Limited Applicant Forest Distribution Limited 1 st Respondent P F Olsen Limited 2 nd Respondent Tuihana Pook, Katarina Powell, Con Jones, Karamea Insley, and Carl Ngamoki-Cameron as the Committee of Management for Mangaroa & Other Blocks Incorporation 3 rd Respondent Hearing: 5 May 2015 (Heard at Rotorua) 3 February 2015 (Heard at Tauranga) 19 December 2014 (Heard at Rotorua) Appearances: Mr M Beech & Ms Braddock for the first, second and third applicants Mr C Bidois, for the respondent Judgment: 05 May 2015 ORAL JUDGMENT OF JUDGE M J DOOGAN Copies to: Mark Beech, Holland Beckett Lawyers mark.beech@hobec.co.nz Curtis Bidois, East Brewster bidois@eastbrewster.co.nz

2 121 Waiariki MB 150 [1] I am conscious that this matter has been before the Court since late last year. The immediate issue that I am required to address is the question of jurisdiction. [2] I thank both counsel for their helpful submissions. Whilst the factual context is complex, the particular jurisdiction question is a narrow one and I think it is in the interests of all parties that the Court gives a prompt answer to that question. Therefore I am going to deliver an oral judgment on that jurisdiction question. Because it is an oral judgment, I reserve the right to tidy up or correct references but the substance of the decision will not change. [3] This case arises out of a forestry operation on Māori freehold land. The land in question is administered by the Proprietors of Mangaroa and Other Blocks Incorporated. 1 [4] The applicant, Kotahitanga Log Haulage Ltd ( KLH ), operates a log transport service. [5] The first respondent, Forest Distribution Ltd ( FDL ), is a forestry logistics manager and dispatcher. [6] The second respondent PF Olsen is a forest manager and the third respondents are members of the committee of management of the Mangaroa and Other Blocks Incorporated, ( the Incorporation ). [7] OTPP NZ Forest Ltd lease the land from the Incorporation for forestry purposes pursuant to a lease dated the 30 th of May Clause B(7)(1) of the lease requires OTPP to give preference to employing persons notified by the Incorporation. They must be given an opportunity to work on the land as and when a vacancy may arise. Clause B(7)(1) provides: Employment That subject to the lessee complying at all times with the law relating to the employment of persons and whenever during the currency of this lease the lessee needs to actually engage and employ staff, labour or contractors to fill any 1 Mangaroa, Ohotu N02B, Te Karaka 1, Te Karaka 2 and Part Lot 1 and Lot 2 Deposited Plan 11455AK.

3 121 Waiariki MB 151 vacancies to work on the said land then the lessee shall give not less that three (3) weeks notice of any such vacancies to the secretary of the lessor and shall use its best endeavours to give any person or persons advised to the lessee by the secretary of the lessor preference for any such vacancy or work PROVIDED HOWEVER that nothing in this clause shall apply to persons less that eighteen years of age or more that sixty years of age AND THAT notwithstanding the above provisions of this clause the lessee shall have the right at all times to dismiss any employee for misconduct dereliction of duty or unsatisfactory performance of duties and to decline to re-employ any person so dismissed. [8] PF Olsen is an agent for the lessee OTPP and acts as the forest manager on the land. FDL administers the logistical requirements for the forests including log cartage. FDL have a contract with PF Olsen for those services. [9] On 13 October 2012 the Incorporation passed a resolution offering support for KLH to be a log cartage contractor out of the forest. The Incorporation Chair then wrote to FDL on 22 October 2012 confirming the committee s expectation that KLH would be engaged to do log haulage out of Omaio forest as soon as possible. FDL subsequently entered into an oral log haulage contract with KLH. Pursuant to that agreement, KLH was provided with a volume of cartage equivalent to four truck loads per day subject to the availability of harvest. [10] Counsel for KLH, Mr Bidois, points to a number of documents which he says in late November or early December 2014, had the effect of terminating that contractual arrangement. 2 [11] The essence of the claim on behalf of KLH is that that termination was in breach of the terms of the employment clause in the lease. [12] The respondents by way of interlocutory application have applied to have this claim dismissed or alternatively, transferred to either the District Court or the High Court on the basis that this Court does not have jurisdiction because the claims are tortious or 2 from the Incorporation to KLH, 28 October 2014; and PF Olsen notice of termination to KLH, 3 October 2014.

4 121 Waiariki MB 152 contractual. There are no applicant parties with any interest in Māori land and the debt, demand or damage claimed does not relate to Māori land. [13] There was also an issue taken with the late filing of the amended statement of claim. However in submissions before me today, counsel confirmed that that matter was no longer pursued and neither was the dismissal application. If this Court accepted that jurisdiction was not established then the respondent parties seek transferral of this proceeding to an appropriate Civil Court. [14] The applicant filed an amended statement of claim dated the 28 th of January Mr Bidois helpfully summarised the heads of claim on his submissions dated the 4 th of May At paragraph 11 of those submissions, Mr Bidois, sets out first the claim in contract against FDL as follows: A claim in contract against Forest Distribution Limited ( FDL ). PF Olsen utilises the services of FDL to administer and despatch log transport work from the land. Assumed to be for administrative convenience, this does not relieve OTPP or PF Olsen of liability for performance of lessee s obligations contained in the employment clause. Whilst the claim against FDL is a simple claim for breach of contact the contract was granted in part-performance of the lessee s obligations and is therefore directly related to Māori freehold land. [15] The second head of claim was specific performance against PF Olsen and Mr Bidois submits: 11.2 A claim for specific performance against PF Olsen. This claim is brought against PF Olsen as agent for OTPP as lessee. This Court has a specific jurisdiction to award Orders of specific performance and / or make awards of damages. PF Olsen s contractual arrangements with FDL do not relieve PF Olsen from the legal requirement to perform or procure the performance of obligations in the employment clause. [16] The third head of claim is for tortious interference with the contractual arrangements and Mr Bidois submits:

5 121 Waiariki MB The claim for tortious interference with contractual arrangements. The evidence shows that on 3 November 2014, PF Olsen directed FDL to terminate the then existing contractual arrangements with the Plaintiff. This directive appears to have been given at the request of the Committee of Management for Mangaroa & Other Blocks Incorporation. If as the Respondents assert, the contractual arrangements between the Plaintiff and FDL did not involve PF Olsen (contrary to the evidence) then PF Olsen and the Committee of Management have unlawfully interfered with the contract. The contract itself being the performance of a lessee s obligations, the claim is directly related to Māori freehold land and the legal interest that the lessee and lessor hold in that land. [17] There are some complexities around the facts, not all of which I need to traverse for the purposes of the jurisdiction question. However I would refer to the following. Subsequent to what is referred to as the termination of the contract, a new arrangement was put in place whereby KLH were offered a reduced haulage of two trucks per day. That arrangement was recorded in correspondence in early December [18] Mr Beech for the respondent parties submitted that whether or not those new arrangements are regarded as a new contract, a novation or a variation of the previous contract, the fact remains that KLH does still have the benefit of employment pursuant to the employment clause in the lease. [19] Mr Bidois pointed to the fact that following what is alleged to be the unlawful termination of the original contract his client was under an obligation to mitigate loss. Currently harvesting continues at the forest and KLH operate at present, but under the reduced load of two trucks per day. [20] There was also some reference in the evidence as to the extent to which the committee of management had initiated a review of employment arrangements in the forestry operation based on a mistaken assumption that the existing arrangements, including the arrangements for log haulage, were due to or about to expire. [21] The issue of jurisdiction turns upon interpretation of section 18(1)(d) of Te Ture Whenua Māori Act. Section 18(1)(d) provides:

6 121 Waiariki MB (1) In addition to any jurisdiction specifically conferred on the Court otherwise than by this section, the court shall have the following jurisdiction; (d) To hear and determine any proceeding founded on contract or on tort where the debt, demand, or damage relates to Māori freehold land [22] Mr Bidois clarified, in submissions, that in this case the claim centred not on debt or demand, but contract or tort in respect of damage that relates to Māori freehold land. [23] Mr Beech had submitted that the jurisdiction of this Court does not extend to a commercial or contractual dispute between parties who have no shareholding in Māori land. As I understand the facts, whilst either all or the majority of the shareholders in KLH are shareholders in the Incorporation, KHL itself is not a shareholder. [24] Mr Bidois in his submissions points out that there is no authority to say that the Court s jurisdiction under 18(1)(d) is expressly or impliedly restricted only to persons who are owners of Māori freehold land. As Mr Bidois points out, the only limitation is that the debt demand or damage must relate to Māori freehold land. [25] For reasons that follow, I do not think I need to determine that point but I would record that I tend to agree with Mr Bidois that absent, a clear direction in the legislation it does not seem to me that there is a jurisdictional threshold requirement that a claim for a debt demand or damage, under 18(1)(d) is to be read as restricted to those with ownership interests in Māori freehold land. [26] I accept the submission that the key issue in this case is whether or not the debt demand or damage relates to Māori freehold land. [27] Counsel helpfully referred the Court to a number of cases. Two in particular address this issue of relationship to Māori freehold land. [28] The first is the decision of Judge Harvey in the Churton case. 3 That case involved an application under section 18(1)(d) for return of stock, and access to the trust s land to remove any stock that may still be there and compensation for any stock that had been lost, 3 Mangaporou Trust, at 132 AOT

7 121 Waiariki MB 155 sold or taken. Compensation was also sought for any benefits gained by the trust from the stock following the termination of an agreement under which the applicant in that case had been occupying the trust s land. In that case the applicant had submitted that the rights claimed by the trust as owner of the land, clearly relate to that land. Therefore any rights the trust acquired or obtained by reason of agreements to occupy the trust s land also relate to the land. Denying access to the applicant s stock and subsequent acquisition or sale of that stock was in breach of contract or acts that gave rise to an action for recovery of the stock or for compensation. [29] Essentially the argument was that the rights claimed by the applicant arose from agreements which centre on the land and as a result, section 18(1)(d) was invoked. The trustees in that case argued that section 18 read as a whole, in particular section 18(1)(a) related to ownership or possession of Māori freehold land and did not provide jurisdiction in relation to matters such as stock on the land. To invoke the 18(1)(d) jurisdiction and the words, relates to Māori freehold land would require an interpretation that claims in respect of stock grazing on the land are issues relating to the land and that this wider interpretation is not supported by a broader reading of the act which the trust submitted limits the Court s jurisdiction to issues related to land or the ownership of land and not to moveable chattels such as stock. There was an absence of any authority to support jurisdiction in a case such as that dealing with stock related claims. [30] Judge Harvey accepted the submissions of the trust and said: I am not persuaded that the framers of the act intended section 18(1)(d) to be applied in the manner suggested by the applicant. To permit the applicant s claims to advance at this juncture would be to place a meaning on the phrase relates to that travels beyond a plain and ordinary reading of those words. The fact that neither counsel could find any relevant supporting authority simply underscores this interpretation. Similarly, there is nothing in section 17 of the act concerning general objectives that in my view, assists the applicant in the context of his alleged stock losses. [31] Judge Harvey therefore declined jurisdiction.

8 121 Waiariki MB 156 [32] The second case is a decision of Judge Clark s in the case of William Gardiner. 4 This case concerned a claim based on allegations of breach of contract or negligence in relation to re-grassing of a block of Māori land by a third party. The stock owned by the third party had caused damage to a crop on the land. The defendants who were agricultural contractors and farmers, and the third party agreed that the third party would re-grass the block instead of paying financial compensation. [33] The work that was then done was not to standard. Essentially it was argued that the third party was negligent in sowing the seed, selecting it and controlling weeds, managing the new pasture, and a claim resulted. In that case Judge Clark was also required to consider section 18(1)(d) and the phrase relates to Māori freehold land. It was argued that simply because a contract for services was carried out on Māori land does not mean that damages or losses relate to Māori land. [34] Judge Clark at paragraphs 65 and 66 of his judgment noted an Employment Court decision where the phrase relates to was considered. The Employment Court concluded that it meant significantly referable to. Judge Clark at paragraph 67 concluded as follows: I accept that the damage, meaning the disadvantage or detriment, suffered by the defendant s as a result of the tortious act or omission, of the proposed third party is significantly referable to Māori freehold land for the following reasons: (a) The plaintiffs allege that the defendant s have breached a covenant contained in a lease relating to the re-establishment of pasture on a block of Māori freehold land. (b) The defendant s entered into an agreement whereby the proposed third party was contracted to carry out re-grassing on the same block of Māori freehold land. (c) The defendant s allege that the proposed third party was negligent in the cultivation and sewing of grass seed on the same block of Māori freehold land. (d) The defendant s allege that the proposed third party by act and/or omission was negligent in the control of weed growth and in the management of grass on the same block of Māori freehold land. (e) The defendant s say that if they have breached a term of the lease, (which they deny) the damage caused to both plaintiff s and themselves was caused by the negligent acts and omissions of the proposed third party. 4 William Gardiner v Gorringe, 93 Tauranga MB

9 121 Waiariki MB 157 [35] Judge Clark goes on to note that Judge Harvey s decision in the Churton case came to a different conclusion. Judge Clark had this to say at paragraph 68: I am mindful that Judge Harvey in the in re Churton decision was of the view that the Court did not have jurisdiction in the particular circumstances of that case. That case can be distinguished from the present case on the basis that the losses and damage contended for in that case related to chattels namely moveable stock. The crucial difference in this case, are the acts and omissions of the proposed third party in the cultivation re-grassing management of re-growth and grass all took place on, and in relation to a block of Māori freehold land. [36] Judge Clark on that basis concluded that jurisdiction was established. [37] In terms of those two cases the Gardiner case is, in terms of the facts, more akin to the facts of the present case as it concerns a contract for services which occur or take place on Māori freehold land. As in this case, the alleged breaches arise in respect of a lease, over Māori freehold land. Judge Clark had concluded in the Gardiner case that the issues were significantly referable to the Māori freehold land, essentially because the actions required involved re-grassing, re-sowing of the land itself. Judge Clark distinguished Judge Harvey s decision on the basis that that case dealt with movable property, or chattels (in that case stock). [38] In this case the contract in issue relates to the transport of logs from the land. Logs are similar to any other crop or grass, they also are a product growing on the land. At the point at which the logs are harvested, it is common ground in terms of the submissions of counsel that the logs at that point can be regarded as movable chattels on the land. [39] Clause C-11 of the lease provides as follows: Contractors and forest produce That for the purposes of this lease and by virtue of these presents the lessee shall during the term hereof have all necessary power and authority by its agents, servants, contractors and sub-contractors to cut remove and dispose of forest produce from the said land; (but limited only to such time as this lease shall remain in full force and effect) the property in all exotic trees and forest produce therefrom

10 121 Waiariki MB 158 whether severed from the soil or not as a result of this provision shall (subject always to the rights of the lessor against the lessee for payment of the rent and Stumpage hereby reserved and any other monies payable or forest produce transferable by the lessee in terms hereof) be and remain with the lessee. [40] That clause makes it clear that subject to compliance with the terms of the lease and the payment of stumpage the property in the trees themselves is reserved to the lessee. [41] In this particular instance the damage complained of is said to be the termination of the contract. It is argued that the employment clause, once activated, could not be terminated whilst there was still available volume other than in accordance with the last part of the employment clause, which essentially restricted the rights of the lessee to terminate other than on specified grounds. They are set out in the employment clause and limit that right of dismissal to misconduct, dereliction of duty of unsatisfactory performance of duties and include the right to decline to re-employ any person so dismissed. [42] Essentially in the absence of those circumstances, it is argued that the benefit of the employment clause should have continued (providing there was available volume to harvest). [43] There are some issues that arise in terms of the contractual chain. In this case the immediate contractual relationship is not between the lessee and KLH. I acknowledge that there are some complex issues as to those relationships. However leaving those to one side and focussing simply on the issue of jurisdiction in terms of section 18(1)(d), and assessing whether or not the damage said to arise from the termination of the contract sufficiently relates to Māori freehold land so as to trigger jurisdiction, I conclude that the relationship is not sufficiently direct so as to bring the claim as pleaded in the amended statement of claim within the ambit of section 18(1)(d). [44] I have considerable sympathy for the applicant s position and I understand why, on a broad reading of the employment clause in the lease, it would appear that the benefit of the employment clause and its objective of providing employment opportunities for shareholders should be sufficient to make the claim clearly within the jurisdiction of this Court. However, on my reading of the relevant cases and the relevant provisions, I am

11 121 Waiariki MB 159 drawn to the conclusion that the relationship of the damage complained of to the Māori freehold land is not sufficiently direct. I believe on the facts that it comes closer to the situation considered by Judge Harvey in that the subject matter of the contract or damage relates to moveable stock or chattels rather than to the land itself. [45] I would also note that section 24A of Te Ture Whenua Māori Act confers on the Court comparable jurisdiction to that enjoyed by the High Court in relation to the Contracts (Privity) Act 1982 and specified provisions of the Contractual Remedies Act However, subsection (2) of that section provides that the jurisdiction granted may be exercised only if the occasion for the exercise of that power arises in the course of proceedings properly before the Court under section 18(1)(d). [46] Having concluded that jurisdiction is not established pursuant to 18(1)(d), related claims for relief under the Contracts (Privity) Act 1982 and Contractual Remedies Act 1979, would not be available to this Court under s 24A of Te Ture Whenua Māori Act. [47] I also note for completeness that on my understanding of the facts, there does seem to be a range of related issues both as to the nature of the contractual arrangements and the various parties involved that would, in my view, more properly be dealt with by the Civil Courts. In terms of the interpretation I have applied to section 18(1)(d), I note the Court of Appeal s consideration of the jurisdiction of this Court in the Attorney General and Māori Land Court case (the Tahora case). 5 Whilst not specifically on section 18(1)(d), the Court of Appeal does highlight the importance of reading section 18 in its entirety and in its context. In particular, the primary objectives of the Court being to promote and assist retention of Māori land and general land owned by Māori, and in promoting the effective use management and development of land on behalf of the owners. [48] Whilst this particular claim does not raise any clear issue with regards to retention, and nor specifically with effective use, management or development, I can acknowledge the applicant s view that the employment clause itself would have been put into the lease with, among other things, the objective of trying to provide shareholders with opportunities for employment arising from the forestry operation on the land. However I regret that even with that in mind, I do not consider that taking a broad interpretation, it would be open to 5 Attorney-General v Māori Land Court [1999] 1NZLR689(CA).

12 121 Waiariki MB 160 me to properly conclude that this particular claim or the damage said to arise from the termination of the contract relates to Māori freehold land, in the way that section 18(1)(d) is framed. [49] So therefore I conclude that jurisdiction is not established. The application is for the Court to exercise the power under section 18(2) to transfer the proceeding to the appropriate Court of Civil jurisdiction. [50] Leave is reserved for Mr Bidois to indicate whether his client wishes to have the matter transferred to the District or High Court. Upon receipt of that indication I will make the necessary order in Chambers. [51] Counsel for the respondents may submit a memorandum as to costs within 10 working days. Mr Bidois to respond within 10 working days. Pronounced in open Court in Rotorua this 5 th day of May M J Doogan JUDGE