BAYLY V HICKS AND ANOR COA CA574/2011

BAYLY V HICKS AND ANOR COA CA574/2011 [14 December 2012]IN THE COURT OF APPEAL OF NEW ZEALANDCA574/2011[2012] NZCA 589BETWEEN JOCELYN BAYLYAppellantAND MARION HICKS AND JOHN HICKSRespondentsHearing: 14 November 2012Court: Ellen France, Stevens and Asher JJCounsel: W G C Templeton and R Kaur for AppellantK T Glover for RespondentsJudgment: 14 December 2012 at 2.30 pmJUDGMENT OF THE COURTA The appeal is dismissed.B The appellant is to pay the respondents costs for a standard appeal on aBand A basis together with usual disbursements.____________________________________________________________________REASONS OF THE COURT(Given by Asher J)Table of ContentsPara NoIntroduction [1]The lead-up to the hearing [7]The High Court decision [11]The appeal [14]The pleadings [17]Was there jurisdiction for the Judge to advance thealternative proposal? [22]The process followed [34]Result [47]Introduction[1] This is an appeal against an interim decision relating to the division of aproperty known as "Paihia". Paihia is a 516 hectare farm property on the coast nearKerikeri in the Bay of Islands. It bounds Onewhero Bay in the east and a number ofsmaller bays to the north. It is owned as to an undivided one-half share byJocelyn Bayly, and as to the other one-half share by Mrs Bayly's sister,Marion Hicks and her husband John as trustees of a family trust. The property is intwo titles, but it is common ground that the historical boundary between the two lotsdoes not constitute a fair basis for any division between them.[2] Paihia is in its position and layout a unique property. It is locatedapproximately five kilometres north of the Waitangi and Paihia townships and10 kilometres east of Kerikeri. Road access to the farm is via Kerikeri, but there isno direct road access to any of the beaches. The beach at Onewhero Bay isapproximately 1.4 kilometres long featuring reddish-gold sand with areas of flatfarmland, native woodland, wetland and rolling farmland behind it. The higher landoffers panoramic and uninterrupted views over the beach and the Bay of Islands.There is an area in which dotterels nest. The condition of the beach is pristine.It constitutes an excellent swimming and recreational facility and at the moment thepublic only have access to it by sea. The Judge, who carried out a site visit,described it as a superb beach and one of the finest in the Bay of Islands. It iscommon ground that in the area behind the beach there are, subject to approvalsunder the Resource Management Act 1991, prime development sites.[3] The land to the north comprises a headland. This is relatively gentle country, but as it comes to the sea it slopes steeply downwards to the coast. The headland is intersected by a number of gullies and ridges. The north also has magnificent viewsover the Kerikeri inlet and the east has views out over the Bay of Islands. Thesecluded and intimate beaches around the headland can be accessed by walking tracks down through bush clad gullies. While these are attractive small beaches,Onewhero Bay is the dominant feature of the property. Mrs Bayly and her husband,through their farming company, graze cattle and sheep on the property. It is fencedand well farmed. There are no stock handling facilities.[4] Mrs Bayly sought an order of the High Court dividing the jointly ownedproperty under ss 339–343 of the Property Law Act 2007 ("the Act"). Mr andMrs Hicks counterclaimed seeking a sale, which they modified at the hearing to aclaim for a division under the Act based on a different boundary. On 19 August 2011Wylie J declined to direct a division of Paihia as proposed by either Mrs Bayly'svaluer or the Hicks' valuers. In an interim judgment he proposed a division of Paihiainto three lots whereby Lots 1 and 3 would vest in Mrs Bayly and Lot 2 would vestin Mr and Mrs Hicks ("the alternative proposal"). This was different from the twoproposals put to him by the parties. He gave directions for further reports, evidence,submissions and a hearing whereby a proposal of a three-lot subdivision could beconsidered and determined.[5] Mrs Bayly appeals against this interim judgment. She seeks an order that the alternative proposal and directions were made "without jurisdiction" or were"inappropriate". In the notice of appeal and submissions filed Mrs Bayly alsoappealed against the Judge's decision not to make orders in accordance with herdivision proposal. However, that ground of appeal was abandoned at the outset ofthe oral argument.[6] Mr and Mrs Hicks have not appealed against the decision not to divide theproperty in accordance with their proposal nor the Judge's directions as to a wayforward. They support the High Court decision, even though it involved therejection of their expert's proposal. They say the Judge's interim decision is a "fairmeans of resolving a dispute which has lasted over 25 years".The lead-up to the hearing[7] Wylie J has set out the background in full in his interim judgment.1[8] The Bayly family had farmed in the Kerikeri area for many years and acquired ownership of Paihia in the 1960s. Mrs Bayly and Mrs Hicks' late father,Mr Bayly, had also owned a property adjacent to Paihia known as "Wairoa".[9] When their father died in December 1985, Paihia was left on trust for Mrs Bayly and Mrs Hicks. In 2005 pursuant to a family arrangement Paihia wastransferred by way of distribution to Mrs Bayly personally as to an undividedone-half share, and as to Mrs Hicks and her husband John as trustees of their familytrust as to the other undivided one-half share.[10] By this time Mrs Bayly and Mrs Hicks were unfortunately estranged. Paihia had been leased in 2005 on fixed terms to a farming company controlled byMrs Bayly and her family interests. Both the Bayly and Hicks families used adwelling at each end of the bay. Mrs Bayly and her husband have through theirfamily company farmed Paihia as well as the Wairoa farm. Mr and Mrs Hicks live inAuckland and do not farm at Paihia, but have a deep affection for it. They and theirchildren use the small bach north of Onewhero Bay. Discussions between the partiesas to a possible division of Paihia came to nothing. Proceedings were issued byMrs Bayly for the division of Paihia in August 2009. The Hicks responded by filinga statement of defence and counterclaim in which they sought a sale of the propertyand such further orders as might be required.The High Court decision[11] Wylie J considered the relevant considerations dictated by s 342 of the Actand found that unless he made an order, the stalemate between Mrs Bayly andMr and Mrs Hicks would continue and cause friction and antagonism. The presentco-ownership arrangements were unsatisfactory and any renegotiation of the presentarrangement would prove difficult. The deadlock precluded both sisters from1 Bayly v Hicks HC Whangarei CIV-2009-488-547, 19 August 2011 at [2]–[16].maximising their interests in Paihia, and from using or developing the property asthey saw fit.2 Looking at hardship "in the round" he considered that the hardshipthat would be caused to either Mrs Bayly or the Hicks if he refused to make an orderwould be "largely the same".3[12] The Judge rejected a submission that Mrs Bayly had contributed significantly more to the property than Mr and Mrs Hicks. Contributions made towardsdevelopment and maintenance of a property by her and her husband had been morethan outweighed by the benefits they had received. He considered the application ofResource Management Act, rates issues and the presence of dotterels. He analysedthe valuation evidence for each party in detail and was unable to accept any of thedivision proposals. The Judge rejected the two-lot proposals of both parties.The difference between these proposals was the position of the dividing line.He observed:4In my judgement, the land breaks down into three main areas. First, there is Onewhero Bay, the development land on the low ridge immediately to the landward side of the bay, and then the land on the higher ridge to the west of the wetlands. Secondly, there is the productive farming land to the west and southwest of the high ridge. Finally, there is the northern headland, which presents considerable development potential.[13] He concluded that the values attaching to Paihia could be more fairly andreasonably apportioned if a three-lot subdivision was undertaken.5 He made ordersto progress such a concept.The appeal[14] Mr Templeton for Mrs Bayly submitted that the jurisdiction to make ordersdividing jointly owned land could only be triggered on an "application made". Oncethat application was declined the High Court had no jurisdiction to determine anydivision different to that proposed by the parties.2 At [63].3 At [62].4 At [52] (citations omitted).5 At [103].[15] It was submitted that this limitation is implicit in the Law Commission report that led to the new Act.6 Reference was made to the pleadings, in particular theappellant's statement of defence to the respondents' counterclaim, which referred tothe division of the land into two areas of approximately equal value. Mr Templetonrelied on s 340 of the Act and the prohibition on a Court making an ordersubdividing land contrary to s 11 or Part 10 of the Resource Management Act.He submitted that the further powers of the court under s 343 of the Act were limitedand noted the fact that a resource consent to a two-lot subdivision as proposed byMrs Bayly was obtained on 27 May 2011, just a few months before the trial.He submitted that there were particular legal difficulties inherent in the three-lotsubdivision concept. There could be significant problems in getting the necessaryconsents, and the Council would want an expanded reserve. He claimed that theJudge failed to consider adequately the effect on Mrs Bayly of his new proposal, andshe has been forced into a process she did not seek.[16] Mr Templeton accepted in argument that there could be some variation by theCourt from the orders sought by the parties. It was a matter of degree. Thealternative proposal in the interim judgment involved a new concept of division andhe submitted that this went too far.The pleadings[17] The issue arises of whether the Judge was acting within the scope of thepleadings. Mrs Bayly's statement of claim was not limited to seeking relief by anorder dividing the land in accordance with the valuer's proposal. That prayer forrelief sought an order for partition of the land known as Paihia "... upon such termsas the Court may deem fit". The pleading had in earlier paragraphs asserted that inall the circumstances "... it is appropriate that an order be made pursuant to ss 339–343 of the Property Law Act 2007 for partition of Paihia between the plaintiff anddefendants". Thus, Mrs Bayly's statement of claim did not of itself seek approval ofany particular proposal, and on its face left it to the Court to determine anappropriate division.6 Law Commission A New Property Law Act (NZLC R29, 1994).[18] The statement of defence to the counterclaim sought an order for sale andsuch further or other orders under ss 339–343 as might be required. The reply to thecounterclaim sought no relief. Mr Glover for Mr and Mrs Hicks informed us thatprior to the hearing in the High Court his clients had decided not to seek a sale but toseek a specific partition order in terms of their valuation evidence. They did notconsider it necessary to amend the pleadings given the breadth of the plaintiff'spleading, which covered any proposal.[19] When taxed with the width of the relief sought in the statement of claimMr Templeton responded that it must be read with the affidavits filed in support,which included the affidavit of a valuer, Alistair Nicholls, in which a specific two-lotsubdivision was put forward as a fair division of the land. However, that affidavitcannot be read as limiting the open ended relief sought. That expert evidence wasadduced in support of the request for appropriate relief, and can be seen as puttingforward a particular proposal favoured by the appellant, for the Court to consider.[20] In fact the Judge did exactly what the appellant asked the Court to do in herstatement of claim. He considered the evidence and submissions and sought todetermine the appropriate relief. He was unable to adopt either the appellant'sproposal or the respondent's proposal as neither would provide a just solution. Hisrejection of the valuers' proposals did not mean in terms of the pleadings that theapplication as set out in the statement of claim had to be declined with theproceedings coming to an end. It just meant that the options for division put forwardby the plaintiff and defendants were not accepted and, as the prayer for relief asked,the Judge proceeded to consider as best he could what relief was appropriate.[21] We note that it would have been open to either party with leave of the Courtto have amended the relief they were specifically seeking during the course of thehearing in any event. Although this did not happen during the hearing, it is what haseffectively happened following the Judge's decision; the Hicks are now supportingthe Judge's proposal. That proposal can be regarded now as relief sought by theHicks. These sorts of changes in position, by parties to a division problem of thiscomplexity, are understandable in applications brought under s 339 of the Act.Was there jurisdiction for the Judge to advance the alternative proposal?[22] Mr Templeton argued that the Judge exceeded his jurisdiction and did not have legal power to make the interim order and directions promoting a three-lot subdivision under the relevant sections of the Act.[23] Up to the time when the Property Law Act 2007 was passed, the court'sjurisdiction to make orders in respect of land where joint owners were deadlocked was limited to the jurisdiction to partition given in the Partition Acts 1539 and 1540 and the discretion given by s 140 of the Property Law Act 1952 to order sale of the land instead of partition.7 The Court could not order a co-owner to buy out the share of another co-owner, or order a co-owner to sell to another co-owner.8[24] The Partition Acts and s 140 are now replaced by ss 339–343 of the Act. Section 339(1) provides:339 Court may order division of property(1) A court may make, in respect of property owned by co-owners, an order—(a) for the sale of the property and the division of the proceeds among the co-owners; or(b) for the division of the property in kind among the co-owners; or(c) requiring 1 or more co-owners to purchase the share in the property of 1 or more other co-owners at a fair and reasonable price.Section 339(1)(c) fills the previous gap by giving the court jurisdiction to order one co-owner to purchase the share of another co-owner at a fair and reasonable price.[25] As the commentaries observe, much of the case law prior to 2007 focusing asit did on the limited choices available to the court, will now be rendered otiose by thenew discretion clearly given by s 339.9 The previous division between the Partition7 Compare: Partition Act 1539 (Imp) 31 Hen 8 c 1; Partition Act 1540 (Imp) 32 Hen 8 c 32;Property Law Act 1952, ss 140–143. The Partition Acts were repealed by s 365(2) of theProperty Law Act 2007.8 See Fleming v Hargraves [1976] 1 NZLR 123 (CA) at 127.9 George Hinde and others Hinde McMorland & Sim Land Law in New Zealand (looseleaf ed,LexisNexis) at [13.020] and [13.021]; Tom Bennion and others New Zealand Land Law (2nd ed,Brookers, Wellington, 2009) at [6.7.05]; and Land Law (looseleaf ed, Brookers) at [5.7.04(1)].Acts, which dealt with division between co-owners and the Property Law Act 1952, which related to sales to third parties, has gone. So has the rigid requirement of the past that the court must make orders if the criteria set out in the Acts were proved. This has been replaced by a broad discretion, where the relevant considerations areset out in s 342. The discretionary factors include "any other matters the courtconsiders relevant."10 Section 342 provides:342 Relevant considerationsA court considering whether to make an order under section 339(1) (and any related order under section 339(4)) must have regard to the following:(a) the extent of the share in the property of any co-owner by whom, or in respect of whose estate or interest, the application for the order is made:(b) the nature and location of the property:(c) the number of other co-owners and the extent of their shares:(d) the hardship that would be caused to the applicant by the refusal of the order, in comparison with the hardship that would be caused to any other person by the making of the order:(e) the value of any contribution made by any co-owner to the cost of improvements to, or the maintenance of, the property:(f) any other matters the court considers relevant.[26] It seems unlikely that such a broad list of discretionary powers as expressed in s 339(1) could carry the implicit limitation that such powers could only be exercised on the express request of one particular party. Indeed, Mr Templetonaccepted that if so driven by one of the factors in s 342, particularly hardship, thecourt could make an order for sale although the parties had sought division. So toothe court's power to make further orders is broadly expressed. There is a wide rangeof discretionary powers in s 343. Section 343(g) at the end of the list of orders thatcan be made provides that a further order can be made that:(g) provides for, or requires, any other matters or steps the court considers necessary or desirable as a consequence of the making of the order under section 339(1).[27] We see nothing in the words of these sections to indicate that the powers of the court are only to make an order for division along the lines of that sought by a10 Property Law Act 2007, s 342(f).party to the proceedings. The narrow jurisdiction of the past, split as it was betweenthe Partition Acts and the 1952 Act is replaced by a broad discretion, limited bys 339(1), but beyond that turning on whatever factor appears to the court to berelevant when the broad range of factors in s 342 and the broad powers in s 343 areconsidered. There must be an application under s 339, and the boundaries of thediscretion are set out in s 339(1). However, there is no requirement that the ordersmade can only be those that were specifically sought by a party. Such a restrictionwould unduly cramp the scope and efficient operation of what is clearly remediallegislation.[28] Section 340 of the Act provides:340 Order under section 339(1)(b) subject to restrictions on subdivision of land(1) No order under section 339(1)(b) (and no related order under section 339(4)) may subdivide land contrary to section 11 or Part 10 of the Resource Management Act 1991.(2) A court that concludes that an order under section 339(1)(b) (or a related order under section 339(4)) would contravene subsection (1) may make an order of that kind that does not contravene that subsection, or may instead make an order under section 339(1)(a) or (c) (and any related order under section 339(4)).[29] A limitation of this nature is only to be expected; it would be surprising to saythe least if the court had the ability to ride roughshod over the procedures andsubstantive provisions of the Resource Management Act.[30] We do not see s 340 as requiring all Resource Management Act issues to beresolved before a hearing. Although in this case the appellant had obtained aresource consent for her proposed division, it can be readily seen that it will often bethe case that resource consents to the possible options before the court will not havebeen obtained at the time of hearing. This should not necessarily preclude a courtfrom making an interim order, setting out the court's interim view as to theappropriate division, giving the parties an opportunity to obtain the necessaryconsents or provide evidence as to whether such consents could be obtained. Itcould be very wasteful of costs for parties to be required to obtain consents to theirproposals before they go to court, when their proposal may in the end not be favoured.[31] The Law Commission report does not indicate, as Mr Templeton submitted,that the court should only make orders consistent with those sought by the parties.The statement he relied on read "[w]hile there is now a discretion, it is likely that thecourt will not ordinarily refuse to make an order upon an application of such a co-owner".11 This does not suggest that the discretion is closed or narrow. Indeed tothe contrary, it supports the view that the intention of the makers of the Act was tocreate a broad discretion. The present position is to be contrasted with that prior to2007 when there was in many cases under the old regime no discretion and thesummary judgment procedure was well-suited to deal with sale and partitionapplications. Now the summary judgment procedure is not so well-suited to s 339applications. The authors of Hinde McMorland & Sim Land Law in New Zealandcomment that:12... the Court is given a wide discretion in every case as to the order to be made and both parties may raise full and detailed arguments as to the matters bearing on the exercise of that discretion.[32] The feature of s 140(2) and (3) of the 1952 Act where there was reference tothe court making an order "on the request of any party interested ..." is not repeated.Under this new broad discretionary regime it is appropriate for a judge to stand backfrom the submissions and proposals of the parties, and consider what, on anoverview, taking into account the relevant considerations, is the most just andpractical way through the impasse before the court, even if the answer may notreflect the orders sought by the parties. By definition the cases that come before thecourt arise where parties are locked into an ownership position which they cannotresolve because of the positions they have taken, and where a way out may be by apath neither has to that point contemplated.[33] Therefore, we conclude that subject to the parameters of ss 339 and 343 thecourt is given a broad discretion and has jurisdiction to make orders and give11 Law Commission, above n 6, at [747].12 Hinde and others, above n 9, at [13.021(a)].directions different from those sought by the parties. The prayer for relief in the pleadings in fact reflects that discretion.The process followed[34] Of course any consideration on the part of a judge of orders that are differentfrom those actually sought and argued by the parties must be clearly notified to theparties and then, after they have had suitable time to prepare, they must be heard onthe new proposal. Mr Templeton did not argue that there had been a breach of therules of natural justice. Nevertheless, we consider whether the process adopted wasfair.[35] At the hearing the Judge put the concept of a three-lot subdivision to Mrs Bayly during her evidence. He asked where the right-of-way in a three-lot subdivision might go. She saw real problems with the concept. The Judge also asked Mrs Bayly's valuer, Mr Nicholls, whether he saw any merit in a three-lot subdivision. He considered such a division an option, but saw downsides. The Judge also asked a number of questions of the planning consultant employed by Mrs Bayly, Mr Kemp. Mr Kemp considered that there would be greater complications in dealing with a three or four-lot division rather than a two-lot division, but the land would still be assessed on the basis of a restricted discretionary activity.[36] In the same way the Judge asked Mrs Hicks what she thought of a three or four-lot subdivision. She responded by saying it could be fair, but had reservations about a subdivision of more than two lots and wanted an opportunity to discuss itwith her family and advisers. The issue was also raised when the Hicks' valuerMr Scholefield gave his evidence. The Judge's proposal was consistent with some ofthe evidence-in-chief by Mr Scholefield, in particular his reference to each party having a portion of the beachfront.[37] The Judge found Mr Nicholls' proposal to be neither fair nor reasonable to the parties. He found that the line proposed by the Hicks' valuer, Mr McBain, was slightly better than Mr Nicholls' proposal but also unsatisfactory. Like that ofMr Nicholls, it was not sufficiently sensitive to the diverse land areas which made up the property. Mr McBain had simply grafted a greater area onto Mr Nicholls'proposed partition line. The Judge appeared to have some sympathy for Mr Scholefield's approach but noted that Mr Scholefield did not in the end make any specific proposals and that there was nothing concrete to approve or disapprove.[38] So the Judge raised and tested the idea of a three-lot subdivision during the hearing. Then, in proposing this idea in his judgment, he asked for further affidavitsfrom the parties' planners. He made certain observations in his judgment about the nature of any right-of-way or public road that could be put in,13 and the need for access to the various beaches.14 The Judge stated that he would "propose" that Lots1 and 3 should vest in Mrs Bayly and Lot 2 in the Hicks.15 He observed that it seemed to him that a partition along those lines would be fair and reasonable as between the parties.16 However, he accepted that there were downsides which he set out, while observing that these were not necessarily fatal.17[39] In the result section of his judgment he recorded:[118] I am not prepared to direct a partition on the basis proposed by either Mr Nicholls or Mr McBain. Mr Scholefield's proposed partition line is toouncertain to either approve or disapprove.[119] I am prepared to consider a partition which broadly adopts the suggestions shown on annexure E. It is my preliminary view that a division along those lines is workable and that it would be fair and reasonable as between the parties.[120] It will be necessary for appropriate experts to prepare a modified subdivision plan incorporating, insofar as is practicable, the suggestions I have made which are illustrated on annexure E. To that end, an independent surveyor will need to be retained. So will a valuer. I am satisfied that I have the power to appoint an expert surveyor under r 9.36 of the High Court Rules noted previously. I can appoint a valuer under s 399(3).[121] The parties' views as to the appointment of the appropriate expertsare sought.13 At [110].14 At [111].15 At [113].16 At [114].17 At [115] and [116].[122] Once the independent experts are agreed or appointed, it will be necessary for me to issue a minute giving the experts the necessaryinstructions. I would appreciate the parties' views on this matter as well.[123] When the Court-appointed experts have reported to the Court, their reports will be made available to the parties. I will then direct the Registrar to reconvene the hearing to give the parties the opportunity to call evidence in relation to, and to comment on, those reports. They will also be able to address any issues arising out of them. No final decision on the appropriate division will be made until that process is completed.[40] The Judge went on to say that the owners of another neighbouring propertyshould be served. He directed that the parties were to file and serve within30 working days of the date of his judgment memoranda setting out their respectiveviews in relation to the partition lines suggested by him, and for them to suggest howmatters should proceed.[41] We accept that a judge should not lightly come up with a different proposal tothat of the parties. Any alternative must be triggered by a relevant consideration.If an alternative is contemplated, the judge should explore that alternative possibilitywith the parties before a decision is made to put them to the time and cost of moreevidence and submissions. This is what Wylie J did during the hearing. No finaldecision should be reached until the parties have had a full opportunity to test theproposal and offer evidence and submissions. The judgment read as a whole reflectsthis, and does not indicate that the Judge has reached any final view on a three-lotsubdivision.[42] Indeed, to the contrary he has been at pains to test the alternative with the relevant witnesses and then to express himself in tentative terms in his judgment. The reference is to his "proposal" and the judgment is expressed to be "interim".The requirements for a surveyor and a valuer to be appointed, following the views ofthe parties being obtained, and for the experts to prepare a modified subdivision planincorporating the Judge's suggestions indicate no more than a stage in a process.The judgment records that once the Court appointed experts have reported to theCourt the reports will be made available to the parties and the Registrar and then thehearing will be reconvened. The parties will be given an opportunity to callevidence in relation to the reports and comment on those reports and any issuesarising out of them. The interim judgment specifically states "No final decision onthe appropriate division will be made until that process is completed."18 The parties are also invited to file and serve memoranda setting out their views in relation to the partition lines suggested by the Judge and how matters should proceed within 30 working days from the date of the judgment. If either party has any proper concerns about process, they can be raised in this context.[43] All this language indicates that no final decision has been made by the Judge.He has seen the prospect of a different and better way, in his view, to do justicebetween the parties and is in effect putting the proposal out there for reports fromindependent experts and ultimately for further submissions from the parties. Onlywhen all that material is to hand will he make a final decision. It is entirely possiblethat the concept he has in mind may prove impracticable or unfair. We have nodoubt that if he formed the view that this was the case that he would not direct athree-lot subdivision.[44] It is to be expected that in the course of a hearing new perspectives will arise.Parties may wish to change what they have been seeking. The Judge, as in this case,may consider that there may be a better way. The parties always have the option ofjointly discontinuing the proceeding. However, that is not an option for one partyonly, when the other party is still seeking relief.[45] We further accept that it might be imprudent for a judge to proceed with thatjudge's own proposition in the face of implacable opposition from both parties.There would be no jurisdictional bar, but a judge would naturally be cautious aboutimposing her or his will in such a situation, particularly when a good deal of furtheraction is required in relation to obtaining relevant consents. The Judge had anindication during the hearing from the Hicks that a three-lot subdivision could befair, and indeed they support the judgment. The position now has similarities to thatof a party coming up with a different proposal during the course of the hearing.[46] Ultimately, the Judge must continue to act in accordance with the principlesof natural justice and fairness, and in accordance with the provisions of the Act. Wehave no doubt, given the way Wylie J has approached the matter to date, that it is his18 At [123].intention to do so. We see nothing wrong in the approach of the Judge and indeed we consider it entirely appropriate in certain cases for a judge to be pro-active in this way. In the present circumstances, the adoption of a staged approach to reach a just result is in our view fair.Result[47] The appeal is dismissed.[48] Costs should follow the event. The appellant will pay the costs of therespondents for a standard appeal on a Band A basis together with usualdisbursements.Solicitors:Stafford Klaasen, Auckland for AppellantPaul Gallagher Legal, Auckland for Respondents