NICHOLLS v NICHOLLS & ORS AS TRUSTEES OF THE AHU WHENUA TRUST KNOWN AS THE W T NICHOLLS TRUST [2020] NZCA 346

NICHOLLS v NICHOLLS & ORS AS TRUSTEES OF THE AHU WHENUA TRUST KNOWN AS THEW T NICHOLLS TRUST [2020] NZCA 346 [13 August 2020]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA23/2019[2020] NZCA 346BETWEEN GEORGE TAMA NICHOLLSAppellantAND MARK STEVEN NICHOLLS, AIRINIPIRIHIRIA TUKERANGI, DELACEWILLIAM JAMES, KAHUTOROAMATAIA TUKERANGI, VIV TAMANICHOLLS, ANITA MARI NORMANAND SARAH JANE NICHOLLS ASTRUSTEES OF THE AHU WHENUATRUST KNOWN AS THE W T NICHOLLSTRUSTRespondentsHearing: 5 May 2020Court: Brown, Clifford and Gilbert JJCounsel: J P Kahukiwa for AppellantD E Wackrow and C M T Linstead-Panoho for RespondentsJudgment: 13 August 2020 at 2.30 pmJUDGMENT OF THE COURTA The appeal is dismissed.B There is no order for costs.____________________________________________________________________REASONS OF THE COURT(Given by Brown J)Introduction[1] The appellant (Mr Nicholls) and his brother were co-owners (among others) ofMāori freehold land at Oamaru Bay until 15 August 2011 when that land was vestedin an ahu whenua trust, the W T Nicholls Trust (the Trust). The respondents arethe trustees of the Trust (the Trustees). Having obtained an injunction restrainingMr Nicholls and others from occupying the land, the Trustees sought an order forrecovery of rental income received by Mr Nicholls and his brother and an order thatthey pay mesne profits for their unlawful occupation.[2] On 21 December 2017 the Māori Land Court made orders pursuant to ss 215and 220 of Te Ture Whenua Māori Act 1993 (the Act) requiring:1(a) for the period prior to the constitution of the Trust, Mr Nicholls and hisbrother to account to the Trustees for the amount of $442,593.00, lesstheir share (as co-owners) calculated on a pro rata basis(liability order 1); and(b) for the period following the constitution of the Trust, Mr Nicholls topay to the Trustees the amount of $391,824.00 (liability order 2);in both instances with interest at the rate of five per cent.[3] Mr Nicholls' appeal to the Māori Appellate Court was dismissed in a judgmentdelivered on 7 December 2018.2[4] Mr Nicholls now appeals under s 58A of the Act challenging the jurisdictionof the Māori Land Court and the Māori Appellate Court to make liability order 1 andthe manner of assessment of both liability orders.1 Nicholls v Nicholls – Koromatua 3A (2017) 154 Waikato Maniapoto MB 128 (154 WMN 128)[Māori Land Court judgment].2 Nicholls v Nicholls – Koromatua 3A [2018] Māori Appellate Court MB 604 (2018 APPEAL 604)[Māori Appellate Court judgment].Factual background[5] The genesis of this protracted litigation was noted by the Māori AppellateCourt in an earlier judgment in the dispute in this way:3[7] This unfortunate case arises from longstanding division withinan extended whānau fortunate enough to receive a substantial land inheritancefrom their grandparents generation. That inheritance included land anddwellings, a farm at Paeroa, a farm at Coromandel, land at Koputuaki Bay,Pohukua Island and other Māori freehold land. The lands that are subject ofthese proceedings are beachfront and hilltop land at Oamaru Bay andan adjacent commercial caravan park and holiday flats.(Footnote omitted.)We briefly summarise the background which is recited in detail in the several previousjudgments.[6] The ten children of Mr Nicholls' grandfather, Wiremu Tawhia Nicholls,succeeded to his considerable land interests. In the case of the beachfront land and22.87 hectare camping ground, known as the Oamaru Bay Caravan Park and TouristFlats the subject of this appeal (the Oamaru Bay land), each sibling was allocateda tenth share. In due course Mr Nicholls and his siblings became co-administrators ofthe share of their father, Wiremu Uru Nicholls.[7] From some time in 2008, Mr Nicholls (together with some others) occupiedthe Oamaru Bay land without the consent of the majority of owners. A number ofco-owners, who had not been in possession of the Oamaru Bay land at the time ofMr Nicholls' occupation, sought an injunction in the Māori Land Court for trespassunder s 19 of the Act.[8] In a judgment dated 5 October 2009 declining the application, Judge Coxheadexplained that in the normal run of cases involving Māori land, co-owners cannot bringan action for trespass against another co-owner unless the legal ownership of the landis vested in a trust or incorporation for the reason that co-owners have equal rights topossession of the land.4 While noting there may be special circumstances where one3 Nicholls v Nicholls – Papaaroha 6B [2013] Māori Appellate Court MB 598 (2013 APPEAL 598).4 Nicholls v Nicholls – Papaaroha 6B (2009) 120 Hauraki MB 116 (120 H 116) at [96].co-owner may be successful against another in an action for trespass, the applicantscould not sustain such an action when they were not in possession at the time ofthe challenged occupation.5[9] However Judge Coxhead observed:[112] The respondents have taken, what I consider to be a very selfishapproach to these land blocks. They also seek to use "tikanga" arguments tojustify their presence on the lands. It became clear to me that this was notabout tikanga. They have used intimidation actions to get on the land,potentially at the expense of the WT Nicholls Estate and possibly atthe expense of Estate lands.The Judge directed that the Court was to facilitate a meeting of owners to considerwhat might be an appropriate structure for the administration of the Māori freeholdland of the W T Nicholls Estate.[10] Consequent upon those meetings, on 15 August 2011 the Māori Land Courtmade an order under ss 215 and 219 of the Act establishing the Trust as an ahu whenuatrust. At the same time a vesting order was made under ss 220 and 222 of the Actvesting the relevant land in the Trustees.[11] On 24 October 2012 the Trustees filed a fresh application against Mr Nichollsand the other occupiers of the Oamaru Bay land seeking orders for recovery ofthe land, injunctive relief and orders for recovery of rental income and mesne profits.On 21 December 2012 Judge Coxhead granted an injunction under s 19(1)(a) ofthe Act restraining Mr Nicholls from entering or occupying the lands comprisingthe Oamaru camping ground without the consent of the Trustees and under s 20(d)an order for recovery to the Trustees of the Oamaru Bay land.6 Mr Nicholls wasdirected to provide documentation concerning rental and other income received.75 At [105].6 Nicholls v Nicholls (2012) 50 Waikato Maniapoto MB 10 (2012 WMN 10).7 See [81] below.[12] Mr Nicholls' appeal against that judgment was dismissed on 3 October 2013with reasons to follow.8 In the reasons for judgment delivered on 22 November 2013the Māori Appellate Court made the following concluding observations:9[118] The parties to these proceedings and the beneficiaries of theWT Nicholls Trust are the fortunate recipients of substantial taonga tuku iho.Regrettably the divisions within the whānau have led to a prolonged period offighting over this legacy. Very substantial sums have been spent on litigation.The litigation will address immediate rights but it will not restore relationshipsor supplant the absence of respectful tikanga within the whānau that willensure that this legacy is properly managed in honour of the tūpuna who havegone before and uri to come. He kai a te [rangatira] he kōrero. It is time forthe whānau to turn towards each other and away from the Courts.[13] Mr Nicholls lodged an appeal to this Court from the Māori Appellate Courtjudgment. However his appeal was deemed abandoned on 6 June 2014, he havingfailed to lodge a case on appeal and apply for a fixture in accordance with r 43 ofthe Court of Appeal (Civil) Rules 2005.[14] Compliance with the directions of Judge Coxhead concerning rental and otherincome received was deferred pending the outcome of the appeal to theMāori Appellate Court. On 3 December 2013 Mr Nicholls filed a memorandum andan affidavit which provided unsubstantiated figures for the total income received fromcaravans, cabins and the campground and expenditure for the 2011, 2012 and 2013years.[15] The Trustees then filed a memorandum requesting the Court of its owninitiative make orders for the provision of information from other sources, namely theBank of New Zealand and Hauraki Taxation Service Ltd. On 9 June 2014Judge Coxhead made orders pursuant to s 69(2) of the Act requiring:10(a) the production by the Bank of New Zealand of all bank statements forthe accounts held in the name of the Oamaru Bay Holiday Park and theOamaru Bay Family Holiday Park from 1 January 2008; and8 Nicholls v Nicholls [2013] Māori Appellate Court MB 515 (2013 APPEAL 515).9 Nicholls v Nicholls – Papaaroha 6B, above n 3.10 Nicholls v Nicholls – W T Nicholls Trust (2014) 78 Waikato Maniapoto MB 107 (78 WMN 107)at [28].(b) the production by Hauraki Taxation Service Ltd of any documentswhich Mr Nicholls had provided to them for the preparation of accountsfor the Oamaru Bay Holiday Park and the Oamaru Bay Family HolidayPark business.Still further directions designed to obtain relevant information were made on29 October 2014 and 13 February 2015.11[16] On 25 June 2015 the Māori Land Court engaged Jefferies Nock and Associates,chartered accountants, to carry out a review and analysis of the financial accounts ofthe Oamaru Bay Holiday Park, and provide a report to the Court regarding its income,expenditure and overhead obligations. That report filed on 2 May 2016 indicated thatover a seven year period from 2009 to 2015 gross income had been derived of$834,000.00 (GST exclusive).[17] In support of their claim the respondents commissioned a mesne profitsvaluation assessment from Deane and Co Ltd, chartered accountants. Their reportdated February 2017 identified a total mesne profit loss of $394,216.00 for the period15 August 2011 to 14 January 2014. In respect of the period prior to 15 August 2011the mesne profits loss was assessed by the Trustees to be $342,370.00.12The Māori Land Court judgment[18] The Trustees claimed for recovery of rental income in the amount of$442,593.00 for the period prior to the Trust's constitution from Mr Nicholls and hisbrother and $391,824.00 for the period post-constitution from Mr Nicholls solely.They also claimed mesne profits of $342,370.00 for the period prior to the Trust'sconstitution and $394,216.00 post-constitution.11 Nicholls v Nicholls – W T Nicholls Trust (2014) 88 Waikato Maniapoto MB 205 (88 WMN 205);and Nicholls v Nicholls – W T Nicholls Trust (2015) 93 Waikato Maniapoto MB 74 (93 WMN 74).12 This figure was obtained by subtracting from $689,466.00 (the losses for 2009-2015) the amountof $347,096.00. However the Trustees' assessment appears to include the mesne profits loss forpart of 2014 and all of 2015. We calculate the amount to be $283,469.00.[19] Judge Coxhead commenced by noting the conclusions in the report of JefferiesNock and Associates:13[9] In summary, the report analysed five bank accounts over a seven-yearperiod. The report found that there was a total income of $834,000 (excludingGST) received through the bank accounts and a net surplus of just over$500,000 was calculated (ignoring purported lease rental expenditure whichcould not be verified). Assets of $43,212 have been acquired, although theircurrent state and value are uncertain. Significantly, the report found that therewere personal drawings taken from the Oamaru Bay Holiday Park accountsestimated to be at least $400,000 between the 2009 to 2015 financial years.[20] In relation to the income received prior to the Trust's constitution,Mr Kahukiwa for Mr Nicholls contended that the Court did not have jurisdiction tomake an order in favour of the Trustees because the rental income did not come froman interest in land but from contractual arrangements between Mr Nicholls anditinerant users of the land who were licensees. It was said that the arrangements weretherefore in personam and did not run with the land.[21] Judge Coxhead concluded that there was nothing in s 220 that suggested thatthe use of land by a co-owner or third party could not be seen as a right "in respect ofthe land" in terms of s 220(2). Adopting the approach of the Māori Appellate Courtin Monschau v Bamber, the Judge concluded that the Trustees were able to recoverrental income on behalf of the co-owners for the period prior to the constitution ofthe Trust.14[22] Citing Eriwata v Trustees of Waitara SD Sections 6 & 91 Land Trust the Judgeconcluded that subsequent to the constitution of the Trust Mr Nicholls (and the otherrespondents) no longer had rights as co-owners because the legal title to the OamaruBay land was vested in the Trustees.15 As beneficial owners Mr Nicholls (and theother respondents) no longer had power to control the use and occupation of the land.Hence they had no right to receive the rental income and they were required to accountfor it.13 Māori Land Court judgment, above n 1.14 At [40], citing Monschau v Bamber – Tahorakuri A No 1 Section 33A2 [2016] Māori AppellateCourt MB 286 (2016 APPEAL 286).15 At [27]–[28], citing Eriwata v Trustees of Waitara SD Sections 6 & 91 Land Trust – Waitara SDSections 6 & 91 (2005) 15 Aotea Appellate MB 192 (15 WGAP 192) at [5] and [8].[23] However the Judge concluded that the claim for mesne profits for wrongfuluse and the claim for compensation in terms of the rentals derived were overlappingclaims.16 While satisfied that the grounds for an award of mesne profits had beenmade out, the Judge declined to make such an award for the reason that it wouldrequire the respondents to pay twice.17 Orders were made to the effect of those detailedin [2] above. An order was made under s 24B of the Act for an award of interest atfive per cent on the amounts ordered to be paid.The Māori Appellate Court judgment[24] The Māori Appellate Court agreed with Judge Coxhead that in the period priorto the formation of the Trust Mr Nicholls owed a duty to account to the other ownersfor the revenue received in excess of his share, citing the following extract fromNew Zealand Land Law:18Where one co-owner has received more than his or her share of the rents [or]revenues from the common property, the Statute of Anne imposes a liabilityto account for the excess so received to the other co-owner(s). In Hendersonv Eason a distinction was drawn between rents and other revenues actuallyreceived from a tenant or third party, which must be accounted for, and, on theother hand, profits a co-owner might make through his or her use andoccupation of the co-owned property, which he or she may retain [25] The issue whether on the constitution of the Trust any right to an account hadbeen transferred to the Trustees received greater attention. The Court rejectedMr Kahukiwa's argument that Monschau was not binding, stating:[22] It is trite law that the Act must be interpreted and applied in a mannerthat furthers the principles and objectives set out in the Preamble, ss 2 and 17.These include the retention of land in the hands of the owners, andthe effective use, management and development of the land by or on behalf ofthe owners. An ahu whenua trust is established where the Court is satisfiedthat the constitution of the trust would promote and facilitate the use andadministration of the land in the interests of the persons beneficially entitledto the land. We affirm the principle in Monschau that s 220 must be consideredin light of the principles and objectives set out in the Preamble, ss 2 and 17 ofthe Act, and also in accordance with the purpose of an ahu whenua trust pers 215(2).16 At [61].17 At [64].18 Māori Appellate Court judgment, above n 2, at [12], quoting Tom Bennion and othersNew Zealand Land Law (2nd ed, Brookers, Wellington, 2009) at [6.6.07].[23] The difficulties of administering multiply-owned Māori land whereno management structure is in place is well known to this Court.The principles of unity of possession between co-owners can often give riseto disputes between owners as to the utilisation, occupation and developmentof the land. The constitution of an ahu whenua trust was intended to empowerthe owners through the election of trustees with the authority to achievethe effective utilisation of their lands. Section 220(2) provides that the landor other assets are vested in the trustees "together with all rights and remedies(if any) to which the owners were entitled in respect of the land immediatelybefore the vesting". We have found that the owners were entitled to revenuearising from the operation of the camp ground before the vesting. This isa right and remedy contemplated by s 220(2), which transferred to the trusteesbecause of the vesting order.(Footnote omitted.)[26] The Court also rejected Mr Kahukiwa's contentions that the right to an accountof revenue is not a right in respect of land but is a right in personam, and that no rightsor remedies were transferred to the Trustees in this case because the vesting order didnot expressly vest those rights and remedies in them. The Court considered thatthe correct interpretation of s 220(2) was that a vesting order need not make expressthe preservation of rights or remedies, an interpretation which the Court consideredgave effect to the principles and objectives of the Act as well as the purpose of anahu whenua trust.19[27] The Court also rejected the argument that a deduction should be made forexpenses incurred by Mr Nicholls in the operation of the campground andan allowance for his efforts, observing that Mr Nicholls had not produced evidencedemonstrating what a reasonable deduction should be or evidence of time and effortput into running the campground.20 Turning to the issue of a duty to account to theTrustees following the constitution of the Trust, the reasoning of the Court differedfrom that of the Māori Land Court. The Court observed that when a trust is created,the trustees are the legal owners of the land. The previous owners then becomebeneficial owners. There is no corresponding duty for a beneficial owner to accountto the legal owner for revenue derived from the operation of the land.21 Although therelevant principles were recognised by Judge Coxhead in following Eriwata, the Courtconcluded that the Judge erred in granting an order requiring Mr Nicholls, a beneficial19 At [26]–[30].20 At [33]–[37].21 At [41].owner, to account to the Trustees, the legal owners, as if he owed to them a duty toaccount for revenue.[28] The Court noted that Eriwata established that a beneficial owner making useof the land without authority from the trustees commits a trespass and thatthe Māori Land Court had previously found that Mr Nicholls had trespassed when itgranted an injunction prohibiting him from entering or occupying the campgroundland.22[29] The Court considered that damages should have been calculated on amesne profit basis in the amount of the higher figure of $394,216.00 stated in theDeane and Co Ltd report. However as the difference from $391,824.00 was negligiblethe Court declined to increase the award.23 The appeal against the award of interestwas also dismissed.24The issues on appeal[30] In addition to challenging the key conclusions in the judgment of theMāori Appellate Court, the notice of appeal asserted that the Court erred in respect ofliability order 1 by attributing to co-owners an entitlement to an account derived fromthe Statute of Anne (as interpreted in Henderson v Eason)25 when that statute had beenimpliedly repealed in New Zealand by the Imperial Laws Application Act 1988.[31] In a memorandum seeking leave to file a notice of appearance the respondentssignalled that they intended to support the finding of a duty to account for reasonsother than those contained in the judgment including that, whilst the Statute of Anneis no longer on the New Zealand statute book, the equitable principle which itembodied has survived.[32] The respondents further recorded that, while supporting the Māori AppellateCourt's findings upholding the post-Trust award, they contended that both an account22 At [42]–[43].23 At [46].24 At [49].25 Henderson v Eason (1851) 17 QB 701, 117 ER 1451.and a mesne profits approach to damages were available to them and that it was theirchoice as to which measure was to be adopted.[33] In the fortnight prior to the appeal hearing Mr Kahukiwa filed amendedsubmissions in which he invited this Court in effect to revisit the finding ofJudge Coxhead in 2012 that following the Trust's acquisition of the propertyMr Nicholls was a trespasser. Unsurprisingly this new line of argument was opposedby the Trustees. In a minute of 1 May 2020 we recorded that we would not hearargument seeking to impugn prior judgments to which the appellant was a party whichhad not been the subject of appeal. Similarly we do not address the contention whichappears to be advanced in the Trustees' submissions that as a result of ousterMr Nicholls was a trespasser in the period prior to the vesting of the property inthe Trust.[34] The parties were unable to settle on an agreed list of issues and filed separatelists. In light of the earlier finding that subsequent to the vesting of the property in theTrust Mr Nicholls had committed a trespass, shortly prior to the hearing Mr Kahukiwaelected not to pursue the argument that the Māori Land Court did not have jurisdictionunder s 18 of the Act to make an order in respect of the period followingthe constitution of the Trust.[35] With the benefit of focussed oral argument, we identified the following issuesfor determination:(a) In New Zealand does a co-owner of property have a duty to account toother co-owners for income derived from the property?(b) Does the Māori Land Court have jurisdiction under s 18(1) of the Actto make an order for such an account?(c) Did the Trustees have standing to seek an order for an account bythe previous co-owners in respect of the period prior to the constitutionof the Trust?(d) Was there an error in the process of determination of liability orders 1and 2?(e) Did the Trustees have a right of election in respect of the mode ofassessment of damages in liability order 2?A co-owner's duty to account for profits from shared property[36] Mr Kahukiwa criticised the Māori Appellate Court's judgment for apparentlyaccepting s 27 of the Administration of Justice Act 1705 (Eng) 4 & 5 Ann c 3, oftenreferred to as the Statute of Anne, as the source of a co-owner's duty to account. It wascommon ground in argument before us that, so far as it applied in New Zealand, thatstatute was repealed by the Imperial Laws Application Act.[37] It was apparent from the lengthy extract from Principles of Real Property Lawin the Māori Land Court judgment that Judge Coxhead appreciated the state of thestatute book. That extract included the following paragraph:26By s 27 of the statute 4 and 5, c 3, (generally referred to as the Administrationof Justice Act 1705), one co-owner formerly had the right to recover fromanother co-owner any rent or other revenue received from some tenant or thirdparty in excess of that other co-owner's share. This provision has now beenrepealed as a part of the law of New Zealand without being replaced by amodern provision to the same effect. Various effects have been attributed tothis repeal, and the result remains uncertain.[38] By contrast, the judgment of the Māori Appellate Court, which contained theshort extract from New Zealand Land Law27 and a significantly longer quotation fromHenderson v Eason,28 could be read as proceeding on the footing that the Statute ofAnne still applied in New Zealand. For this reason Mr Kahukiwa submitted that anerror of law on the part of the Māori Appellate Court was apparent from the judgment.[39] Ms Linstead-Panoho responded that the Court was aware of the repeal,pointing to excerpts from the transcript of the hearing on 11 May 2018 where the issuehad been traversed. She submitted that, notwithstanding the passages quoted in26 Māori Land Court judgment, above n 1, at [29], quoting G W Hinde and others Principles of RealProperty Law (2nd ed, LexisNexis, Wellington, 2014) at [13.002].27 Bennion and others, above n 18, at [6.6.07]. See at [24] above.28 Henderson v Eason, above n 25.the judgment, there was merely a failure of expression by the Court. She drewattention to the fact that the Court had made reference to its earlier judgment inMonschau which set out the passage to which Judge Coxhead had referred in theMāori Land Court decision.29[40] We accept the Trustees' argument that, despite the infelicitous drafting,the Māori Appellate Court must have appreciated that the 1705 Act no longer appliedin New Zealand. Nevertheless the source of a co-owner's duty to account whichthe Māori Appellate Court must have accepted is not apparent from the judgment.The identification of that source was the primary focus of this aspect of the appeal.[41] Mr Wackrow submitted that the Statute of Anne had not been the only sourcefor the duty to account between co-owners, drawing attention to the proposition inMeagher, Gummow and Lehane's Equity: Doctrines and Remedies:30Apart from statute, in equity there is ancient but frequently forgotten authority,Strelly v Winson, that one co-owner could be sued in account, but perhaps onlyat the suit of all the others.(Footnote omitted.)[42] Strelly v Winson concerned the scenario where one of three part-owners ofa ship refused to "fit out the ship to sea", the others did so without his consent and theship was lost in the voyage. 31 Lord Keeper held:32In this case the loss of the ship shall be equally borne by all three; for thoughone of the partners did not consent to the fitting out of the ship, yet he wouldhave been entitled to one-third part of the freight, and in this court should havehad an account of the third part of the profits of that voyage: and so whereone tenant in common receives all the profits, he shall account in this court asbailiff to the other two for two-thirds.[43] Mr Wackrow then drew attention to two decisions of the New South WalesCourt of Appeal. In the first of those, Forgeard v Shanahan, to which Mr Wackrowhad referred in the course of argument before the Māori Appellate Court, a majority29 At [37] above.30 J D Heydon, M J Leeming and P G Turner Meagher, Gummow and Lehane's Equity: Doctrinesand Remedies (5th ed, LexisNexis Butterworths, Australia, 2015) at [26–130].31 Strelly v Winson (1685) 1 Vern 297, 23 ER 480 (Ch).32 At 297.of the Court of Appeal concluded that there did not seem to be any action in equitywhich would render a co-owner in occupation liable to refund rents received.33Meagher JA described Strelly v Winson as a solitary and curious decision, beingan Admiralty case which seemed to have wandered into the Chancery courts.34Dissenting, Kirby P explained that the Statute of Anne could be safely repealed bythe Imperial Acts Application Act 1969 (NSW) because modern notions of equityrender the instruction of the Statute of Anne unnecessary in contemporarycircumstances.35[44] However eight years later in Ryan v Dries a differently constituted Court ofAppeal expressed the obiter view that Strelly v Winson is good authority forthe proposition that a court exercising equitable principles would treat a co-ownercollecting rent as an agent for all co-owners and liable to account to them.36[45] We consider that the view expressed in Ryan v Dries and by Kirby P inForgeard is the preferable view. We accept that Strelly v Winson is authority forthe proposition that in equity a co-owner is liable to account to other owners for profitsreceived from the shared property.[46] Indeed recognition of the fact that equity is the source of a duty by co-ownersto account is to be found in the judgment of this Court in Coleman v Harvey.37Somers J (with whose judgment Cooke P and Richardson J agreed) discussedthe Statute of Anne in this way:38It has to be recognised, however, that there is a respectable line of authoritysupporting the proposition that in the case of sale by one co-owner the remedyof the other does not lie in an action for conversion. One enactment touchedon the point. Under s 27 of the Administration of Justice Act 1705 (describedin the Revised Statutes and 2 Halsbury's Statutes of England (2nd ed) as 4 &5 Anne c 3, but frequently referred to as chapter 16) actions of account couldbe brought and maintained by one joint tenant or tenant in common as againstthe other as bailiff "for receiving more than comes to his just share orproportion". Section 27, referred to in Jacobs v Seward (1872) LR 5 HL 464,was repealed in England by the Law of Property (Amendment) Act 1924.33 Forgeard v Shanahan (1994) 35 NSWLR 206 (CA).34 At 222.35 At 212.36 Ryan v Dries [2002] NSWCA 3, (2002) 10 BPR 19,497 at [65] per Hodgson JA.37 Coleman v Harvey [1989] 1 NZLR 723 (CA).38 At 730.It must, I think, have been in force in New Zealand by virtue of theEnglish Laws Act 1908 and remained so, despite its repeal in England, untilJanuary 1989 when the Imperial Laws Application Act 1988 came into force.The latter statute preserves only ss 9 and 10 of the 1705 Act. In equity aco-owner has been held liable to account at the suit of others: Strelly v Winson(1684) 1 Vern 277.Jurisdiction under s 18(1) to order an account[47] In the judgments of both the Māori Land Court and the Māori Appellate Courtit appears to have been assumed that the general jurisdiction in s 18 of the Actempowered the making of an order for account. Mr Nicholls took issue with thatassumption, making the point that the jurisdiction of the Māori Land Court is statutory.Unlike the High Court, it has no inherent jurisdiction, in particular equitablejurisdiction.[48] The general jurisdiction of the Māori Land Court is conferred by s 18 which,to the extent relevant to this head of argument on appeal, provides:(1) In addition to any jurisdiction specifically conferred on thecourt otherwise than by this section, the court shall have thefollowing jurisdiction:(a) to hear and determine any claim, whether at law or inequity, to the ownership or possession of Maorifreehold land, or to any right, title, estate, or interestin any such land or in the proceeds of the alienationof any such right, title, estate, or interest:(b) to determine the relative interests of the owners incommon, whether at law or in equity, of any Maorifreehold land:(c) to hear and determine any claim to recover damagesfor trespass or any other injury to Maori freeholdland:(d) to hear and determine any proceeding founded oncontract or on tort where the debt, demand, or damagerelates to Maori freehold land:[49] A detailed definition of "alienation" in relation to Māori land is found in s 4.Although it includes the making or grant of any lease or licence of Māori land, itexcludes the granting of such a lease or licence or any interest in Māori land for a termof not more than three years, including any term or terms of renewal.[50] Mr Kahukiwa submitted that s 18(1)(a) has no application because:(a) the duty to account for money received is not an interest in land (moneybeing neither fructus naturales nor fructus industrials); and(b) the monies received were not the proceeds of an alienation, insteadbeing money paid by itinerant users or licensees for periods ofsignificantly less than three years and thus not characterised asalienations for the purposes of the Act.[51] It was submitted that s 18(1)(c) was not applicable because in the period priorto the constitution of the Trust Mr Nicholls was not a trespasser, reliance being placedon among other things the judgment of Judge Coxhead of 5 October 2009.[52] Mr Kahukiwa further submitted that s 18(1)(d) could not apply because:(a) there is no contract between Mr Nicholls and the respondents, whetherin their capacities as Trustees of the Trust or in their personal capacitiesas co-owners; and(b) there was no finding that Mr Nicholls committed some other tort whichwas not trespass.[53] It followed that the Māori Land Court lacked jurisdiction to entertainan application for an order that Mr Nicholls account for profits received in the periodprior to the constitution of the Trust. Such a limitation of competence was said to beacknowledged in effect by the provision in s 18(2) that any proceedings commencedin the Māori Land Court may be removed for hearing into any other court of competentjurisdiction.[54] In response Mr Wackrow argued that the order for account was not a moneyclaim per se. It came within the ambit of s 18(1)(a) as a claim for possession ofMāori freehold land where one of the remedies sought was the recovery of moneyderived from the profitable use of that land. While recognising that s 18(1)(c) wouldnormally be invoked in respect of a stranger, nevertheless, to the extent to which theclaim against Mr Nicholls is based on trespass, it was contended that s 18(1)(c) alsohad application in the circumstances of this case.[55] As Mr Wackrow observed, the several elements of s 18(1)(a) are expresseddisjunctively. Further, we note the advice in s 2(1) that it is the intention of Parliamentthat the provisions of the Act shall be interpreted in a manner that best furthersthe principles set out in the Preamble. The English version of the Preamble states:Whereas the Treaty of Waitangi established the special relationship betweenthe Maori people and the Crown: And whereas it is desirable that the spirit ofthe exchange of kawanatanga for the protection of rangatiratanga embodied inthe Treaty of Waitangi be reaffirmed: And whereas it is desirable to recognisethat land is a taonga tuku iho of special significance to Maori people and, forthat reason, to promote the retention of that land in the hands of its owners,their whanau, and their hapu, and to protect wahi tapu: and to facilitatethe occupation, development, and utilisation of that land for the benefit of itsowners, their whanau, and their hapu: And whereas it is desirable to maintaina court and to establish mechanisms to assist the Maori people to achievethe implementation of these principles.The long title of the Act states that it is a statute to reform the laws relating to Māoriland in accordance with the principles set out in that Preamble.[56] Furthermore, s 2(2) states:Without limiting the generality of subsection (1), it is the intention ofParliament that powers, duties, and discretions conferred by this Act shall beexercised, as far as possible, in a manner that facilitates and promotesthe retention, use, development, and control of Maori land as taonga tuku ihoby Maori owners, their whanau, their hapu, and their descendants, and thatprotects wahi tapu.Both the Preamble and s 2 were invoked by Mr Wackrow in support of the Trustees'argument on the next issue of the Trust's standing but we consider they are of no lesssignificance on the issue of the Māori Land Court's jurisdiction.[57] In our view the application originally commenced on 24 October 2012incorporated a claim in equity to the possession of Māori freehold land, seekinginjunctive relief prospectively and an account of profits already derivedretrospectively. We reject the proposition that the request for an order for account wasa money claim simpliciter. On the contrary it was a claim invoking the equitablejurisdiction collateral to an application for injunctive relief.[58] Mr Wackrow also advanced a detailed argument directed to the application ofs 18(1)(c), contending that in the period prior to the constitution of the Trust there wasclear evidence of ouster on the part of Mr Nicholls such that he would be viewed asa trespasser. Given our conclusion as to the jurisdiction of the Māori Land Court onthe basis of s 18(1)(a), resort to the ouster argument (which we do not considerappropriate to entertain)39 is unnecessary. However, as the election not to pursuethe jurisdictional challenge to liability order 2 reflected, the Trustees' claim in respectof the period following the constitution of the Trust falls within s 18(1)(c).The Trustees' standing in respect of liability order 1[59] The Trust was constituted as an ahu whenua trust under s 215(1) of the Act.Section 215(2) provides that an ahu whenua trust may be constituted where the Courtis satisfied that the constitution of the trust would promote and facilitate the use andadministration of the land in the interests of the persons beneficially entitled tothe land. The land, money, and other assets of an ahu whenua trust shall be held intrust for the persons beneficially entitled to the land in proportion to their severalinterests in the land.40 The constitution of an ahu whenua trust shall not affect anyperson's entitlement to succeed to any beneficial interest in any land vested inthe trustees for the purposes of the trust.41[60] The focus of this aspect of the appeal is s 220 which relevantly provides:220 Vesting order(1) On constituting any trust under this Part, the court may, by order, vestthe land and other assets in respect of which the trust is constituted inthe responsible trustees or a custodian trustee upon and subject tothe trusts declared by the court in a separate trust order.(2) The vesting order shall take effect according to its terms to vestthe land or other assets in the person or persons named in the order,39 See [33] above.40 Section 215(5).41 Section 215(8).solely or as joint tenants, as the case may require, without anyconveyance, transfer, or other instrument of assurance, together withall rights and remedies (if any) to which the owners were entitled inrespect of the land immediately before the vesting but subject to anylease, licence, mortgage, charge, or other encumbrance to whichthe land or assets may be subject at the date of the making of the order,and the fact that the land or other assets is or are held by that personor those persons on trust shall be stated in the vesting order.[61] The vesting order made on 15 August 2011 simply stated that orders were madepursuant to ss 220 and 222 of the Act that the Māori freehold blocks listed in sch Awere vested in the main trustees as responsible trustees jointly with no survivorship.[62] Mr Kahukiwa challenged the Māori Appellate Court's conclusion outlined at[24]–[26] above and invited us to adopt the interpretation of Judge Savage at firstinstance in Monschau.42 In that case the trustees of an ahu whenua trust soughtan order that one of the owners had to account for rent received from a lease to a thirdparty prior to the constitution of the trust. Judge Savage determined:[20] My finding therefore is that the co-owners only had a right tomoney. The transaction that created that right involved the land, but the rightto the money is not a right in relation to the land. The right would continueeven if the co-owners no longer had any rights in relation to the land. There isno link.I therefore hold that the Court could not pass these co-owners' rights tothe incoming trustees in the circumstances of this case.Judge Savage recorded that he was not at all comfortable with that conclusion andsuggested that it was a matter that the legislature should consider in the review ofthe Act.43[63] On appeal the Māori Appellate Court took a different view stating:44[51] We consider the lower Court erred in finding that the claims advancedby the appellants were solely claims in respect of money rather than"in respect of the land". We acknowledge that the remedy sought bythe appellants is a monetary remedy, but that is often what is sought by lesseesunder a breach of lease, by mortgagees where there is a breach of mortgage,42 Monschau v Bamber – Tahorakuri A No 1 Section 33A2 (2015) 125 Waiariki MB 260(125 WAR 260).43 At [21].44 Monschau v Bamber, above n 14.or by those who have the benefit of an easement where they have beenprevented from receiving the benefit of such easement. These remediesdepend on interests in land. A claimant might also seek remedies such asspecific performance. It is not the nature of the remedy that makes the claimone "in respect of the land." Rather, it is its connection with the land thatdetermines whether, in the context of the Act, it is one which seeks to preserveor give effect to the rights of the owners in relation to the land.[64] Consequently, the Māori Appellate Court interpreted s 220(2) as givingthe Court jurisdiction to vest the Trustees with all rights and remedies of the ownersthat existed prior to the constitution of the Trust, concerning or involving their rightsas owners to control or use the land, but subject to the encumbrances listed inthe section.45[65] The Māori Appellate Court in the present case adopted the same approach.We consider it was correct to do so.Was there error in the process of determination of liability orders 1 and 2[66] The focus of this aspect of the appeal was the process adopted by theMāori Land Court in its determination of the quantum of the liability orders.46Ground 1.2 of the notice of appeal alleged that Mr Nicholls was denied a fair hearingonly in respect of liability order 2. However the issue whether deductions should havebeen made for expenses, profit and effort was identified in the Māori Appellate Court'sjudgment as applicable to both the pre-trust and post-trust periods. Hence we haveconstrued the appellant's argument as applying to both liability orders.The approach of the Māori Appellate Court[67] It is convenient at the outset to recite in full the passages from theMāori Appellate Court judgment which are the target of the appellant's criticism:47Should deductions have been made from any award pre-trust?[31] In the alternative, Mr Kahukiwa contended that if an award is to bemade requiring the appellant to account to the trustees, proper deductions45 At [54].46 While the formulation of this issue was drafted by this Court, both the appellant's andthe respondents' lists of issues framed this question in terms of "process".47 Māori Appellate Court judgment, above n 2.should be made for expenses incurred in the operation of the camp ground,and an allowance for the appellant's effort.[32] We accept that where revenue is recoverable by other co-owners,the respondent co-owner may have a claim for the expenses incurred ingenerating that income. Requiring the respondent co-owner to account forthe gross revenue may result in an unjust enrichment for the other co-owners.We also accept that, in some circumstances, an allowance may be made forthe owner's effort and contribution in generating the income.[33] However, the appellant did not lead evidence in the Court belowestablishing and quantifying the costs incurred that he says should bededucted. Nor did he lead evidence, expert or otherwise, quantifyinga deduction for effort.[34] Mr Kahukiwa contended that the failure to file this evidence lies withthe Court below. He submits the Judge should have framed the case on thisbasis, and directed or at least signalled to the appellant that this evidence wasrequired. We do not agree. It was always for the appellant to frame andprepare his case, not the Judge. As the person owing the duty to account,he should have led clear and cogent evidence of where reasonable deductionsshould be made. He did not.[35] The Judge did order the production of all relevant financialinformation concerning the camp ground from the bank, and the accountant,and ordered discovery by the appellant and others. The appellant was clearlyon notice that these financial records were relevant, and was ordered to givediscovery of the documents in his possession or control.[36] The Judge also engaged an accounting firm, Jefferies Nock &Associates, to carry out a review and analysis of the camp ground financialrecords, and provide a report regarding its income, expenditure and overheadobligations. This report does list some expenses incurred. However,Mr Jefferies states in his covering letter that he could not accurately ascertainexpenditure items as he was not provided with source documents. Theseexpenses have been carried forward from draft general ledgers, prepared byHauraki Taxation Services ("HTS"). HTS did not receive a lot of requiredinformation or documents and so their analysis was not finalised. It is notclear what source documents or information HTS relied on. We cannot besatisfied that the expenditure noted in the Jefferies report was actually andproperly incurred in running the camp ground.[37] The same applies to any proposed deduction for effort. We are notconvinced this is a case where such a deduction should properly be made.Even if it were, the appellant has not produced evidence demonstrating whata reasonable deduction should be. In short, there is a similar lack of evidenceof the time and effort that the appellant put into running the camp ground.[38] We cannot be confident about the proper quantum of deductions foreither expenses or effort, and therefore make none. Nor do we consider itnecessary or appropriate to send the matter back to the Court below for furtherhearing. There is a need for finality in litigation. The appellant had theopportunity to furnish the information earlier in the process. Theseproceedings have consumed the time and resources of the parties for manyyears, and so it is necessary that they are concluded.[39] In any event, the obligation is on the defaulting party to producecogent evidence demonstrating where reasonable deductions should be made.The Court below attempted to obtain this information by ordering theproduction of documents, ordering discovery, and by appointing Mr Jefferiesto prepare his report. He attempted to do so but was unable to verifyexpenditure as no source documents were provided. The appellant cannot nowseek a further hearing to try and fill the evidential holes in his earlier case.There is no basis to send this back for further hearing when the appellant hadfull opportunity to present this evidence. This is also consistent with thedecision of this Court in Wihongi v Samson - Otarihau 2B1C.[40] Finally, Mr Kahukiwa contended a further deduction should be madefor profit earned by the appellant. He cited Henderson v Eason which drewa distinction between rent and other revenue received from a tenant or thirdparty, which must be accounted for, and profits a co-owner might makethrough the use or occupation of the co-owned property, which he or she mayretain. The revenue in this case was obtained through use of the property bya third party namely the guests staying at the camp ground. This was nota profit the appellant made through his own use and occupation. The appellantis entitled to retain his share of the revenue based on his shareholding as anowner in the land. Judge Coxhead provided for this in his decision that theappellant is to account for the revenue less his share (as co-owner) calculatedon a pro-rata basis. The appellant is not entitled to retain additional revenueas profit.Should deductions have been made from any award post-trust?[47] Like the situation pre-trust, Mr Kahukiwa argued that deductionsshould have been made from the award post-trust for expenses and effort.However, the same evidential problems apply. The appellant failed to takethe opportunity to provide any relevant evidence before the Court below.Accordingly, we decline to make deductions in these circumstances.(Footnotes omitted.)The appellant's argument[68] Mr Kahukiwa submitted that the right to a fair hearing incorporatesthe principle of equality of arms, in particular that a party must have a reasonableopportunity of presenting his or her case to the Court under conditions which do notplace him at a disadvantage. It followed in his contention that a reasonable opportunityincludes being made aware of what the Court expects to hear from a party in order toresolve the issue fairly. Also said to be relevant was the principle that in relation toequitable remedies such as an account "an inquisitorial process is adopted, to ensurethat equity is done".[69] Posing the question "Did George receive a fair hearing?", Mr Kahukiwasubmitted:26. The [Māori] Appellate Court determined that the onus was onthe unrepresented appellant to frame his case, since it was he whoowed the duty to account. In doing so it shifted the burden of proofto George, who in effect was the defendant. No authority was cited tosupport this.27. As a remedy in equity was being pursued (an account), the[Māori] Land Court was bound (at least in terms of process) to assumea more equitable process, rather than adversarial.28. This was not done. George was not directed to produce evidenceabout his own circumstances during his operation of the CampingGround (including his costs, risk, losses, improvements), and despitethe trust being over all of the relevant lands of this [Whānau]the Trustees were not required to account for the financial dealings inrelation to the Camping Ground and the other lands in the decadepreceding 15 August 2011. As a result, the process was inadequate,and unfair to George.[70] Mr Kahukiwa contended that the Māori Land Court did not apply the Statuteof Anne-inspired process in that it failed to undertake an audit by way of inquiry,preferring instead to run an adversarial process in which Mr Nicholls had the onus toaccount for monies received. In particular he drew attention to s 27 of the Statuteof Anne:48XXVII. And be it enacted by the authority aforesaid, That from and after thesaid first day of Trinity term, actions of account shall and may be brought andmaintained against the executors and administrators of every guardian, bailiff,and receiver; and also by one joint tenant, and tenant in common; his executorsand administrators, against the other, as bailiff for receiving more than comesto his just share or proportion, and against the executor and administrator ofsuch joint tenant, or tenant in common; and the auditors appointed by thecourt, where such action shall be depending, shall be, and are herebyimpowered to administer an oath, and examine the parties touching the mattersin question, and for their pains and trouble in auditing and taking such account,have such allowance as the court shall adjudge to be reasonable, to be paid bythe party on whole side the ballance of the account shall appear to be.The nature of an account[71] Although from at least the year 1200 there was an action of account atcommon law, as explained in Meagher, Gummow and Lehane an action of account was48 Reference was also made to the chapter on Account in William Selwyn An Abridgement of theLaw of Nisi Prius (10th ed, V and R Stevens and G S Norton, London, 1842) vol 1.developed by the Chancery which became progressively more attractive as itscommon law counterpart became more Byzantine.49 This was partly because ofthe difficulty attending the process under the old writ of account but primarily due tothe advantage of compelling the party to account upon oath according to the practiceof the Courts of Equity.50[72] Today an account of profits is viewed as a restitutionary remedy which operatesto strip a defendant of unlawful gains. The purpose of an account of profits is not topunish the defendant but to prevent his or her unjust enrichment.51 The term profitsdenotes net profits: the defendant will usually be entitled to deduct legitimateexpenses against gross receipts.52 The focus on profits is apparent from Strelly vWinson:53 for though one of the partners did not consent to the fitting out of the ship,yet he would have been entitled to one-third part of the freight, and in thiscourt should have had an account of the third part of the profits of that voyage: and so where one tenant in common receives all the profits, he shall accountin this court as bailiff to the other two for two-thirds.[73] However the entitlement to deduct expenses is subject to the defendantadducing evidence as to the expenses incurred. As stated by Blanchard and Tipping JJin Chirnside v Fay when discussing the decision of the High Court of Australia inWarman International Ltd v Dwyer:54[131] Their Honours emphasised that the rule requiring accounting forprofits could be taken to the extreme of becoming a vehicle for the unjustenrichment of the plaintiff. They made the important point that the onus is onthe errant fiduciary to satisfy the Court that an allowance should be made.[74] Where a defendant fails to discharge that onus, the Court will not speculate asto possible expenses. This is demonstrated by this Court's judgment inCrampton-Smith v Crampton-Smith.5549 Meagher, Gummow and Lehane's Equity: Doctrines and Remedies, above n 30, at [26–005].50 Attorney-General v Mayor of Dublin (1827) 1 Bli NS 312 at 336–337, 4 ER 888 (Ch) at 898 perLord Redesdale.51 Peter Devonshire Account of Profits (Thomson Reuters, Wellington, 2013) at 8.52 At 11.53 Strelly, above n 31, at 297.54 Chirnside v Fay [2006] NZSC 68, [2007] 1 NZLR 433, citing Warman International Ltd v Dwyer(1995) 182 CLR 544 (HC).55 Crampton-Smith v Crampton-Smith [2011] NZCA 308, [2012] 1 NZLR 5.[70] The difficulty in the present case is that the sister made no attempt toplace before the court any evidence to support the making of an allowance forthe cost and effort involved in the construction of the townhouses. There isno room to permit the sister to have any further opportunity to presentevidence on that subject. The hearing in the High Court was not split asbetween the issues of liability and quantum. If the sister had wished toadvance the case for an allowance to be made, then the trial in the High Courtwas the time to do so. No explanation was offered for her failure to giveevidence. Moreover, her counsel informed us explicitly that, even if a furtheropportunity were afforded to the sister to present evidence on this subject, shewould not be in a position to place any such evidence before the Court.He said these were counsel's instructions.[71] In these circumstances, it is not for the court to speculate as to howsome form of just allowance might be made. In some cases, the court may bein a position to make some form of "rational approximation" of the profitwhich has been made. However, as Lord Mustill said in Ryde Holdings Ltd vRainbow Corporation Ltd:If the profit can be ascertained the trustee is made to yield it up. If,through the trustee's own act, it is completely incapable of ascertainment,even to the extent of a rational approximation, so that the choice liesbetween holding a trustee liable for nothing and holding him liable forall, the latter course must be chosen.(Footnote omitted.)[75] We consider that these principles were correctly applied by the MāoriAppellate Court, in particular at [33]–[34], [37]–[38] and [47].56 Contrary toMr Kahukiwa's submission, Mr Nicholls bore the onus to establish any expenses thatwere properly deductible from the rental and income he derived from the property.[76] Turning to Mr Kahukiwa's characterisation of the process of account, we donot consider that a defendant's obligation to account is illuminated by a description ofthe accounting process as being either inquisitorial or adversarial. An account ofprofits is a remedy consequential upon liability having been established in a variety ofcircumstances, for example breaches of fiduciary duties and of duties of confidenceand infringements of intellectual property rights as well as obligations amongco-owners of property. The remedy is interrogative in nature, reflecting the reality thatthe information relating to income and profit will usually be in the defendant's ownhands. As Mitchell McInnes observes, the process of account, like the process oftracing, is neither a cause of action nor a remedy, but rather a preliminary exercise by56 At [67] above.which means a claimant can establish an evidentiary basis for the imposition of someform of liability on a defendant.57 In some instances the process may appearinquisitorial where, as in the present case,58 the Court makes orders for the provisionof information by third parties.[77] The references in s 27 of the Statute of Anne to auditing and auditors can bediscerned today in pt 16 of the High Court Rules 2016 relating to accounts andinquiries. An accounting party is defined to mean the party required by an order forthe taking of an account to account to the other party.59 There is provision for the courtto appoint an account-taker for the purposes of taking an account who may be theRegistrar and/or an accountant.60 However not infrequently the court will itselfsupervise the process, as illustrated in the account of profits in relation tothe publication of the book Soldier Five.61[78] In our view the approach adopted in this case was entirely orthodox. The onlyunusual feature is the lengths to which the Māori Land Court was required to go inorder to conduct the account. The criticism levelled on the basis that the approach wasadversarial rather than inquisitorial is misconceived.Was the process unfair to Mr Nicholls?[79] In order to evaluate the complaint that the process was unfair to Mr Nicholls itis instructive to trace the history of requests made in the course of this litigation forthe provision of relevant information.[80] At the conclusion of the judgment of 21 December 2012 granting an injunctionJudge Coxhead made the following direction concerning the recovery of rental andmesne profits:6257 Mitchell McInnes "Account of Profits for Common Law Wrongs" in Simone Degeling andJames Edelman (eds) Equity in Commercial Law (Lawbook Co, Sydney, 2005) 405 at 407–408.58 Judge Coxhead's order of 9 June 2014 at [15] above.59 High Court Rules 2016, r 16.1.60 Rule 16.6.61 Her Majesty's Attorney-General for England and Wales v R HC Auckland CIV-1998-404-343,5 August 2005; and Attorney-General for England and Wales v R [2007] 2 NZLR 347 (CA).62 Nicholls v Nicholls, above n 6. See at [11] above.54. With regard to the orders sought for recovery of rental income that therespondents have received and mesne profits the Court is hindered incoming to a view due to the lack of information it currently has.I therefore direct that the respondents are to provide documentation sothat the Court can ascertain what rental has in fact been received bythe respondents from the caravan owners; what number of sites havein fact been occupied; what income has been received for the flats,cabins and tent sites; and what arrangements the respondents havemade for payment of tax obligations [if] any. This is to be providedwithin 30 days.[81] The appeal to the Māori Appellate Court was part-heard on 29 and 30 July2013 for the reason that the Court granted Mr Nicholls leave to adduce additionalevidence. In a direction of 1 August 2013 the Court said:63[9] We also consider it would assist the Court to reachan understanding of the context in which Judge Coxhead heard the matter witha degree of urgency in December 2012 if the appellant is given an opportunityto provide evidence that addresses what he has done in response to theundertakings given before Judge Clark in 2009 and what has happened withthe income that he and his brother and extended whānau have received fromthe campground operation since they assumed effective control severalyears ago.(Footnote omitted.)The hearing resumed on 10 September 2013.[82] The reasons for judgment recorded that no information was provided byMr Nicholls as to the income which he, his brother and extended whānau had beenreceiving from the campground operation.64 After referring to [54] ofJudge Coxhead's decision the Māori Appellate Court stated:[115] It is noteworthy that Mr Nicholls did not comply with that directionand neither, when given the opportunity to do so, did he provide this Courtwith information concerning what has happened to the income that he and hisbrother and extended whānau had received from the campground operationsince they assumed effective control several years ago. When cross-examinedon this matter Mr Nicholls was evasive.(Footnote omitted.)[83] On 1 November 2013 Judge Coxhead convened a telephone conference toascertain progress in compliance with his earlier directions. He granted Mr Nicholls63 Nicholls v Nicholls [2013] Māori Appellate Court MB 281 (2013 APPEAL 281).64 Nicholls v Nicholls – Papaaroha 6B, above n 3, at [98].and the other respondents 30 days within which to provide the documentationpreviously requested.65 The response of Mr Nicholls of 3 December 2013 wasdescribed by Judge Coxhead in his judgment of 9 June 2014 in this way:66[6] On 3 December 2013 counsel for Mr George Nicholls, fileda memorandum and affidavit with an annexure. The information provided tothe Court consisted of a one page spreadsheet with handwritten figures besideeach category of expenditure. Unsubstantiated figures were provided for totalincome received from caravans, cabins and the campground and expenditurefor the 2010 – 2011, 2011 – 2012 and 2012 – 2013 years.[84] The Trustees then filed a memorandum dated 5 December 2013 requesting thatthe Court of its own initiative make orders requiring production of information.That led to Judge Coxhead making the orders on 9 June 2014.67[85] On 16 December 2013 Mr Kahukiwa filed a memorandum opposingthe Trustees' request and reiterating the submission previously made that theMāori Land Court lacked jurisdiction to compel Mr Nicholls to deliver up documents.The Trustees' request was opposed on the further ground that the receipt of rentalinformation filed on behalf of Mr Nicholls on 3 December 2013 was a satisfactoryresponse to the Court's request for information.[86] The Trustees acknowledge that during the period that followed fromapproximately January 2014 to March 2017 Mr Nicholls chose not to be represented.However they submit that he actively engaged with the Māori Land Court and at alltimes was aware of his right to be represented by counsel.[87] In response to Judge Coxhead's order of 9 June 2014, on 4 July 2014Hauraki Taxation Service Ltd advised the Court it held no working papers and that allpapers had been returned to Mr Nicholls, as requested, in about October 2013.[88] Consequently the Court then sent to Mr Nicholls a direction that all thedocumentation which he had produced to Hauraki Taxation Service Ltd was to be filedwith the Court by 22 August 2014. Mr Nicholls responded in an email of 21 August65 Nicholls v Nicholls – W T Nicholls Trust (2013) 67 Waikato Maniapoto MB 170 (67 WMN 170).66 Nicholls v Nicholls – W T Nicholls Trust, above n 10.67 See at [15] above.2014 in which he appeared to suggest that boxes of his belongings which had beenstored with various members of his whānau had suffered water damage orrat infestation.[89] Judge Coxhead convened a further telephone conference on 22 December 2014in which Mr Nicholls did not participate. However the Court sent the minutes of theconference to Mr Nicholls and requested his views on the steps which the Courtcontemplated as follows:681 The Court making a discovery order for the George Nicholls[Whānau] Trust who the Court has been advised had a bank accountwith Kiwibank and funds were deposited with that account relevantto the period that Goerge Nicholls acted as the Manager of the OamaruCamping ground.2 The Court seeking a report from a forensic accountant to review thedocumentation provided by way of discovery and provide a report tothe parties and the court about how the funds have been received,applied or misapplied by Mr George Nicholls (and others associatedwith Mr George Nicholls) during the period that he was acting asManager for the camping ground.3 The costs of the report being paid for through the [Māori] Land CourtSpecial Aid Fund.Mr Nicholls responded in an email of 9 February 2015.[90] After making inquiry of two accountant firms in Hamilton as to the costs ofproviding the proposed report, the Māori Land Court made the appointment ofJeffries Nock and Associates Ltd in July 2015. After the accountants' report wasdistributed, on 9 May 2016 the Court issued a direction that all parties had one monthto consider the report. On 30 May 2016 Mr Nicholls sent an email to the Court,commenting on various aspects of the report. A further telephone conference wasconvened on 23 June 2016 in which Mr Nicholls participated.[91] On 12 December 2016 the Court issued a direction that the Trustees had until10 February 2017 to supply additional information which they considered wasrequired before the Court could make orders regarding the recovery of rental income68 Nicholls v Nicholls (2014) 91 Waikato Maniapoto MB 139 (91 WMN 139).and the mesne profits which they sought. On 16 February 2017 the Trustees fileda detailed memorandum together with the Deane and Co Ltd report.69[92] At this juncture Mr Nicholls re-engaged counsel. Mr Kahukiwa filed a detailedmemorandum dated 24 March 2017 which reiterated the view that the claim forrecovery of rental income was misconceived because the Court had no jurisdiction todetermine the matter. A memorandum in reply was filed by the Trustees dated 10 April2017. The Māori Land Court judgment was issued on 21 December 2017.[93] From our review of the lengthy process which culminated in the Māori LandCourt judgment it is apparent that Mr Nicholls was afforded ample opportunity torespond to the Court's very clear directions and requests for information. The onlyresponse of any consequence was the one page spreadsheet with handwritten figuresdescribed by Judge Coxhead.70 We note that by far the largest of the unsubstantiatedfigures of expenditure to which the Judge referred was described as "Other", totallingin excess of $75,000.00 for the three year period addressed.[94] In addition Mr Wackrow drew attention to Mr Nicholls' response of30 May 2016 to the report of Jeffries Nock and Associates. He observed, and weagree, that that response did not take the matter any further by way of disclosure fromMr Nicholls or provide any other evidence or information relating to steps taken byhim.[95] We do not consider that there is any basis for a complaint of unfairnessconcerning the process which was followed. If Mr Nicholls is aggrieved at theoutcome, in our view that cannot be as a result of the process itself but rather becauseof his reluctance to properly engage with it. The observations of Tipping andBlanchard JJ in Chirnside v Fay appear apt:71It was not the purpose of the surrogate accounting exercise upon whichthe Court was engaged to apply a sanction or punishment for the breach ofduty. The true purpose of the exercise was to fix compensation or damageson the basis of disgorgement of profits properly analysed. While a refusal tomake an allowance or its lack of liberality, if that course is appropriate, could69 At [17] above.70 At [83] above.71 Chirnside v Fay, above n 54, at [142].be seen as having penal effect, the reason for such an outcome is simply thatthe errant fiduciary will have failed to satisfy the Court of the justice of makingany or a more liberal allowance. That this might be seen, at least bythe fiduciary, as penal is understandable but it is important there be noconfusion between effect and purpose.Did the Trustees have a right of election in respect of the mode of assessment ofdamages in liability order 2?[96] It will be recalled that the Māori Land Court had before it reports from JefferiesNock and Associates and Deane and Co Ltd. The former presented an analysis of thetrading activity of the business known as Oamaru Bay Holiday Park to the extent thatsuch could ascertained from bank statements provided by the Māori Land Court.The report concluded that for a period of seven years from 2009 to 2015 income of$834,000 (GST exclusive) could be ascertained from the bank statements provided.72That amount was apportioned by the Trustees as to $442,593.00 for the period prior tothe constitution of the Trust and $391,824.00 for the subsequent period.[97] The mesne profits valuation assessment of Deane and Co Ltd calculated whatwas described as the "total mesne profit loss" for the period 15 August 2011 to14 January 2014 of $394,216.00.73[98] As earlier noted Judge Coxhead declined to order an award of mesne profitsbecause he considered, correctly, that to do so would amount to a double recovery.74However the Māori Appellate Court concluded that the Māori Land Court erred ingranting liability order 2 because it amounted to a requirement that Mr Nichollsaccount to the Trustees as if he owed a duty to account for revenue.The Māori Appellate Court explained:75[46] The Judge ought to have calculated the amount that the appellantowed the trustees as mesne profit based on his trespass. The award of mesneprofit, based on the Deane report, would have been higher than the existingorder to account for revenue. So, although the Judge's approach wastechnically in error, we decline to make a higher award because the differentis negligible.72 At [16] above.73 At [17] above.74 At [23] above. See Māori Land Court judgment, above n 1, at [61].75 Māori Appellate Court judgment, above n 2.[99] In a memorandum to this Court seeking leave to file a notice of appearancethe respondents explained their position as follows:13. the respondents support the resultant finding of the MāoriAppellate Court that the post-trust award against the appellant beupheld. However, the respondents do not support the reasoning of theAppellate Court that the Judge in the lower Court erred in making anaward on the basis of an account to co-owners. The respondentssubmit both an account and mesne profit approach to damages wereavailable to the respondents and as such either approach should beupheld, and we submit it is the claimants choice as to which measure.(Footnote omitted.)[100] The Trust's claim in respect of the period following the constitution of the Trustwas in trespass. As stated in Todd on Torts:76Where the defendant wrongfully makes use of the plaintiff's land,the plaintiff is entitled to recover by way of damages (generally called"mesne profits") a reasonable rate of remuneration for the full period ofunlawful use, regardless of any actual loss suffered by the plaintiff or anyactual benefit derived by the trespasser. This strict "user principle" isjustified by the need to remove any financial incentive to interfere with thepossessory rights of others.(Footnotes omitted.)Hence the Trust was entitled to an award of damages calculated on a mesneprofits basis.77[101] However a person entitled to possession of land can also formulate a claim byreference to the value of the benefit which an occupier has received. As Hoffmann LJexplained in Ministry of Defence v Ashman:7876 Stephen Todd (ed) Todd on Torts (8th ed, Thomson Reuters, Wellington, 2019) at 520. The samepassage from the seventh edition was quoted at [43] of the Māori Appellate Court judgment,above n 2.77 The meaning of "mesne profits" is explained in Daniel Greenberg (ed) Jowitt's Dictionary ofEnglish Law (5th ed, Sweet & Maxwell, London, 2019) vol 2 at 1596: "Profits derived from landwhilst the possession of it has been improperly withheld: that is, the yearly value of the premises.Mesne profits are the rents and profits which a trespasser has, or might have, received or madeduring his occupation of the premises, and which therefore he must pay over to the true owner ascompensation for the tort which he has committed. A claim for rent is therefore liquidated, whilea claim for mesne profits is unliquidated".78 Ministry of Defence v Ashman [1993] 2 EGLR 102 (CA) at 105.A person entitled to possession of land can make a claim against a personwho has been in occupation without his consent on two alternative bases.The first is for the loss which he has suffered in consequence ofthe defendant's trespass. This is the normal measure of damages in the lawof tort. The second is the value of the benefit which the occupier hasreceived. This is a claim for restitution. The two bases of claim are mutuallyexclusive and the plaintiff must elect before judgment which of them hewishes to pursue.That analysis was endorsed by Barker J in Roberts v Rodney District Council.79[102] The statement by the Māori Appellate Court at [46] is ambiguous. It can beviewed, in the way the respondents have read it, as suggesting that the only method ofcalculation of damages for trespass is on a mesne profits basis. If that was the intendedmeaning of the paragraph then we would agree with the respondents that it was inerror.[103] However the paragraph follows a discussion which first acknowledges the totalmesne profit figure calculated by Deane and Co Ltd of $394,216.00 and then recordsthe fact that the Judge proceeded to order Mr Nicholls to account to the Trustees inthe lesser sum of $391,824.00, being the revenue received subsequent tothe constitution of the Trust. We consider that it is possible that the Māori AppellateCourt was intending to say no more than that, since the Trust would have had a rightof election, liability order 2 should have been for the larger sum.[104] For the avoidance of doubt we record that we agree with the tenor ofthe respondents' submission in their memorandum that damages for trespass may beassessed either on a mesne profit basis or by reference to the loss suffered asa consequence of the trespass. The person entitled to possession of the land hasan election as to which measure to adopt, which must be exercised before judgment.79 Roberts v Rodney District Council [2001] 2 NZLR 402 (HC) at [15]–[16].Result[105] The appeal is dismissed.[106] The appellant is in receipt of legal aid. There is no order for costs.Solicitors:Corban Revell, Auckland for AppellantWackrow Williams & Davies, Auckland for Respondents