PAKI & ORS V THE ATTORNEY-GENERAL HC HAM CIV 2004-419-17

PAKI & ORS V THE ATTORNEY-GENERAL HC HAM CIV 2004-419-17 1 February 2007IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY CIV 2004-419-17BETWEEN JOHN HANITA PAKI, TORIWAI ROTARANGI, TAUHOPA TE WANO HEPI, MATIU MAMAE PITIROI AND GEORGE MONGAMONGA RAWHITI AS TRUSTEES OF THE POUAKANI CLAIMS TRUST Plaintiffs AND THE ATTORNEY-GENERAL OF NEW ZEALAND Defendant Hearing: 4 October 2006 and 31 January 2007 Counsel: I Millard QC and M Armstrong for plaintiffs A Beck and D Ward for defendant Judgment: 1 February 2007 at 14:15INTERIM JUDGMENT OF ASSOCIATE JUDGE FAIRE [on applications that amended statement of claim be served and that a more explicit statement of claim be filed]Solicitors: Rangitauira & Co, PO Box 1693, Rotorua for plaintiffs Crown Law Office, PO Box 2858, Wellington for defendantThe applications[1] There are two applications filed by the defendant which require determination. The first seeks an order that the amended statement of claim, dated 5 September 2005, be served on twenty-two individuals or groups. The second seeks an order requiring the plaintiffs to file and serve a more explicit statement of claim covering five specific aspects. [2] Both applications will be analysed separately. It is helpful to outline the background of the proceeding before dealing specifically with each application.Background[3] The plaintiffs claim, by virtue of a deed of mandate dated 3 October 1997, a deed of settlement with the Crown dated 19 November 1999 and the provisions of the Pouakani Claims Settlement Act 2000 to be the surviving mandated representatives of the Pouakani people. [4] They seek, as their principal relief, declarations:That the Crown holds the river bed of the Waikato River to ad median filum downstream Atiamuri to the Waipapa River and/or such parts as it presently owns as constructive trustee for the Pouakani people That the Pouakani people are entitled to the rights to use, benefit from the bed of the Waikato River from downstream Atiamuri to the Waipapa River to the ad medium filum.[5] The Crown acquired land adjacent to the Waikato River from the plaintiffs' predecessors. The Crown asserts ownership of the bed of the Waikato River, that being derived in one or two ways. [6] The first way is alleged to be by statute. The only directly relevant statutory provision is s 14 of the Coal-Mines Act Amendment Act 1903. That applies to the river at those places where the river is navigable. Whether or not the river is navigable is a matter of fact which will have to be established at the hearing. The plaintiffs assert that the parts of the river which are the subject of their claim are notnavigable. They accept that if the river is navigable at the parts they are claiming then their claim must necessarily fail on the grounds pleaded in this proceeding. [7] The second way is based on the principle of ad medium filum. Mr Millard referred to the description in Butterworths New Zealand Law Dictionary of the principle:ad medium filum acquae (Latin, to the middle line of the water). This expresses the common law rule that, where a non-tidal river is the boundary of the land conveyed, it is presumed that the grantee of the land takes the bed of the river to the middle line.[8] The plaintiffs claim that the Waikato River is not navigable by the time it gets to the Pouakani lands. If that claim is factually found to be correct then the basis for the Crown claim to the river bed, having regard to the current pleadings, is the ad medium filum principle. [9] The plaintiffs claim that when the original owners had their interests in the Pouakani lands recognised, as a result of Native Land Court procedures, they subsequently lost the land to the Crown by way of sale or other transaction with the Crown. What they did not know, they claim, is that they were losing, at the same time, their interest in that part of the Waikato River up to the middle line, which bordered their lands. [10] The plaintiffs claim that the Crown must have been aware that the ad medium filum principle was not know to the Pouakani people and that they never intended to part with the river bed and that in light of its Treaty obligations and rights, the Crown owed a duty of good faith to those owners, such that the plaintiffs say that the Crown holds that part of the river bed in trust for the Pouakani people. [11] Mr Millard emphasised that the nature of the plaintiffs' case, which I have briefly summarised, is one that only the successors to the original owners of the Pouakani lands can make. He drew attention to the fact that the Pouakani Claims Settlement Act, by section 9, defines the Pouakani people as:All individuals who are the descendants, as determined by the Maori Land Court, of the original owners of the Pouakani Block.[12] The Crown's acquisition of the relevant parts of the land adjacent to the Waikato River is clarified in verified answers to interrogatories issued by the plaintiffs dated 28 September 2006. I set out in italics the relevant parts of the interrogatories issued and in ordinary type the answers that are given.In relation to each part of the bed of the Waikato River adjacent to what used to be: (a) Pouakani 1; (b) Pouakani B8; (c) Pouakani C3; (d) Pouakani B10; (e) Pouakani B6A Out to the ad medium filum line, and, on the assumption such part of the Waikato River is non-navigable: 1. When does the Crown assert it acquired title to the bed of the Waikato River by virtue of the principle of ad medium filum?3. When it acquired the legal title for each piece of adjoining land.2. From whom does the Crown say it so acquired title to such bed of the Waikato River by virtue of the principle of ad medium filum?4. The Crown acquired the land, in each acquisition, from the relevant owners as at the time of each acquisition. 3. How does the Crown say it acquired title to such bed of the Waikato River (ie by purchase, proclamation etc)?5. The Crown acquired title to such bed of the Waikato River by application of the ad medium filum rule upon the acquisition of each parcel of the adjacent land. The Crown acquired each parcel of the adjacent land as follows.[13] Before dealing specifically with the time and method of acquisition by the Crown in respect of each Block it is appropriate to record that in respect of the Pouakani No 1 Block. Mr Beck advised the Court that interrogatory 6 required an addition to the following effect:Pouakani No 1 was purchased by the Crown under Deed 1768. On 24-9- 1887 the purchase was approved by the Court.That position was confirmed by an affidavit of JB Parker affirmed on 29 January 2007. [14] What is significant from the answers is that Pouakani No 1 Block was purchased by the Crown under a deed on or about 24 September 1887, Pouakani No B6A was purchased by the Crown under Auckland Deed 3246 on or about 25 July 1899, Pouakani Block C3,B8 and B10 were purchased by the Crown under Auckland Deed 1809 dated 12 March 1892. In each of the above cases ownership of the lands had been investigated by the Native Land Court in 1886 and 1887 and ownership had been vested in the Pouakani people. The Crown's answer to the interrogatories in respect of the subject lands with the exception of Pouakani No 2 show how the Crown acquired these lands from the Pouakani people. [15] The answers to the interrogatories provide in respect of Pouakani No 2 that this Block was created from what the Crown had acquired in respect of Pouakani C3, Pouakani B8 and part of Pouakani No 1. It was then vested in Wairarapa Maori in satisfaction of promises made in the Wairarapa Lakes Agreement of 1896. It was known then as the Pouakani No 2. It had frontage to the Waikato River. There followed two acquisitions under the Public Works Act 1928 whereby the Crown reacquired those lands.The application for directions as to service[16] Mr Beck placed the individuals and groups sought to be served into three categories, namely: a) Groups involved in the plaintiffs' now abandoned s 30 Ture Whenua Maori Act 1993 application and who had contested the Pouakani people's exclusive rights and representative status; b) Groups claiming interest in the Waikato River and claims to the Waitangi Tribunal, on the basis that they claim historical and cultural connections relevant to the scope of any Crown duty or constructive trust; andc) Mighty River power. [17] At the resumed hearing, the grounds advanced in support were clarified. Mr Beck confirmed that the application relied on the position that the proceeding was, in essence, a Part 4 proceeding. That was because the claim amounted to a claim by a beneficiary under a trust in terms of r 447. [18] On my preparation I had reached the same preliminary view. That led me to a consideration of r 451(2) of the High Court Rules. That Rule requires the Court, when deciding whether to make directions as to service, to consider:What persons or classes of persons are interested in or may be adversely affected by the relief sought by the plaintiff [19] In my discussions with counsel it became apparent that the plaintiffs were not seeking, in this proceeding, an order which created an immediate proprietary right. In short, they were seeking a declaration that the Crown held parts of the river bed of the Waikato River adjoining the subject land as trustee on behalf of the successors of those persons from whom the Crown acquired the land. Mr Millard acknowledged that an amended statement of claim was required which clearly spelled out this position. He nevertheless invited me to proceed with the application on the basis that I have just referred to. [20] I put to Mr Beck that if no immediate proprietary right was sought in this proceeding, it was difficult to see how the parties, with the exception of one group, could be said to be interested in or adversely affected by the actual relief which was sought by the plaintiffs. That is because, with the one exception, which I will refer to shortly, none of those other parties could claim an interest arising out of the transfer to the Crown by the plaintiffs' predecessors. [21] The exception relates to the groups involved in the plaintiffs' now abandoned s 30 Ture Whenua Maori Act 1993 application and who had contested the Pouakani people's exclusive rights and representative status. [22] Their position, however, might not be affected either by the limited relief sought if:a) Both the plaintiffs and defendant confirmed that the Court was not being asked, in this proceeding, to define or accept precisely who are the successors of the persons from whom the Crown acquired the subject land; and b) In the event that there is an adverse finding in this proceeding, that the defendant acknowledge that, in respect of the group covered by the exception, any judgment obtained in this proceeding would not be pleaded as an estoppel in respect of any subsequent claim by those persons mentioned in the exception. [23] Mr Beck indicated a need to take instructions. He confirmed to me that he could provide no submission which would justify giving notice to the parties who are in the exception if the two points that I have referred to in the proceeding paragraph were confirmed both by the plaintiffs and the defendant. [24] The position reached leads me to the position that an interim judgment confirming the position just outlined should now issue so that: a) The plaintiffs has fifteen working days to complete an amended statement of claim covering the positions referred to in this judgment; and b) The defendant then have a further fifteen working days to confirm that his concerns concerning the giving of notice and the approach in respect of the persons covered by the exception have been either met or acknowledged, as appropriate. In addition, of course, the plaintiffs would need to confirm the position in relation to the parties covered by the exception. At the foot of this interim judgment directions to cover this position are accordingly made.The application for further particulars[25] The defendant seeks further particulars in respect of paragraphs 28, 33, 37, 38 and 39 of the third amended statement of claim dated 23 June 2006. [26] The application relies on rr 108 and 185 of the High Court Rules and the guidance given by the Court of Appeal in Price Waterhouse v Forex Group Ltd CA 179-98 30 November 1998 at 17-19. For reasons which are clear from what follows in this judgment a further discussion of the applicable principles is not required. [27] Counsel's submissions clarified the defendant's concerns in respect of paragraphs 37 and 38. I need not detail the position fully save to say that it is adequately covered by Mr Beck's memorandum of 26 January 2007 and Mr Millard's confirming memorandum of 30 January 2007. On that basis, I analyse paragraphs 37 and 38 no further with respect to the application for particulars.Paragraph 28[28] Paragraph 28 provides:Duty Owed By the Crown 28. Arising out of: (a) The provisions of the Treaty; (b) The right of pre-emption in favour of the Crown; and (c) The disability of the owners of the Pouakani Lands at the tie of the taking and sales described in paragraphs 16(a) and 19, ie. Being the disability described in paras 27C to 27F; The Crown: (d) as a party to the Treaty has and had a duty to act reasonably and in good faith towards Maori (with a reciprocal obligation on Maori); (e) Has and had fiduciary obligations or at least obligations akin to fiduciary obligations to the Maori owners of the Pouakani Lands, in its dealing with them.Particulars of the Fiduciary Obligation The fiduciary obligations owed by the Crown to the Maori owners of the Pouakani Lands include the obligation to deal fairly and equitably and further: (i) to only extinguish native rights (including to the beds of the rivers) on fair terms; and (ii) to ensure that free and informed consent is obtained before extinguishing native rights (including to the beds of rivers); (iii) to explain the exact nature of the dealing when dealing with native rights, particularly rights to the river bed when such rights are based on legal concepts that were alien to Maori (including that the purchase of dry (and visible) land includes land under water and the concept a river can be divided into 2 based on the medium ad filum rule, (itself an arcane term unlikely to be known to Maori at the time)); (iv) to obtain the specific agreement from the Pouakani People to take the bed of the Waikato River to the extent it adjoins the River Land; (v) To ensure that proper compensation is paid for loss of native rights (including to the beds of rivers).[29] Two specific complaints remained in Mr Beck's submissions. The first was a lack of distinction between fiduciary duties on the one hand, and duties akin to fiduciary obligations on the other. The second is that it is alleged that there is a lack of clarity as to the origin of the duty which was relied upon. [30] I deal with these two matters. Mr Millard confirmed what seems clear to me on reading the statement of claim, that the reference to duties akin to fiduciary obligations arises by virtue of the fact that the party against whom the duty is alleged to arise is the Crown. For that reason, there is a need to plead that if conventional fiduciary obligations are not applicable in respect of the Crown, then fiduciary duties which are analogous are, nevertheless, still appropriate. That is the purpose and thrust of the pleading. Mr Millard drew attention to the discussion in Butler Equity and Trusts in New Zealand (2003) at 37.3.3. The authors acknowledge the need to await further decision before the specific content of the duties are specifically examined. The pleading, however, in my view, sufficiently advances the basis for the claim that is made.[31] I deal with the second complaint: the alleged lack of specificity relating to the origins of the duty. Mr Millard confirmed that one can read literally what is set forth in paragraph 28. That being the case, the origins are spelled out quite clearly and comply with the pleading requirements of the High Court Rules. Accordingly, I reject the application so far as it relates to paragraph 28.Paragraph 33[32] Paragraph 33 provides:33. The Crown knew or ought to have known at all relevant times when it acquired the land as described in paras 16(a) and 19, that the Pouakani People were unaware of the medium ad filum principle. Particulars The Crown knew or ought to have known that: (a) the medium ad filum principle is an arcane concept not known to most persons who are not lawyers. Even the name of the principle is a non-English expression; (b) English was not the first language of the Pouakani People; (c) The Pouakani People did not have legal assistance; (d) The concept that the sale of dry (and visible) land would also include the sale of land under water is not an obvious concept; (e) It was known or ought to be known to the Crown that the Pouakani People had no knowledge of the principles and presumptions of English Law and no experience of selling land; Sub-Particulars of Paragraph 33(e) (i) The Plaintiffs repeat paras (a), (b) and (c); (ii) The Plaintiffs say that the sale or taking of the relevant land occurred early in the course of contact between the Pouakani People and European officialdom; (iii) Prior to contact with European officialdom, as the Crown knew or ought to have known, Maori did not sell land;(iv) Under colonial rule sale was only feasible once "title" had been established by the Native Land Court; (v) At the time, pursuant to the Native Land Alienation Restriction Act 1884 the Crown right of pre- emption had been imposed on this area which meant that the Pouakani People could not sell (or gain experience of selling) to other than the Crown; (vi) The relevant taking of Pouakani 1 (as set out in para 16(a)) occurred at the same time as title was determined by the Native Land Court; (vii) The relevant sales (as set out in para 19) occurred very soon after title was determined by the Native Land Court. (f) The Crown knew or ought to have known that the Pouakani People were unlikely to have intended to sell the bed of the Waikato River for the reasons in paras 31 and 32; (g) The maps of the land being acquired that were then available to the Pouakani People (being maps prepared by or on behalf of the Crown) did not show the boundaries of the land as extending into the Waikato River; (h) The price per acre allegedly paid did not include the area of the land that is part of the Waikato River.[33] Mr Millard confirmed that the time span which is covered by the reference at all material times is substantially that which is set out in [14] of this judgment and allowing a period for the first transfer which covered the negotiation. He also confirmed that although mention is made in the amended statement of claim to Pouakani B6E, that is not one of the relevant pieces of land which is the subject of this proceeding. In short, the claim is limited to the bed of the river adjacent to the five blocks which are referred to in [12] of this judgment. [34] To the extent that any more specificity is required it seems to me it could only be required to enable the defendant to advance a defence of laches or an equitable bar by analogy defence. It is not necessary for a plaintiff to plead to enable such a defence to be advanced. If evidence is sought the proper way to obtain it is through the interrogatory process. Accordingly, I conclude that there is no need to further plead in paragraph 33, in respect to the words at all relevant times.[35] The next complaint made with respect to paragraph 33 concerns subparagraph (c). Mr Beck complains that there is no pleading that the Pouakani people did not have legal assistance. Mr Millard readily conceded that that problem will be met in the amended statement of claim which will be filed and to which I have made reference in that part of the judgment dealing with directions as to service. There will, accordingly, be a direction at the foot of this judgment requiring the plaintiffs to plead specifically whether or not they received legal assistance.Paragraph 39[36] Paragraph 39 pleads:39. The Crown, acting through those officials who were responsible for the planning and oversight of the projects at the macro level in all relevant departments (being at least Ministry of Works and Development, under whatever name it was known at the time, together with such other departs as the Crown chose to include, the details of which are known to the Crown and not the Plaintiffs), has breached its obligations under the said Constructive Trust in relation to the bed of the Waikato River adjoining the River Land as follows: (a) By failing to consult the Pouakani People in relation to matters relating to the Waikato River, including during the planning, pre-construction, construction and operation of the hydro-electric schemes on the Waikato River. The relevant dams are: (i) Maraetai I, with the dam being constructed between 1946 and 1953 and the power station first becoming operational in 1952. An additional station (Maraetai II) parallel to the river and downstream from Maraetai I was constructed between 1959 and 1961 and from 1967 to 1970, first becoming operational in 1970; (ii) Whakamaru, with the dam being constructed between 1949 and 1956 and the power station first becoming operational in 1956; (iii) Waipapa, with the dam being constructed between 1955 and 1961 and the power station first becoming operational in 1961. In each case, flooding occurred at about the time the power station first became operational.(b) By allowing the Waikato River to be flooded over the Pouakani Lands as part of construction of the hydro-electric dams referred to in para 39(a)(i) to (iii); (c) By failing to protect from destruction islands, taonga and wahi tapu on the river including: - the hot springs at Waimahana (as a result of the Whakamaru dam); - the Waipapa rock paintings (as a result of the Whakamaru dam); and - geothermal springs (as a result of the Whakamaru dam); (d) By allowing hydro-electric dams to be erected, hydro lakes created and hydro-electricity plants and schemes to be implemented on the Waikato River and adjoining the River Land; (e) By failing to account to the Pouakani People for any payments or financial benefits received in respect of use of the bed of the Waikato River adjoining the River Land which benefits commenced as soon as the respective power stations became operational; (f) By failing to provide Pouakani People access to the Waikato River adjoining the River Land such denial of access occurring and being a direct consequence of the construction of the dams and subsequent creation of the respective hydro- electric lakes.[37] The defendant's complaint is that the plaintiffs have not identified the Government Department or officials with sufficient particularity. Mr Beck, in his oral submissions did not press this matter, in my view quite rightly. The allegation is essentially a failure to consult. It therefore applies to all departments and officers of the Crown. Nothing clearer can be pleaded than that position. By contrast, if there is a pleading asserting that a particular department took or acted in a certain way one can understand why that department or officer should be named in the pleading. That is not the case here. Accordingly, no order or direction is required, in my view, in respect of paragraph 39 of the third amended statement of claim. [38] As a result of my examination of the two applications, I make the following orders and directions;a) The plaintiffs shall file and serve within fifteen working days of this judgment an amended statement of claim which covers the matters discussed in this judgment: i) Under the heading The application for directions as to service; and ii) At 33 and [35] of this judgment; b) In addition, the plaintiffs shall file a memorandum within fifteen working days which confirms the position discussed in [24] of this judgment; c) The defendant shall file and serve a memorandum within fifteen working days of receiving the plaintiffs' amended statement of claim which confirms his position on the position discussed at [24] of this judgment; d) A telephone conference case management conference shall be held in respect of this file at 4.30pm on 2 April 2007. Its purpose shall be to: i) Check that there are no outstanding matters in respect of the applications which are dealt with in this judgment or, if so, to make appropriate directions relating to them; ii) Determine whether a settlement conference or a mediation is appropriate and give directions relating to same; iii) Ascertain the trial duration required, what special trial directions are required and fix, if possible, a trial date. Counsel shall file and serve memoranda dealing with these items two working days before the conference.Costs[39] I reserve costs in relation to the two applications. The applications have clarified the scope of the proceeding. Both parties have achieved a measure of success in that respect. The final position, however, cannot really be determined until the steps which I have indicated are to be made, are in fact taken and the position signalled to the Court. Although my preliminary view is that costs should lie where they fall in respect of the interlocutory applications it is premature to come to any final decision until the further steps, which I have ordered are to be taken, have been completed and reviewed by the Court. These, then, are the reasons why costs are reserved at this stage. _____________________ JA Faire Associate Judge