ARMS AND STRATAGEM TRUSTEE SERVICES LTD & ORS V NEW PLYMOUTH DISTRICT COUNCIL HC NWP CIV 2006-043-000399

ARMS AND STRATAGEM TRUSTEE SERVICES LTD & ORS V NEW PLYMOUTH DISTRICT COUNCIL HC NWP CIV 2006-043-000399 14 May 2008IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY CIV 2006-043-000399UNDER the Fair Trading Act 1986 BETWEEN M A ARMS, L B ARMS AND STRATAGEM TRUSTEE SERVICES LTD AS TRUSTEES OF THE PEAK TRUST & ORS Plaintiffs AND NEW PLYMOUTH DISTRICT COUNCIL Defendant Hearing: 20 and 21 March and 11 June 2007 Appearances: A L Hassall QC and D J Anderson for Plaintiffs D Goddard QC, J Shackleton and K C Millard for Defendant Judgment: 14 May 2008JUDGMENT OF COOPER JThis judgment was delivered by Justice Cooper on 14 May 2008 at 11.00 a.m., pursuant to r 540(4) of the High Court Rules Registrar/Deputy Registrar Date: Solicitors: Dennis King Law, PO Box 1092, New Plymouth Simpson Grierson, PO Box 2402, Wellington Copies to: A L Hassall QC, PO Box 19025, Hamilton D Goddard QC, PO Box 12016, WellingtonTable of ContentsPara. No. Introduction [1]Procedural background [5]Factual background [13]Approach to defendant's applications [71]Fair Trading Act claims [85]Defendant's argument [94]Plaintiffs' argument [111]Discussion [129]Conclusion [159]Promissory estoppel [161]Defendant's argument [165]Plaintiffs' argument [181]Discussion [192]Conclusion [203]Negligent mis-statement [204]Defendant's argument [209]Plaintiffs' argument [216]Discussion [223]Conclusion [233]Result [234]Costs [236]Introduction[1] For over 30 years the lessees of land in Waitara owned by the New Plymouth District Council and its predecessors have sought the right to buy the freehold of the properties that they occupy. [2] At one stage it appeared that their aspirations could be satisfied. On 12 December 1989, the Council resolved to proceed with a freeholding policy. However, because of the basis upon which most of the land is held by the Council it was realised that amending legislation would be necessary if the Council was to be free to spend the proceeds of sale as it saw fit. In 1992, the Council procured the introduction to Parliament of the New Plymouth District Council (Land Leasing) Bill designed to secure that end. [3] The Bill ran into difficulties because of concerns held by central Government about the implications of sale of the land in the context of Treaty of Waitangi settlement discussions between the Crown and Te Atiawa. The Bill made littleprogress. Yet, on various occasions, the Council assured the leaseholders that it remained committed to the freeholding policy. Following the triennial general election that took place in 2001, the Council then elected resolved to re-examine the freeholding policy. In accordance with the various procedural requirements set out in the Local Government Act 2002 it engaged in an extensive course of consultation with the public. At the conclusion of that process it resolved to change its policy. By its resolution of 30 March 2004, the Council decided that the land should be offered to the Crown on terms which included the land being included in the Crown's offer to settle Te Atiawa's historical Treaty claims and that the Council receive fair market value for the land. At the same time, it resolved that the Bill be withdrawn. [4] Over 770 (papers before the Court give the different numbers of 776 and 800) leasehold properties were affected by the Council's decision not to proceed with the freeholding policy. Many of the leaseholders were very aggrieved by the Council's change of policy. No fewer than 148 proceedings have been commenced in the New Plymouth District Court. They have subsequently been transferred to the High Court for hearing. The claims all allege causes of action against the Council based on the Fair Trading Act, on promissory estoppel and on negligent mis-statement.Procedural background[5] The Council formed the view that the claims were without merit. It decided that it would apply to have them struck out and/or for the entry of summary judgment for the defendant on the claims. Sensibly, the parties conferred with a view to selecting six representative cases from the 148 claims filed which could then form the subject of the defendant's interlocutory applications. [6] The claims in the six test cases were commenced at various times in the period from 20 to 28 July 2006. There has been no formal order for consolidation of the six cases so selected. The intituling on the front of this judgment has been restricted to one of those cases only. However, I record that before the Court at the same time were identical applications by the defendant in respect of the following additional proceedings:CIV 2006-043-404 SF Martin & WF Martin v New Plymouth District Council CIV 2006-043-461 MS Smith and C Armstrong-Smith v New Plymouth District Council CIV 2006-043-475 DM Musker and OI Musker v New Plymouth District Council CIV 2006-043-521 RE Campbell v New Plymouth District Council CIV 2006-043-532 CM Donald and JM Donald v New Plymouth District Council[7] This judgment relates to all of those claims accordingly. On 19 October 2006 I made various procedural directions essentially implementing the parties' agreement that the six representative cases should be selected to form the basis of the Council's intended applications to strike out and/or for summary judgment. In the minute that I issued that day I recorded that:It was envisaged that the decisions on those case would then result in the remaining proceedings being able to be determined on the basis of what had been decided in respect of those cases. At the very least, decisions on the six representative cases would reduce the time needed to be spent on the balance.[8] In accordance with the procedural directions that I then made the matter was ready to be heard and was heard on 20 and 21 March 2007. At the conclusion of the hearing, however, Mr Hassall QC announced his intention as counsel to review the pleadings which had been the subject of the argument over the preceding two days with a view to remedying such defects that he considered to be capable of remedy. This was a surprising turn of events given the basis upon which the parties had, by consensus, prepared for the hearing. However, as Mr Hassall pointed out, the proceedings had not been set down and consequently the plaintiffs were able to amend their claims as of right. If the consequence of that was that the argument that had just taken place needed to be repeated or substantially repeated, then that simply reflected the fact that the defendant had chosen to proceed with its applications at a time when it was procedurally possible for the plaintiffs to amend their claims as of right. [9] It is, of course, a reasonably familiar occurrence that faced with an application to strike out a claim a party amends its pleading or is given leave to do so as a consequence of the hearing of the strike out application. What made that courseunusual in the present case was the degree of co-operation by which the parties had selected the test cases and agreed on the procedure to be followed on the defendant's applications. For the Council, Mr Goddard QC protested that the course of action that the plaintiffs intended to pursue was contrary to the spirit of what had been agreed. [10] However, being of the view that the plaintiffs were entitled to proceed as Mr Hassall proposed I reserved my decision in the meantime, on the basis that Mr Hassall would file and serve a memorandum fully explaining his intended course of action on or before 26 March 2007. After affording Mr Goddard an opportunity to reply by 30 March, I directed that there should be a telephone conference to review the position in April. [11] That conference took place on 19 April. As a result of it, I ordered that the plaintiffs file any amended statements of claim upon which they wished to rely together with any amended notices of opposition or an affidavit in support of that opposition. I ordered that contemporaneously, a memorandum of counsel outlining the implications of the amendments in respect of any of the arguments made by the plaintiffs at the hearing that had already taken place should also be filed and served. I directed the defendant to respond on or before 23 May. [12] The Registrar then arranged a further fixture for the matter and that took place on 11 June 2007.Factual background[13] As a result of the local government re-organisation that occurred throughout New Zealand in 1989, the defendant is the successor of the North Taranaki District Council which was itself the result of the reorganisation of Taranaki County and Waitara Borough that occurred in 1986. I shall refer to all of these bodies as "the defendant" or "the Council" in the balance of this judgment, since each new Council succeeded to the rights and liabilities of its predecessor.[14] Within the District of the old Waitara Borough was land held as an endowment for various purposes. Most of that land was held subject to the provisions of the Waitara Harbours Act 1940 and its amendments. That Act provided for the dissolution of the Waitara Harbour Board. It vested certain land previously the property of the Waitara Harbour Board in the New Plymouth Harbour Board. The balance of the Waitara Harbour Board's property was vested in the Council for municipal purposes, and also subject to the provisions of s 9 of the Act. [15] Under s 9(1), the Council was directed to hold any money received in respect of the lands in a separate account, and to apply the money for a number of stated purposes. Those purposes included the prevention of erosion by the Waitara River, the maintenance and reconstruction of any bridge over the river within the Borough's District, the payment of interest and principal on loans raised in connection with any such bridge and costs and charges incurred by the Council in maintaining harbour lights. [16] Under s 9(2) if, after 1 April 1961 it appeared that there were surplus moneys in the separate account that the Council was obliged to maintain, the Governor- General-in-Council was empowered to appoint a Commission under the Commissions of Inquiry Act 1908. The function of that Commission would be to determine whether or not the money was needed for any of the purposes set out in s 9(1). If the Commission determined that the money was not needed for those purposes, then the amount of the surplus was to be paid by the Council to the New Plymouth Harbour Board for general harbour purposes. [17] Other land to which this proceeding relates was held pursuant to other endowments for town improvements, in trust as an endowment for maintenance of the Waitara Library and for general purposes. [18] Both the land subject to the Waitara Harbour Act 1940 and the other land was leased mainly for residential purposes, but some was also leased for commercial and industrial purposes. When consideration was subsequently given to sale of the lessor's interest to the lessees, the Council's legal advisors took the view that the proceeds of sale might be such as to create a surplus payable under s 9(2) of theWaitara Harbour Act in respect of the land subject to that Act and that, in respect of the balance of the land, s 230(4) of the Local Government Act 1974 would apply. Under the terms of that provision, the proceeds of sale would have to be applied by the Council as soon as practicable: in or towards the purchase of other land to be held for the same purposes as the land so sold or exchanged .[19] From time to time consideration was given by the defendant to the sale of the fee simple to the leaseholders as a result of pressure from them. In 1977 a petition was received signed by some 300 residents who wanted the ability to freehold their properties. At the time, the Council was not interested in pursuing the proposal because of the limitations which existed on the application of the funds that would be derived from such a sale. However, further consideration was given to the issue in 1986, and in 1989 a survey was undertaken with a view to ascertaining the attitude of the lessees generally towards freeholding. According to a report (dated 6 September 1990) later prepared by the defendant's Property Officer, Mr Schofield, "an overwhelming majority of those who responded were in favour of freeholding". [20] Following the creation of the new Council in 1989 the matter was reviewed by it and on 11 December 1989 the following resolution was passed:That having considered the report of the Property Officer that the former North Taranaki District Council had invited the lessees of its 800 leasehold properties in Waitara to consider freeholding, and noting that there was a significant number interested in negotiating to purchase, the following action be taken:- a) The Council adopt a policy of permitting the owners of leasehold property in Waitara to purchase the freehold of those properties; b) The sale price be determined by way of a special valuation; c) Prior to the application of any funds derived from the sale of leasehold properties an investigation be undertaken to determine the most satisfactory use of the capital, and one which will provide the greatest benefit to Waitara; d) Any sale of leasehold property in Waitara be preferably by way of settlement in full on transfer of title, provided that opportunity shall be given for sales to be by way of deferred payment the detail for which shall be determined by the Administration and Finance Committee;e) The foregoing proposed action be referred to the Waitara Community Board for comment.[21] However, in his report of 6 September 1990, Mr Schofield wrote that:An investigation into the ability of the Council to sell the endowment lands at Waitara was undertaken by Officers of the North Taranaki District Council and it is quite clear that all Council owned land has no prohibition to its sale. While the proceeds of the sale of land not subject to a trust or endowment can be utilised by the Council as it sees fit, the same does not apply to the endowment lands. There seems to be little point in embarking upon a freeholding exercise for the purpose of purchasing further endowment lands, and a legislative change should be sought to achieve the maximum possible benefit to the Waitara township from the funds derived from the sale of leasehold lands.[22] Mr Schofield recommended that prior to embarking on a project to enable the freeholding of the leasehold land, there should be further consideration, amongst other things, of the possibility of securing legislative change to enable the Council to apply any funds derived from the sale of the leasehold land in such a way as to produce the greatest benefit to the town of Waitara. [23] Mr Schofield wrote a further report for the consideration of the Council on 15 March 1991. In this report he confirmed that legislative change would be required to enable the Council to deal, as it saw fit, with the proceeds of sale of the land. Unless statutory authority to do otherwise were able to be obtained, the proceeds of the sale of endowment lands or lands held in trust would have to be used for the purchase of other lands to be held for the same purpose. In the meantime a draft Local Bill had been prepared to enable the Council to meet its objective of having flexibility in the disposal of the funds derived from sales. Mr Schofield recommended that the Council's General Manager be instructed to initiate the action necessary to promote the Local Bill, and that the sale price of the land should be determined in accordance with the special valuation procedures under s 230(6) of the Local Government Act. [24] At its meeting held on 8 April 1991 the Council resolved as follows:That having considered the report of the Property Officer on the progress on the freeholding of Council owned sections within Waitara and the further steps now required in respect of such land:-a) The General Manager be instructed to initiate the action necessary to promote local legislation empowering the New Plymouth District Council to offer for sale the freehold of various leasehold properties at Waitara and to enable all funds derived from the sale of such lands to be credited to the General Revenue of the Council; b) The sale price of the land be determined in accordance with Section 230(6) of the Local Government Act 1974; c) Landcorp be engaged in a consultancy capacity to assist with legal formalities and the development of a sales strategy prior to offering the land concerned for sale.[25] On 10 and 18 March 1992 the Council placed notices in the local newspaper,The Daily News. The advertisements represented the initiation of the necessary procedures to promote the Local Bill. The advertisements were headed "Local Bill – Waitara Freeholding", those words appearing under the Council's logo and name. The notices read as follows:The New Plymouth District Council hereby notifies its intention to introduce a local bill to the New Zealand House of Representatives (Parliament) to be known as the "New Plymouth District Council (Land Vesting) Act 1992". The Bill is the result of a resolution passed by the Council to promote local legislation to empower the Council to offer for sale the freehold of various leasehold properties at Waitara. The principal object of the bill is to release certain Council land at Waitara from the trust, endowments and restrictions which affect the land and to vest the land in the Council in fee-simple.[26] On 17 June 1992 the New Plymouth District Council (Land Vesting) Bill ("the Bill") was introduced to Parliament by Mr John Armstrong, then the Member of Parliament for New Plymouth. It was a brief measure. The long title stated that it was "an Act to vest certain land in the New Plymouth District Council freed from the trusts, endowments and restrictions affecting the land". The substantive clause was clause 3, which was in the following terms.3. Land freed from trusts, endowments and restrictions - (1) The vesting in the Council as endowments of the land described in the First Schedule to this Act is hereby cancelled; and the said land is hereby vested in the Council for an estate in fee simple subject to all leases, licences, easements, liens, and encumbrances existing in respect of the land immediately before the commencement of this Act, but freed and discharged from all express or implied trusts, reservations, endowments, and restrictions affecting it on that date.(2) The vesting in the Council of the land described in the Second Schedule to this Act for municipal purposes pursuant to section 5(1) of the Waitara Harbour Act 1940 is hereby cancelled; and the said land is hereby vested in the Council for an estate in fee simple subject to all leases, licences, easements, liens, and encumbrances existing in respect of the land immediately before the commencement of this Act, but freed and discharged from all express or implied trusts, reservations, endowments, and restrictions imposed by that Act or otherwise.[27] Clause 4(1) of the Bill provided that nothing in the Act should affect the rights of the lessees under existing leases. The Waitara Harbour Act 1940 was to be repealed by clause 6 of the Bill. [28] After its introduction, the Bill was referred to the Internal Affairs and Local Government Committee. The Committee called for submissions. The Council itself made a submission under the signature of its General Manager, Mr Sampson, in which it noted that the land referred to in the Bill comprised some 776 leasehold properties at Waitara, most of which were residential. It mentioned that the Bill had the support not only of the Council, but of the Waitara Community Board which had approved its introduction. Further, it was said that the Bill would "enable the Council to satisfy the wishes of a large number of lessees who would like to purchase the freehold interest in their properties", while lessees who did not wish to freehold would not be obliged to do so and could continue to lease the land in accordance with existing lease arrangements. [29] Two significant events then occurred. First, the triennial general election intervened in October 1992 and a new Mayor was elected, Mrs Claire Stewart. Second, the Council received a copy of a letter dated 3 November 1992 that had been written by the Minister of Justice, Mr Douglas Graham to Mr John Armstrong MP. The letter was headed "New Plymouth District Council (Land Vesting) Bill" and continued as follows:I have been asked by the Government to advise you of its concern over the provisions of the above Bill. As you will be aware, the Taranaki area is subject to claim by Mäori over the confiscation of their land in the nineteenth century. The Tribunal is very likely to find the Crown to be culpable over those confiscations. I understand that part of the land referred to in the Bill includes the Peka Peka Block that, as you will know, has special significance to Mäori. Itappears on the records as a Crown purchase of 24 February 1860 but is in fact the contested purchase (from minor chief Te Teira) that was challenged by the paramount Te Atiawa chief Wiremu Kingi. The refusal of the colonial government to heed Kingi's protests led to the first Taranaki War from March 1860. As the Sim Commission of 1926-7 noted, this war led to the second Taranaki and the Waikato wars that in turn led to the confiscations that destroyed the economic bases of the Taranaki and Tainui and other iwi. All land subject to the Bill is land that was either included in the disputed purchase or confiscated in the wake of the wars under the provisions of the New Zealand Settlements Act 1863. The Government considers that enactment of the Bill, before a Taranaki settlement is reached – given the very poignant history of this land – would not only jeopardise the chances of a Taranaki settlement but would be viewed by a number of significant tribes as a calculated offence by the Crown to all Mäori. These obstacles might be overcome, however, if local Mäori concerns over the Bill were to be resolved through discussions with the New Plymouth District Council. Ministers understand that the Te Atiawa Tribal Council has formally sought discussions with the incoming district council on general land issues including land covered by the Bill. We understand that the tribal council is the only tribal group to have made submissions on the Bill. I would therefore be grateful if you could convey to the district council the Government's support for such discussions and if you could keep me informed of progress. I should mention that I have sent a copy of this letter to John Carter as chairperson of the Internal Affairs and Local Government Select Committee and have advised him of the Government's preference that the Bill not be progressed pending the outcome of discussions between the district council and local Mäori.[30] Shortly after receiving that letter the Council appointed a sub-committee for the purpose of entering into negotiations and discussions with the Te Atiawa Tribal Council on the various land issues. Meetings between the sub-committee and the Tribal Council then took place, but no progress was able to be made. [31] On 30 November 1992, Mr Musker (now one of the plaintiffs in the test case proceedings) wrote expressing his concern over what appeared to be the Council's "too ready acquiescence to Justice Minister Graham's pressure". He stated his belief that it was the Government's obligation to settle land claims under the Treaty of Waitangi, not the Council's.[32] Mr Musker's letter drew the following reply from the Mayor, dated 4 December 1992:Dear Mr Musker, Thank you for your letter of 30 th November 1992 regarding the New Plymouth District (Land Vesting) Bill, and your comments on the newspaper article with responses from the Minister, Mr Grant Knuckey and myself. There are some points I would like to make in response to your letter. Firstly, that the Minister of Justice (Mr Doug Graham) will not allow the Bill to proceed in The House until the outcomes of the discussions with Te Atiawa Tribal Council are decided. So it is in the leaseholders' interests that we start discussions very soon. Council must always respond to a Minister's request, particularly so when we own the Deed of Title to the land affected by the Bill and we wish to freehold the leases. Claims to the Waitangi Tribunal regarding the ownership of the Waitara lease land have found the Crown culpable and the Minister has stated this. Both Mr Knuckey and myself gave assurances that the leaseholder's right to freehold would be respected, whatever the outcomes of ownership. Until Council starts discussions I do not know the exact nature of Te Atiawa's claims and what Council's response will be that is all part of the discussions. You can be sure we are there in the leaseholders' interests Mr Musker, and that you will be kept informed the moment we have results of the discussions.[33] Over the following year there were evidently meetings between the Council's sub-committee and the Te Atiawa Tribal Council, although the detail of those meetings has not been given in evidence. It can be inferred that there were such meetings however from the terms of a resolution passed by the Council at its meeting of 13 December 1993 which referred to a report that had been received from the sub-committee on further discussions with the Tribal Council in an endeavour to reach agreement on land matters which might enable the Bill to proceed. At this meeting, the Council adopted a number of principles for the purposes of further discussion with the Tribal Council and so as to facilitate passage of the Bill. The principles included preservation of the individual rights of leaseholders, the grant of the right to freehold to any lessee who wished to do so, the development of land transfer proposals so that vacant land might be transferred from the Council to the Crown for subsequent "restoration" to Te Atiawa, and the development of proposals with regard to the sharing of revenue from leasehold properties for the freeholding ofthem. Another principle referred to was that any compensation to Te Atiawa should be met entirely by the Crown. [34] In an affidavit dated 13 December 2006 that he swore in the current proceeding, the Council's then General Manager, Mr Sampson referred to a concern that had arisen at this point that the Waitara community "was receiving misleading messages through the media". The Council decided that the Mayor would write to each leaseholder advising of the present position, and of the Council's views. [35] A copy of what was clearly a multi-addressee letter, sent by the Mayor, dated January 1994 was attached to Mr Sampson's affidavit. The letter read as follows:RE: FREEHOLDING WAITARA LEASES There is a lot of concern in the community about the Leasehold sections in Waitara. There have recently been several misleading statements reported in the Newspapers. The rights of Waitara citizens are of the utmost importance to Council. We send this letter, because you need to have up-to-date, accurate information, from your Council. BACKGROUND In 1992 Council sponsored a special Bill (Act of Parliament) to amend the law relating to the way monies from the freeholding of lease land in Waitara could be used. The Te Atiawa Tribal Council made a submission to Parliament on the Bill and raised objections. The Minister of Justice, The Honourable Douglas Graham, noted that the land was either included in the disputed Waitara purchase or confiscated in 1863 after the land wars. He indicated that he was unhappy about the Bill proceeding until there had been consultation and discussions between the District Council and the Te Atiawa Tribal Council. Representatives of Council met with the Minister in May last year to clarify some points. Minister Graham confirmed that: 1. The Government, not Council, is responsible for obligations under the Treaty of Waitangi; 2. He had been advised by the Crown Law Office that the Waitara land is not Crown land and it is privately owned by the New Plymouth District Council; 3. In his opinion, the Te Atiawa people have no claim against Council land;4. The Government is willing to consider any matters that the District Council and the Te Atiawa people take to him. Our representatives have had several meetings with the Te Atiawa Tribal Council to try and resolve this issue for Leaseholders. RECENT PROGRESS After discussions in December 1993 between our representatives and the Te Atiawa Tribal Council, we agreed to a joint approach to the Minister which would bring benefits to the people of Waitara and to Te Atiawa. This approach involves: 1. Recognising that the individual rights of the people of Waitara occupying and leasing land in the disputed area should be preserved absolutely; 2. Ensuring that any Leaseholder who wished to freehold his or her land should be allowed to do so; 3. Looking at a proposal where vacant land owned by the Council could be transferred to Te Atiawa on condition that the Crown paid the Council the current true value for the land; 4. Negotiating with the Crown a level of compensation for Te Atiawa based on the lands revenue – from rent or freeholding – provided there was no loss to the Council, its ratepayers and citizens. THE COUNCIL'S COMMITMENT Finally, we are willing to assist Te Atiawa to obtain compensation from the Government for lands that were confiscated last century. The Council is committed to resolving this problem. We want harmony in the District. We wish to protect the rights of the Waitara Leaseholders, the benefits of our ownership of the land and to respect our obligations to the ratepayers of the District.[36] Although there were further meetings between the Council's sub-committee and Te Atiawa in June and July 1994, no progress was able to be made. The Council instructed Mr Sampson to write to the Minister of Justice and on 20 July 1994 he did so, noting amongst other things the Council's understanding that many of the Waitara leaseholders were most anxious that the Bill be enacted so that they could purchase the freehold interest. Mr Sampson asked that the Government agree to the Bill proceeding. The Minister sent an interim reply on 2 September 1994, advising that he would respond in detail to the letter once he had discussed the position with his Cabinet colleagues.[37] Before a full reply could be received, the Council received further letters from Mr Musker, dated respectively 5 and 17 December 1994 in which he urged the Council to renew its efforts to secure passage of the Bill. [38] A further letter, dated 6 January 1995, was then sent to the Council's general manager by the Minister of Justice. In the letter, the Minister noted that the Council's attempt to resolve the issues through discussions with the Te Atiawa Tribal Council had been unsuccessful. He continued:I have been asked by the Government to advise you that the Government remains concerned that if the Crown, in its role as legislator, were to support the enactment of the Bill, it could be seen to be in breach of its duty under the Treaty of Waitangi to act in good faith towards its Treaty partner. The Government is, therefore, not prepared to support the Bill at this stage, particularly in light of the importance to Taranaki Mäori of the area covered by the Bill, and given that Government support of the Bill could prejudice the Crown in any future Treaty of Waitangi negotiations with Taranaki Mäori. The Government could, however, reconsider its position on the Bill once the Crown has, in discussion with Taranaki claimants, determined how to address any proven grievances.[39] Mr Graham wrote again, on 24 February 1995. This letter was written to the Mayor, and it was in Mr Graham's capacity as now Minister in Charge of Treaty of Waitangi Negotiations. The letter read as follows:I am writing to inform you of the Crown's position in respect of the settlement of Taranaki Mäori Treaty of Waitangi grievances as it has come to my attention that the Council may be about to make a decision on the future of the 800 or so leasehold properties in Waitara. As I understand it the Waitangi Tribunal is hoping, following closing submissions by the claimants, to issue a preliminary report on the Taranaki claims. Following this, the Taranaki claimants may wish to commence discussions with the Crown on ways of progressing the resolution of their grievance. It is possible that some of the current issues in dispute, including the leasehold properties in Waitara, may be able to be resolved to the satisfaction of all parties in the context of such discussions. A decision by the Council to sell the leasehold properties would undoubtedly exacerbate the current situation and may well seriously harm the longer term prospects of a satisfactory resolution of this issue. I would appreciate it if the Council could be made aware of these issues prior to it making its decision on the future of the leasehold properties.[40] In response to that letter, the Council resolved not to take any further action in relation to the leasehold land for a period of six weeks. However, noting that ithad authority to sell the freehold interest in the land, it resolved on 10 April 1995 to seek advice about the process that would need to be followed in order for the land to be sold, including the valuation process that would first need to occur. In a further letter dated 14 April 1995, the Minister thanked the Council for agreeing not to take further action on the leasehold land for a period of six weeks, but noted that he could not guarantee that the Waitangi Tribunal's interim report would be released or that discussions between the Crown and claimants would commence in the very near future. Whilst the Crown was making every possible effort to expedite matters, he felt it necessary to reiterate his earlier advice that a decision by the Council to sell the leasehold properties would exacerbate the current situation, and might seriously harm the longer term prospects of a satisfactory resolution of the issue. He asked the Mayor to make the Council aware of those concerns before making any final decision on the future of the leasehold properties. [41] I infer that the Minister's letter must have had the desired result. In any event, there is no evidence that the Council took any further step to bring about the sale of the properties to the leaseholders prior to the next triennial local government elections in October 1995. Indeed, little happened in 1996 either. At one stage, the Council wrote, responding to a question that had been raised by the chairman of the Internal Affairs and Local Government Committee in Parliament, indicating that it did not wish to withdraw the Bill. Also, in June of that year, the Waitangi Tribunal released its preliminary report on the Taranaki claims. As is customary with such reports, it set out the Tribunal's preliminary reviews, against the possibility that that might expedite settlement negotiations. [42] On 27 February 1997 the Mayor sent another circular letter to the Waitara leaseholders. The letter read as follows:FREEHOLDING WAITARA LEASES In January 1994 I wrote to all leaseholders advising on the background to a special Bill (Act of Parliament) known as the New Plymouth District Council (Land Vesting) Bill which was intended to pave the way for Waitara lessees to freehold their sections. I would like to take the opportunity to advise on the current position.Acknowledging that some properties have changed hands and that the new lessees may not be aware of the contents of my previous letter it may be appropriate to start by giving a brief background. Following a petition by a number of Waitara leaseholders to freehold their sections, the Council resolved to proceed with an investigation as to the best method of achieving this. After considerable research it was apparent that the course of action that best suited the Council needs and achieved the lessee's wishes was a Special Bill to Parliament. This was presented to Parliament in 1992. The Te Atiawa Tribal Council made a submission to Parliament on the Bill and raised objections. The Minister of Justice at the time (and subsequently the Minister in Charge of Treaty of Waitangi negotiations), the Honourable Douglas Graham, noted that the land was either included in the disputed Waitara purchase or confiscated in 1863 after the land wars. He indicated that he was unhappy about the Bill proceeding until there had been consultation and discussions between the District Council and the Te Atiawa Tribal Council. More recently the Minister requested that the Council postpone making a decision on selling the leasehold properties until after the Treaty claims had been resolved. The Council is concerned at the slow progress being made in resolving the situation. All parties are in agreement that it is the Government and not the Council who is responsible for obligations under the Treaty of Waitangi; and the Government agrees that the Waitara land is not Crown land but that it is privately owned by the New Plymouth District Council. The Council's commitment to the Waitara leaseholders has not changed. The Council still considers the Waitara land to be freehold land and therefore not subject to any Treaty of Waitangi Claim; and the Council still recognises that the individual rights of the people of Waitara occupying and leasing land in the disputed area should be preserved absolutely. Unfortunately, until either an agreement can be reached between the Council and Iwi negotiators, or the Iwi and the Government reach a settlement on Treaty of Waitangi Claims, the Council is faced with somewhat of a stalemate in the freeholding of these leases. Just as the Council looks to protect the interest of the lessees in this situation, it also wishes to maintain a good relationship with Iwi that fall within its boundaries. Further, without the support of the Government, there is little chance of the Bill proceeding through Parliament. In summary, the Council is still committed to the Bill which if enacted will enable the freeholding of these lessees[sic]. It is also well aware of the complexities of the Taranaki Treaty of Waitangi Claims and the possible delays because of the depth and nature of the issues involved. The final outcome is possibly outside the Council's control however it will continue to try to influence a timely decision.[43] Another triennial general election took place in October 1998. Shortly after those elections, there were discussions between representatives of the Council and the Office of Treaty Settlements. However, no further progress was able to be made.[44] On 24 January 2000, Mr Musker wrote again to the Council. He recorded his view that it was "high time for the Council to push the Government to proceed". He noted that there had in fact been a change of government and a significant change in the Council's own membership. He expressed his opinions that local Mäori would have little objection to the freeholding of the land and that the matter had been "on hold for far too long". [45] The Mayor replied to Mr Musker on 25 January 2000. Her letter read as follows:WAITARA LEASES/FREEHOLDING Thank you for your letter dated 26[sic] January 2000 regarding the freeholding of the lease land in Waitara. I note your points made in the letter, but Council, after discussions with the former Minister, Mr Doug Graham, was advised not to move on the freeholding until the land issues with Iwi, were much clearer. Should the Te Atiawa discussions be resolved with the new Minister, then we can move quickly because a Bill is already in the house awaiting Parliament's consideration. It has not reached the House because of Minister Graham's request. Council accepts the delicacy of the situation. I am sure, with a new Government, we would wish to meet with the new Minister prior to the Bill going to the House. We have a commitment to freeholding the leases, Mr Musker, but we have to wait until the land issues are further advanced.[46] Mr Sampson retired as the Council's General Manager in late 2000. He was replaced by Mr Kerr-Newell, who has also sworn an affidavit in the present proceeding. Essentially, his affidavit took up the story from the point of the next triennial general election in October 2001. As a result of that election, the Council had a new Mayor, and there were seven new councillors. [47] 2002 saw the enactment of a substantial reform in the area of local government with the passage of the Local Government Act 2002. That Act wrought significant change with respect to the purposes of local government and the procedures that Councils are required to undergo with respect to planning, decision- making and accountability. It was now expressly stated, by s 10 of that Act, that the purpose of local government is "to enable democratic local decision-making andaction by, and on behalf of, communities" and "to promote the social, economic, environmental, and cultural well-being of communities, in the present and for the future". [48] In the course of developing the long-term strategic plan required by the Act the Council received written submissions dealing with the issue of the Waitara leasehold land. Mr Kerr-Newell referred also to submissions from tangata whenua to the effect that the Council owned land that had been stolen from them. [49] Having considered the submissions received on the long-term strategic plan, the Council resolved on 29 and 30 May 2002 to give consideration to the issue of the Waitara leasehold land as a separate issue. The Chief Executive was instructed to provide a report to the Council on the subject. Because it intended to re-examine the issue, the Council also resolved, on 20 August 2002, to ask the government to put the New Plymouth District Council (Land Vesting) Bill on hold until the Council had reconsidered the matter of the leases, and made a decision. [50] The Chief Executive commissioned a report from a historian on the history of the land as well as the recent concerns and issues that had been raised concerning it. It was envisaged that the report would serve as a discussion document to facilitate consultation in the community. [51] The Council received the report on 12 November 2002. It then commenced a formal consultation process with iwi and hapu, with the leaseholders, the Waitara community and the wider community of the whole Council. It resolved to follow a decision-making process involving public consultation and submission, analogous to the special consultative procedure under the Local Government Act, with hearings to be held in February 2003. At the outset of that process, it issued a news release which was in the following terms:NEWS RELEASE Council Takes Steps to Resolve Waitara Land Issue The New Plymouth District Council is taking steps to resolve a land issue of national significance.Tonight (TUESDAY NOVEMBER 12) the council accepted a draft report on the background of, and the current issues and possible future action in regard to, council-owned land in Waitara. The Crown's attempt in 1860 to purchase a large portion of what is modern- day Waitara sparked the New Zealand Wars – and its repercussions are felt today with iwi, leaseholders, Waitara residents and the council wanting a resolution. "For too long the Government has let this issue drag on," says Mayor Peter Tennent. "This council has had enough of the dithering – we will be making a binding decision after consultation in the New Year! "This draft report is a significant step toward finding a solution in regard to the Waitara endowment land." Mayor Pete says the current situation is helping no one; with some leaseholders wanting to buy the unimproved value of their land but unable to, and with iwi and hapu wanting the land returned to them. "But tonight the council has accepted the detailed draft report which is designed to clarify the issues and stimulate discussion and public consultation. "From here the council will consult with iwi and hapu, leaseholders and the Waitara community, with a final report including public feedback returning to the council for its consideration next year. "Waitara is significant to this district and to this country. It will benefit everyone to have this issue resolved in the best way possible," says the Mayor.[52] In addition, the Council wrote to all of the leaseholders on 13 November 2002, advising them of the process that would be followed. It was Mr Kerr-Newell's evidence that down to the closing date for submissions, which was 10 February 2003, the Council gave out more than 1,000 copies of the report that had been prepared. 357 submissions were received, including submissions from Mr Musker, Mr Campbell, Mr Martin, Mr Smith, Christine Armstrong-Smith and Rex Armstrong, all of whom are plaintiffs in the test case proceedings. In his submission, Mr Musker remarked:I have been hoping to freehold since 1992, when the appropriate legislation was presented to Parliament, but which has been on-hold ever since. Over this period I have made numerous submissions too, and been in contact with, the Council, Councillors and Mayor. With Government expediency and interference, and a dilatory Council, a decision on freeholding has been deferred for far too long, and whatever the final outcome, I commend the Council for at last getting on with it.[53] Submitters were heard by the full Council at the Waitara War Memorial Hall and at Owae Marae on 27 and 28 February 2003. After the hearing had concluded, the Council's Corporate Policy and Planning Unit reported to the Council recommending a further process to enable a decision to be made on the ownership of the Waitara land. The Unit recommended that Council officers prepare a further report addressing issues that had been raised by councillors following the hearing. It was recommended that the report, when prepared, be discussed at a Council workshop, with another hearing held on 3 July 2003 to obtain further input from the public. The public was to be encouraged to make submissions at the hearing. [54] It was envisaged that the Council would make a preliminary decision at a meeting on 12 August 2003 and there would then be a further submission and consultation process on that preliminary decision. That would conclude with a further round of hearings in mid-October 2003, all before the Council made its final decision. [55] That process was followed. The issues that had been raised by councillors following the February hearings were the subject of a report entitled "Waitara Endowment Supplementary Report" which was made available to the public. The public was then advised of the further consultation processes that the Council would be following and further hearings were conducted in July 2003. Mr Murray Arms and Mr Rex Armstrong made submissions at that time. [56] A further report was prepared including a recommendation for the Council's preliminary decision. That report essentially left the Council with three options, namely: a) to return the land to tangata whenua holding mana whenua over the land; b) to allow leaseholders to freehold the Council's land; or c) to retain the status quo.[57] The report, called "Waitara Land Preliminary Decision" was considered by the Council at its meeting on 12 August 2003. Mr Kerr-Newell deposed that there was a considerable public presence at the meeting, with large deputations from both tangata whenua and the leaseholders. After considering the report, the Council's preliminary decision was to:Facilitate the opportunity for the return of the Council's leasehold land consisting of former Waitara Borough and Waitara Harbour Board land, excluding parks and reserves and taking into account the legitimacy and continuity of existing leases, to tangata whenua with mana whenua over those lands.[58] The further submission process that had been envisaged at that point was then carried out. A large number of submissions were received including submissions from plaintiffs in the test case proceedings. Mr Murray Arms probably spoke for many of the leaseholders when he stated in his submission that:For many years (probably about 30 years to the best of my recall) at various times, Waitara leaseholders have had letters from Council, indicating that action would be taken at some time to sort out the issue, and probably give a freeholding option to existing leaseholders.[59] In the course of his submission, Mr Arms referred to the letters dated January 1994 and 27 February 1997 that had been sent out to the leaseholders by the previous Mayor, and have been set out above. [60] In his submission, Mr Rex Armstrong observed:Over the years Council has made it well known of their intention to allow and make available the opportunity for freeholding lease land sections. Whilst I understand that no Council can necessarily commit future Councils to any definite action, I do feel that in this instance Council of this day should honour the actions of the 1992-95 Council decision which was passed on to Government (Doug Graham) who for some reason unknown decided to ignore the wishes of all parties.[61] In December 2003, the Council issued a further document "Waitara Land Proposal", as part of the submission and consultation process. The full Council then held hearings on 10, 11 and 12 March 2004. One of the submissions presented at those hearings was that of the Waitara Leaseholders' Association.[62] Following those hearings, the final report was submitted to the Council. The report advised that the Council essentially had four options, namely: a) transferring the land to the Crown with contingent protection for leaseholders and tangata whenua. b) transferring the land directly to tangata whenua with the authority of special legislation. c) selling the freehold of the land to existing leaseholders; or d) retention of the status quo. [63] The report recommended option (a). [64] These various options were considered by the Council at its meeting on 30 March 2004. It is Mr Kerr-Newell's evidence that over 200 people were present, again with representation of both tangata whenua and the leaseholders. All of the councillors spoke to the report and its recommendations. [65] The Council resolved to proceed in accordance with the first of the options set out above, i.e. to transfer the land to the Crown, with contingent protection for leaseholders and tangata whenua. [66] The full text of the Council's resolution was as follows:That having considered all matters raised in the report and all options for the future ownership of the Waitara lands and with regard to the preliminary decision: The Council: 1. Notes that the major considerations of its decision are, to achieve a comprehensive solution to a issue that has caused a long standing social disharmony within our community by;• Achieving fiscal neutrality, by being financially prudent and acting in a commercially sound manner;• Promoting social, economic, environmental and cultural well-being of the district;• Promoting community outcomes, of Quality of Life, Iwi Relationships, Environment, Youth, and District Growth, and in particular, the interests of tangata whenua, the Waitara community, and the current rights of leaseholders; and• To release the land from legislative constraints. 2. Resolves that the option presented in the report that best fulfils the considerations outlined in (1.) above is Option A – Transfer to the Crown with contingent protection for leaseholders and tangata whenua. 3. Resolves that the land be offered to the Crown, on the following terms: a) That the land be included in the Crown's offer to settle Te Atiawa's historical claims; b) That the Council receive a fair market value for the land; c) That the rights of leaseholders under existing leases are preserved; d) That setlement legislation provides for the land to vest free of all statutory trusts, restrictions and other reservations; e) That transfer of the land only occur once the settlement legislation has been passed and the Council would continue to own the land and administer existing leases; 4. That the Council: i) Advocates for the significance of the land to be recognised by the Crown and be in addition to any negotiated settlement. ii) In the interim, advocates for the Crown and Te Atiawa mandated negotiators to deal with interested leaseholders and consider freeholding after settlement. 5. Resolves that the Chief Executive be delegated the authority to negotiate the terms of an agreement with the Crown, for approval by the Council. 6. That the New Plymouth District Council (Land Vesting) Bill be withdrawn. NOTE 1: The Council's expectation is that disposal of the Waitara Land to the Crown will facilitate the completion of the settlement process and enhance the ultimate settlement. NOTE 2: For the purposes of these recommendations, "land" means the land in Waitara that the Council wishes to dispose of [as contained in Appendix Four], and specifically excludes reserves and other land which is currently used for community purposes and which the Council wishes to retain.[67] In view of the resolution that had been passed, Mr Kerr-Newell wrote to the Speaker of the House of Representatives on 21 April 2004. In his letter, he noted that there had been various extensions of the reporting dates on the Bill, the last of which was to expire on 30 April 2004. He advised that the Council had completed its review, and resolved that the land be offered to the Crown for inclusion in the Crown's offer to settle Te Atiawa's historical Treaty of Waitangi claims. He asked the Speaker to arrange for the Bill to be withdrawn. [68] The Mayor also wrote to the Minister in Charge of Treaty of Waitangi Negotiations advising her of the Council's decision. In a letter dated 6 May 2004 she replied, indicating that the Cabinet had agreed that the Crown will enter into a conditional sale and purchase agreement with the Council in respect of the subject land, subject to a number of conditions. Pursuant to those conditions, the Council will continue to own and manage the lands until an unconditional settlement is reached with Te Atiawa; Te Atiawa must agree to include the Waitara lands as part of their settlement package; the Te Atiawa Settlement Legislation is to be passed within five years of the conditional sale and purchase agreement being entered into; the Crown, Te Atiawa and the Council will agree to a fair market price for the lands; the existing rights of leaseholders are to be protected. [69] Mr Kerr-Newell deposes that, in the meantime, negotiations with the Crown as to the details of the possible sale to it of the Waitara leasehold land have been stalled until the legal actions concerning the various issues have been resolved. No further progress has been made over recent years. [70] The litigation has not been confined to the present proceedings in which the leaseholders now sue the Council under the Fair Trading Act, in promissory estoppel and in negligence. In an earlier proceeding commenced in this Court, the Waitara Leaseholders' Association Incorporated attacked the Council's resolution of 30 March 2004 alleging that the decision to offer to sell the land to the Crown was unlawful, and that the decision had been made in breach of the Council's duties as a trustee. The Association succeeded before Harrison J: in a judgment delivered on 4 November 2005 he declared that the Council's decision was unlawful. However, that judgment was subsequently overturned by the Court of Appeal (New PlymouthDistrict Council v Waitara Leaseholders' Association Inc [2007] NZCA 80, 20 March 2007), during the hearing of the present matter. On 20 June 2007, the Supreme Court dismissed the Association's application for leave to appeal from the decision of the Court of Appeal.Approach to defendant's applications[71] As has been noted, in the case of each of the six test cases the defendant has made an application for summary judgment in its favour or as an alternative seeks an order striking out each of the pleaded causes of action. [72] Rule 136(2) of the High Court Rules provides for applications for summary judgment in the following terms:136 Judgment where there is no defence or where no cause of action can succeed(1) The Court may give judgment against a defendant if the plaintiff satisfies the Court that the defendant has no defence to a claim in the statement of claim or to a particular part of any such claim. (2) The Court may give judgment against a plaintiff if the defendant satisfies the Court that none of the causes of action in the plaintiff's statement of claim can succeed.[73] As can be seen, there is a distinction to be drawn between applications by plaintiffs and defendants. Summary judgment may be given on a plaintiff's application in respect of parts of a claim. In order for there to be summary judgment against a defendant, however, the Court must be satisfied that none of the causes of action in the plaintiff's statement of claim can succeed. [74] In Westpac Banking Corporation v M M Kembla New Zealand Ltd [2001] 2 NZLR 298 the Court of Appeal set out relevant principles which it held applicable in the case of defendants' applications for summary judgment. Mr Hassall drew my attention to the passages in the judgment which explain the difference between an application to strike out and an application for summary judgment. At [60] the Court notes that a strike out will usually be determined on the pleadings alone whereas summary judgment applications require evidence. Further, a summary judgment willoperate as an issue estoppel between the parties; whereas if a pleading is struck out as untenable as a matter of law the plaintiff is not precluded from bringing a further properly constituted claim. The Court notes that where a claim is untenable on the pleadings as a matter of law, it will not usually be necessary to have recourse to the summary judgment procedure because the defendant can apply to strike out the claim under r 186. [75] Rule 186 provides that without prejudice to the inherent jurisdiction of the Court the pleading may be struck out in whole or in part where it: a) discloses no reasonable cause of action or defence; or b) is likely to cause prejudice, embarrassment or delay; or c) is otherwise an abuse of process. [76] Consistent with its observations in [60] the Court of Appeal went on to note that summary judgment for a defendant will usually be given where the defendant can offer evidence which is a complete defence to the plaintiff's claim. Further, it held (at [62]) that applications for summary judgment will be inappropriate where there are disputed issues of material fact or where material facts need to be ascertained by the Court and cannot confidently be concluded from affidavits. Further, such a judgment may also be inappropriate where the ultimate determination "turns on a judgment only able to be properly arrived at after a full hearing of the evidence". [77] I note however, that the Court also observed at [62] that:Summary judgment is suitable for cases where abbreviated procedure and affidavit evidence will sufficiently expose the facts and the legal issues.[78] Mr Hassall also referred to the Court's observations at [63] that it will not be appropriate to decide by summary procedure the sufficiency of the proof of the plaintiff's claim.[79] He contended that in the present case there are relevant disputed issues of material fact involved which ought properly to be ascertained by the Court at trial and cannot confidently be concluded from the affidavits that have been filed. The issues to which he referred are whether the "promises" of the defendant created a reasonable belief in the plaintiffs that they would be given the right or option to freehold their property, whether the "promise" implied that the defendant would not change its mind on the freeholding policy, whether and to what extent the plaintiffs relied upon the Council's conduct and if so, whether they did so reasonably, whether the plaintiffs suffered detriment as a result of their reliance, whether it was unconscionable for the defendant to reverse its freeholding policy and a range of issues arising in respect of the negligence claim concerning the existence of a duty of care and its breach. [80] I agree that these are all issues that would arise if the present proceeding went to trial. However, in this case, the basis of the plaintiffs' claim is clearly pleaded and it has also been the subject of an amended set of pleadings in the circumstances that have previously been set out. There was no suggestion subsequent to the filing of the amended statements of claim that there existed other possible formulations of the claim which could be the subject of further amended pleadings, or that any important fact had not been pleaded. It is relevant in the circumstances to note also what was said by the Court of Appeal in Johnson v Watson [2003] 1 NZLR 626 at [31]:Facing, as they were, an application to strike out and for summary judgment against them, it behoved the Johnsons to put up their best pleaded case. On the face of their third amended statement of claim there is no pleading which would allow the Court to say that the Johnsons have a reasonably arguable case that Mr Watson's representations caused them to go out of time for suing the architects. The earlier pleadings do not provide any better foundation, largely as a result of their lack of specificity. No further amended pleading was tendered in this respect. We are of the view that on the premise that the Johnsons have put up their best case on this front, it is so speculative that it is appropriate to say that it cannot possibly succeed.[81] In essence, all three causes of action upon which the plaintiffs rely depend on identified statements made by the Council as well as its original adoption of the freeholding policy and the steps taken subsequently to abandon it. The key factual issues upon which the plaintiffs' claim rests are not in dispute albeit that there may be issues concerning inferences able to be drawn from the primary facts about issuessuch as reliance. Whether or not, in terms of r 136(2) the causes of action pleaded in the statement of claim can succeed can be examined on the basis that the matters of primary fact that they assert are correct. It is the defendant's position that the claims cannot succeed on that basis. [82] In these circumstances, possibly unusual, I consider that it is appropriate to deal with the application for summary judgment on its merits. However, if that approach is not correct, then the position is equally susceptible to analysis under the application to strike out. In that respect there was no dispute as to the required approach which is adequately summarised for present purposes by what was said by the Court of Appeal in Attorney-General v Prince and Gardner [1998] 1 NZLR 262 at 267. In summary, the strike out application must be dealt with on the assumption that the facts pleaded in the statement of claim are true. Before the Court can strike out proceedings the causes of action must be so clearly untenable that they cannot possibly succeed. The jurisdiction must be exercised sparingly, and only in a clear case where the Court is satisfied it has the requisite material. However, the fact that applications to strike out raise difficult questions of law and require extensive argument will not prevent the Court striking out the claim in a proper case. [83] Mr Hassall contended that the causes of action pleaded in the present case are not so clearly untenable that they cannot possibly succeed. At the hearing in March 2007 he also raised a particular issue about the inability of a defendant to succeed on a strike out application on the basis that no reasonable cause of action is disclosed when the real issue raised by the defendant is an argument based on limitation. The defendant at that stage had not sought to strike out the claims on the basis that they were frivolous and vexatious, the course that needs to be followed where a limitation point is to be pursued. However, that omission had been rectified by the time of the resumed hearing in June and where necessary for its argument based on statutory limitations the defendant relied on both r 186(a) and r 186(c). [84] Mr Goddard argued for the defendant that this was an appropriate case for the Court to act so as to strike out the pleading as a whole under r 186, if the Court was not prepared to grant summary judgment to the defendant. The rival arguments can now be examined in the context of the plaintiffs' allegations.Fair Trading Act claims[85] In their Fair Trading Act claims as amended, the plaintiffs in the six test cases all allege that the Council was, at material times, in trade for the purposes of s 9 of the Act. They each assert that the defendant promised them that they would be given the right or option to freehold the land which they occupied. Alternatively, it is claimed that the defendant created a reasonable belief on their part that they would be given the right or option to freehold the land. [86] Those claims are based on a number of particulars. The plaintiffs rely first on the making and publication of the Council's resolution of 11 December 1989. Second, reference is made to the initiation by the Council of the Bill which was still before Parliament down to 12 August 2003 when the Council resolved to facilitate the opportunity for the return of the land to tangata whenua. Then, reference is made to the letter written by the then Mayor, Ms Stewart dated 4 December 1992 and addressed to Mr Musker. The text of that letter has earlier been set out; it advised Mr Musker, amongst other things that "the leaseholder's right to freehold would be respected, whatever the outcomes of ownership". [87] In addition, the plaintiffs relied on the circular letter sent out by the Mayor in January 1994 and the further circular from the Mayor dated 27 February 1997. In the case of the January 1994 circular, the plaintiffs rely on the Council's stated approach as being to ensure that "any leaseholder who wished to freehold his or her land should be allowed to do so". In the February 1997 letter, reliance was placed on the comment that the Council's commitment to the Waitara leaseholders had not changed and that it was "still committed to the Bill which if enacted will enable the freeholding of the lessees[sic]". Then, the plaintiffs rely on another letter written by the Mayor to Mr Musker on 25 January 2000. That letter reiterated the Council's "commitment to freeholding the leases". [88] The plaintiffs M A Smith and C Armstrong-Smith referred to "representations" made "on multiple occasions" by one Rex Armstrong, a councillor of the defendant to the effect that the plaintiffs would "be able to purchase their property freehold within 12 months to two years". Councillor Armstrong wasMs Armstrong-Smith's father, and allegedly made the representations both before and after those plaintiffs purchased the lease of the property concerned in 1993. [89] Mr Smith and Ms Armstrong-Smith also relied on an allegation that another councillor, one Clive Pryme told them "around about 1996/1997" and subsequently, down to 2002, that they would be able to purchase the freehold of the property that they occupied. [90] The Arms, as trustees of the Peak Trust, also rely on a discussion between Mr Murray Arms and councillor Pryme that the Waitara ground leases would be "sorted out", a remark that Mr Arms says he understood as an affirmation that freeholding would eventually be allowed. [91] The statements of claim all allege that the Council repudiated its promise and the creation of the said belief, by reversal of its freeholding policy for the land. In that respect, the plaintiffs rely first on the Council's resolution of 12 August 2003, and the procedure that was subsequently followed down to the meeting of 30 March 2004. Paragraphs 8 and 9 of the statements of claim then allege misleading conduct on behalf of the defendant in terms which are almost identical. The statement of claim in the proceedings commenced by the Arms (on behalf of the Peak Trust), Mr Smith and Ms Armstrong-Smith and CM and JM Donald are in the same terms. In each case the pleading reads as follows:MISLEADING CONDUCT 8. THE conduct of the defendant by way of making the said promise and/or creating the said belief in the Plaintiffs and other Leaseholders taken together with the subsequent repudiation thereof by the reversal of its freehold policy was conduct which was misleading or deceptive or likely to mislead or deceive in terms of Section 9 of the Fair Trading Act. 9. FURTHER the conduct of the Defendant by way of making the said promise and/or creating the said belief in the Plaintiffs and other Waitara Leaseholders was conduct which was misleading or deceptive or likely to mislead or deceive in that: 9.1 The repetition of the said promise and/or creation of a reasonable belief over several years was such as to require the qualification that it was subject to some future Council of the Defendant being free to reverse its freeholding policy but no such qualification was provided.9.2 The specific wording of the said promise and the said belief implied that the Plaintiffs could safely rely upon the said promise and the said belief and govern their affairs accordingly but no warning against such implication was provided. 9.3 The Defendant continued to repeat the said promise and create the said belief beyond April 1995 notwithstanding that the Defendant knew by then that: 9.3.1 There was no certainty that the New Plymouth District Council (Land Vesting) Bill would be passed into law; 9.3.2 The Minister of Justice advised against a decision to sell the leasehold properties which he said would exacerbate the current situation and could seriously harm the prospects of a satisfactory solution of the issue. 9.4 The Defendant failed to inform the Plaintiffs subsequent to February 2000 that the Plaintiffs could not safely rely upon the said promise and belief because the Defendant might decide to reverse its policy. 9.5 The Defendant knew that the Plaintiffs as lay persons having no experience or expertise in Local Government affairs might assume the wording of the said promise and creation of the said belief was such as to involve a binding commitment and the Defendant ought to have taken steps to correct such assumption. 9.6 It was within the Defendant's power or reasonable capacity at all material times to allow or procure a right or option to freehold the land. 9.6.1 Under Section 230 of the Local Government Act 1975 prior to 1 July 2003; 9.6.2 Under Section 140 and 141 of the Local Government Act 2002 from 1 July 2003 onwards.[92] The statements of claim filed by DM and OI Musker, SF and WF Martin and RE Campbell are in the same terms, except that at paragraph 9.4, the pleading refers to April 1995, instead of February 2000. I was not referred to any significance of that difference, and I do not think there is any for present purposes. [93] The statements of claim allege that the plaintiffs relied on the promise made or the reasonable belief induced by the Council in various ways. Paragraphs 11 and 12 allege respectively detriment and loss.Defendant's argument[94] Mr Goddard argued that the plaintiffs' Fair Trading Act claims faced four insuperable difficulties. [95] First, he submitted that none of the defendant's conduct, on which the plaintiffs rely, was in fact misleading or deceptive. Essentially, this was because the statements made by the Council and/or the Mayors from time to time about the Council's policy as to the freeholding of the properties, in fact accurately described the policy at the time the statements were made. The policy had subsequently changed so that, following the resolutions of 30 March 2004, the Council would no longer act in accordance with its previous policy. However, he submitted that a statement can only be false and misleading insofar as it conveys, when it is made, information about a stated fact that is not then correct. Further, he argued that a statement that a person intends to act in a particular way in the future, or even a promise made to do so, is not false or misleading merely because the person does not subsequently act in that way. [96] Mr Goddard argued that it was wrong for the plaintiffs to rely on the absence of a disclaimer to the effect that the Council's policy might change, or a warning that the Council might not act in accordance with the promise in the future. There was no suggestion at any stage that the Council's statements were not genuinely made, and that when they were made the Council intended to proceed with the freeholding policy. The absence of a disclaimer or warning that the policy might change in the future did not mean that the statement or promise was misleading when made. Mr Goddard submitted that unless the Council knew at the time of the statement that there was a real prospect that it would change its mind, even a statement that it would not do so (had it been made) would not be misleading. Consequently, the plaintiffs' claim that they were led to believe that the Council would not change its mind, even if it were able to be sustained, would not mean that the Council had acted in a misleading way. [97] Mr Goddard submitted that these propositions, applicable to the statements of individuals, should be applied with even more force in the case of a democraticallyelected body such as the defendant, with a membership which changes over time. He contended that no reasonable person would assume that govermental bodies such as the defendant, having announced a policy, would never thereafter review or alter it. For this submission, he relied in part on AMP Finance v Heaven (1997) 8 TCLR 144. In that case, Tipping J delivered the decision of the Court of Appeal. At 152 he observed:We consider the question of whether there was a breach by AMP of s 9 should be addressed in three steps. The first step, which focuses on the conduct in question, is to ask whether that conduct was capable of being misleading. The second step is to consider whether the Heavens were in fact misled by the relevant conduct. This step focuses on the effect of the relevant conduct on the Heavens' minds. The third step requires consideration of whether it was, in all the circumstances, reasonable for the Heavens to have been misled. This is where, as with the first step, the objective dimension comes in. It is not enough for the Heavens to show that they were misled if reasonable people in their shoes would not have been misled. (Emphasis added.)[98] Another aspect of Mr Goddard's argument on this part of the case was to emphasise that the Council had not in fact made at any stage an unqualified promise that freeholding would be permitted within any particular timeframe. Thus, the circulars in 1994 and 1997 had both expressly linked freeholding to the passage of the Bill. That never occurred, and for most of the relevant period to which the plaintiffs' claims relate passage of the Bill was in fact problematic because of the stance adopted by the Government. Mr Goddard stressed the absence of any evidence which could reasonably be regarded as an absolute and unequivocal promise that leaseholders would be able to freehold their properties by a date that has now passed. [99] He argued that the Council could not be liable for statements made by individual councillors, although conceding for present purposes that statements made by the Mayor from time to time could properly be regarded as effectively binding on the Council. The statements made by individual councillors could not be regarded as having the authority of the Council itself, especially where, as in the case of the Peak Trust and Smith statements of claim, the statements were allegedly made in family or social settings.[100] The second fundamental difficulty with the plaintiffs' Fair Trading Act claims urged by Mr Goddard was that the plaintiffs could assert no recoverable loss or damage. In that respect, he maintained that any claim for damages under the Fair Trading Act must involve loss or damage in the sense of reliance loss. For that submission he relied on the decisions of the Court of Appeal in Cox & Coxon v Leipst [1992] 2 NZLR 15 and Harvey Corporation v Baker [2002] 2 NZLR 213. In the latter, Blanchard J referred, at [13] to the majority opinion in the former in the following passage:The majority opinion, which now has the apparent endorsement of the High Court of Australia (in Henville v Walker (2001) 75 ALJR 1410 at para [132]), was that a representation cannot give rise to a claim for a lost benefit or a loss of expectation where the defendant is under no obligation to perform the representation. Section 43 is directed against the making of a false representation, as opposed to the failure to perform it. Gault J has pointed out in Cox & Coxon at p 22 that: " loss of bargain or of expected future returns flows not from the conduct that is wrongful, but from the failure to implement a promise. Where no contract exists between the person who engaged in the conduct and the person who suffered the loss, there is no promise which failure to implement deprives the other party of expected benefits. Section 9 of the Act prohibits conduct, it does not render representations binding."[101] On this basis, Mr Goddard submitted that it is necessary to focus on the nature of what is prohibited by the Fair Trading Act. Supposing the Council had included in all its public statements a disclaimer or qualification that the announced freeholding policy was subject to change by a future Council: in those circumstances, the misleading conduct alleged by the plaintiffs would not have occurred. Yet they would still not have had the benefit of a freehold title, or of any additional gains that they might have achieved as a consequence of obtaining such a title. This analysis showed that the loss claimed was not loss or damage suffered as a result of being misled in the manner alleged. In effect, the plaintiffs were asserting a right to recover their expectation loss, as if the Council had breached a contractual obligation to them. [102] As to the alleged detriment suffered the plaintiffs complain that they have, in each case, spent substantial sums of money in renovating the properties that theyoccupy, in reliance on the Council's freeholding policy. They claim that the value of their leasehold interest has increased in value by a lesser percentage than the percentage increase in value of equivalent freehold properties in Waitara since 12 August 2003; that the value of their leasehold interest in the land has increased to a lesser amount than it would have in the absence of Council's misleading and/or deceptive conduct; that they have lost an opportunity to freehold the land, thereby depriving them of the increase in value of their interest in the land that has occurred since the time freeholding ought to have been allowed (on or before 12 August 2003); that they have suffered the loss of the opportunity of using the money spent on renovations for other purposes, including a deposit on the purchase of a freehold property and also that, had they known at an earlier stage that they would not be able to freehold the properties that they presently occupy, they could have bought an equivalent freehold property at a much lower net cost than they could now achieve. Mr Goddard conceded that a loss of opportunity could be a relevant reliance loss recoverable under the Fair Trading Act. However, he pointed out that the plaintiffs had not been able to identify a specific transaction or purchase that they had in fact foregone as a result of the Council's conduct. In substance, he maintaned that notwithstanding amendment of the pleadings to allege loss of opportunity, the plaintiffs were essentially still seeking to be compensated for an expectation loss, a loss which they are not entitled to claim under the Fair Trading Act. [103] It is to be noted in this context, however, that the allegations now pleaded by the plaintiffs are on the face of it sufficient to prevent the strike out application succeeding on the basis that no reliance loss had been alleged. Mr Goddard, however, submitted that insofar as the defendant has also sought summary judgment, the absence of any evidence in the affidavits filed by the plaintiffs referring to particular transactions foregone meant that the defendant was entitled to summary judgment on this ground. [104] Here, Mr Goddard relied on the observations in Johnson v Watson [2003] 1 NZLR 626 (CA), to which I have already referred. It is not just the pleading that Mr Goddard relied on, which referred to lost opportunities without any specificity, but also the absence of any evidence in the affidavits filed by the plaintiffs about actual lost opportunities.[105] The third fundamental flaw identified by Mr Goddard is that the claims are time-barred. I reiterate here that the claims were originally commenced on various dates between 20 and 28 July 2006. Mr Goddard pointed out that under s 43(5) of the Fair Trading Act, as it stood prior to 3 May 2001, an application to the Court under s 43(1) had to be made at any time within three years from the time when the matter giving rise to the application occurred. That rule was altered from 3 May 2001 by the Fair Trading Amendment Act 2001, but nothing in the Amendment Act was to have the effect of enabling any proceedings to be brought which were barred before the commencement of the amendment (Fair Trading Amendment Act 2001, s 4(a)). [106] While this rule applied, any invocation of the Court's powers under s 43(1) of the Act would have had to be based on events occurring within the 3 years immediately prior to 2 May 2001, even if the proceeding had then been commenced. Mr Goddard pointed out that all of the alleged public announcements and communications to leaseholders from the Council concerning the freeholding policy took place in or before 1997. Insofar as the plaintiffs rely on conduct occurring after 1997, informal statements by individual councillors could not avail them, for reasons already addressed. The Mayor's letter to Mr Musker in January 2000 would be the only conduct that might conceivably be regarded as conduct of the Council which was not statute barred under s 43(5) as it stood prior to 3 May 2001. However, although that letter referred to the Council's commitment to freeholding the leases, it was said then that it was necessary to wait until the land issues were "further advanced" and that was in the context of earlier reference to the position of the Government and the "delicacy of the situation". [107] Nevertheless, supposing the letter to Mr Musker was able to be relied on, and was in fact relied on (a matter not the subject of evidence called in opposition to the defendant's summary judgment application) by the other plaintiffs as well, the new s 43(5) would also stand in the way of a successful claim. Under its provisions, an application for orders under the section may be made "at any time within 3 years after the date on which the loss or damage, or the likelihood of loss or damage, was discovered or ought reasonably to have been discovered." Mr Goddard maintained that if any loss or damage might be said to have flowed from the failure by theCouncil to freehold the land before August 2003 (a proposition that the defendant rejects in any event) then the likelihood of such damage was apparent and reasonably discoverable at the time the January 2000 letter was sent, since leaseholders had been advised in 1997 that the Bill had encountered difficulties and its passage was outside the control of the Council. Alternatively, at the very latest, it was discoverable from the time that the Council embarked upon the reconsideration of the policy in 2002. As a result, the limitation period would have expired by the time the plaintiffs commenced their proceedings in July 2006. [108] The fourth substantive bar raised by Mr Goddard to the plaintiffs' Fair Trading Act claims was that the Council had not, at the relevant times, been acting in trade. As to this, Mr Goddard argued that the relevant council activities on which the plaintiffs rely concerned policy decisions and communications about policy decisions. Both the original decision made in December 1989 to adopt the freeholding policy and the subsequent decision to alter the policy had "involved broad issues about how endowment lands given to the Council by the Crown, and governed by a specific statutory scheme, should be managed in the wider interests of the community". The decisions made had been "very much political ones, made by the Council itself rather than by its officers, attended by considerable public interest and submissions". [109] Mr Goddard submitted that even though the Council was the lessor of the properties, its decisions concerning the properties had not been made as a lessor. Rather, they were made in the Council's capacity as a public body. As such, the decisions were not made in trade. The issue is, of course, important because s 9 of the Fair Trading Act only prohibits persons engaging "in trade" in conduct that is misleading or deceptive or likely to be so. Further, there is a definition of "trade" in the Act which provides that the word means:any trade, business, industry, profession, occupation, activity of commerce, or undertaking relating to the supply or acquisition of goods or services or to the disposition or acquisition of any interest in land.[110] Mr Goddard pointed out that the words "in trade" used in s 9 were intended to limit the application of the section. He contended that the decisions made by the Council in this case were not commercial decisions relating to its activities in tradeas a landlord. Rather, they were decisions about the broader welfare and interests of the community. He contended that, in making such decisions, and acting in accordance with the democratic and Council consultative process, the Council could not properly be described as "engaged in trade". Similarly, when communicating with the public about those issues and decisions, the communications were not communications made "in trade". He argued that the very fact that most of the conduct relied on by the plaintiff consisted of formal Council resolutions and public communications from the Mayor underlined the high policy level and political nature of the actions impugned. In no sense could they be described as "operational" communications about the administration of leases.Plaintiffs' argument[111] Mr Hassall, for the plaintiffs, rejected Mr Goddard's contentions that the amended claims were fundamentally defective. [112] As to the defendant's submission that the statements made by the Council about its policies were all true at the time they were made, Mr Hassall maintained that under the Fair Trading Act the primary focus is on conduct, not statements. He submitted that, in any event, a statement although true can be misleading, and that a statement can become misleading or likely to mislead retrospectively, if repeated sufficiently often and persuasively. [113] Mr Hassall accepted Mr Goddard's argument that it is not misleading for a democratically elected body to fail to say expressly, each time it announces a policy, that one day the policy might change. However, the plaintiffs rely on the announcement of the policy in 1989, and subsequent assurances given that the policy was effectively "set in stone" given at a time when the defendant knew full well that the freeholding policy might not be able to be implemented (I quote here from Mr Hassell: no document or statement referable to the Council used the expression "set in stone".) Having been led to believe that the policy was firm, the plaintiffs were entitled to go about their affairs on the basis that they would eventually be able to freehold their properties.[114] Mr Hassall summarised the contentions of the plaintiffs as being that the conduct of the defendant over a period of time had been misleading or such as was likely to mislead the plaintiffs into believing that they could rely on the freeholding policy remaining in force. Particular aspects of the conduct of the defendant which had that result were said to be: a) making a promise to freehold and then repudiating that promise; b) repetition of statements over a period of time such that qualification was required; c) the wording of the policies implied that the defendant would not repudiate the promises; d) repeating the promises beyond April 1995, by which date the defendant knew there was uncertainty about its ability to implement its promise; e) failing to provide information that the defendant might reverse its policy post April 1995 and February 2000; and f) failing to correct the assumptions or belief that the plaintiffs, as lay people, would inevitably have that they could rely on the promise. [115] Mr Hassall argued that whether a promise to act in a particular way in the future is false or misleading or likely to mislead or deceive must depend on the wording of the promise. If it is so worded as to be likely to mislead lay people into believing that it was a promise which the defendant could and would carry out, then it amounted to conduct which was misleading or likely to mislead if not in fact carried out. He contended that on the facts of this case, the promises made in various ways by the defendant did in fact mislead the plaintiffs and other leaseholders into believing that they could safely rely on the freeholding policy being carried out and govern their affairs accordingly. Mr Hassall argued that statements made by individual councillors were made ostensibly on behalf of the defendant and with itsauthority, adding to a kind of "grape-vine effect". In this respect, he referred to the affidavit that had been filed by Mr Arms (sworn on 10 May 2007) which included the following, at paragraph 8:During the nineteen-eighties and the nineteen-nineties, Mayors of the Waitara Borough and then of the new District Councils were in the habit of visiting Waitara businesses from time to time. When Mayors visited Murray Arms Real Estate, we would always ask them: "When will the Council allow the owners of Waitara leaseholds to purchase the freehold?" On each occasion the Mayors would reply with words to the effect: "We are working on that issue and given time the freeholding option will be available."[116] Mr Hassall submitted that such conduct by the defendants through its Mayor made it likely that the plaintiffs and other leaseholders would be misled into believing that the freeholding policy would be maintained in effect, and that they could rely on that. He submitted that Mayors had some duty to correct the erroneous view they had encouraged by their statements. He did not emphasise the statements allegedly made by individual councillors. [117] Mr Hassall also submitted that even though the Council may have believed in the truth of the statements made, the statements and/or the Council's conduct might nevertheless be misleading. Thus it was no answer for the Council to claim that because the statements correctly reflected its intentions at the time they were made, they could not be misleading. In this context he referred to the decision of the High Court of Australia in Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Pty Ltd (1998) 140 CLR 216, at 227-228 where Stephen J observed that a statement that is literally true may at the same time be misleading and deceptive. [118] I mention here that one of the amendments made to the statement of claim between the March and June hearing dates had been to add the allegation appearing as paragraph 8 in each case. I have set that paragraph out earlier in this judgment. The essence of the pleading was to assert misleading or deceptive conduct consisting of both the promise and its subsequent repudiation. Accordingly, Mr Hassall argued that the misleading or deceptive conduct was the combination of the promise and creation of the belief in the plaintiffs that they would be able to freehold, togetherwith the subsequent change of policy. He argued that it was this combination that constituted the relevant conduct. [119] One of the consequences of this approach, if accepted, would be to overcome the defendant's argument that the Fair Trading Act claims were statute barred, since the misleading conduct continued at least until the Council's resolution of 12 August 2003, effectively the first formal indication that the previous policy would be reversed. As has been seen, s 43(5) of the Act (prior to its amendment from 3 May 2001) required applications for relief under the Act to be made "within 3 years from the time when the matter giving rise to the application occurred". This would have restricted the basis of any claim to events that occurred prior to 3 May 1998. But under the Amendment to the Act, in force from 3 May 2001, an application could be made at any time within three years after the date on which the loss or damage or the likelihood of loss of damage was discovered or ought reasonably to have been discovered. If the misleading or deceptive conduct had not revealed itself until the Council's resolution of 12 August 2003, the effect of the limitation provision would be avoided. [120] As to the defendant's submissions that there have been no unqualified promise by the defendant to permit freeholding within any particular timeframes nor on any particular terms, Mr Hassall argued that the law would apply a reasonable timeframe and reasonable terms. [121] Mr Hassall also emphasised that s 9 of the Fair Trading Act proscribes not only conduct that is misleading or deceptive, but also conduct that is likely tomislead or deceive. Thus statements that might not have been actually misleading could nevertheless be likely to mislead depending on the ability of the leaseholders to correctly understand the effect of the precise wording of what had been said. [122] Referring to the wording of the January 1994 letter of the Mayor he summarised it as having involved a recognition that the individual rights of the people of Waitara occupying and leasing land in the disputed area would be "preserved absolutely", an assurance that the leaseholder who wished to freehold his or her land should be allowed to do so and a commitment by the council to protectthe rights of the Waitara leaseholders. The words used, he contended, would have led lay people to believe that the Council would not repudiate the promise it had made. Recipients of the letter would have been led to believe that the defendant was determined to ensure that the leaseholders would be allowed to freehold. [123] Similarly, with reference to the Mayor's 1997 circular letter, Mr Hassall referred to her observation that "the council's commitment to the Waitara leaseholders has not changed". He submitted that the use of the word "commitment" must have made it likely that the plaintiffs and other recipients of the circular would be misled into believing that the freeholding policy would be maintained and that they could rely upon that being the case. [124] Mr Hassall rejected the defendant's reliance on a distinction between policy and operational decisions on the basis that the conduct and statements on which the plaintiffs seek to rely are not themselves policy decisions but rather, "implementation steps at an operational level" of those policy decisions. [125] As part of his submission on this point, Mr Hassall again argued that even if the statements were not actually misleading, they could be likely to mislead and were in fact likely to mislead, given an inability of the leaseholders to correctly understand the effect of the precise wording that had been used. [126] On the issue of the damage or loss that the plaintiffs had sustained, Mr Hassall submitted that losses claimable in Fair Trading Act claims were not limited to claims for loss sustained as a result of reliance, but could (and should, in a case such as the present) extend to compensate the claimants on the basis of the position in which they would have been had the defendant's representations been true. In other words, the plaintiffs could claim their expectation loss. In this respect, he invited the Court to follow what was said by Tipping J (with whom Richardson P agreed) in Cox & Coxon v Leipst [1999] 2 NZLR 15, at 42: I adhere to the view that the Court may compensate for a false representation under the Fair Trading Act, either by assessing the plaintiff's position had the representation not been made at all, or when appropriate, by requiring the representer to put the representee into the position the representee would have been in had the representation been true.[127] Mr Hassall also contended, however, that the losses claimed were not expectation losses, but losses actually suffered as the result of the plaintiffs being misled into believing that the freeholding policy would be available to them. He further submitted that damages for the loss of the opportunity to freehold could properly be claimed under the Act. [128] As to the defendant's contention that the conduct relied on by the plaintiffs was not conduct "in trade", Mr Hassall responded that the defendant had admitted in its statements of defence that in leasing the land to the plaintiffs it was acting "in trade" within the meaning of s 9 of the Act. He submitted that its role in relation to such properties could not be in trade in some respects, but not in trade in others. He contended in any event that the conduct complained of by the plaintiff was not in relation to the Council's policy setting role, but in relation to what it had done at the operational level.Discussion[129] Section 9 of the Fair Trading Act provides as follows:9. Misleading and deceptive conduct generally – No person shall, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.[130] Leaving aside for the moment the issue of whether the relevant conduct of the defendant was in trade, the plaintiffs must be able to show that the conduct was misleading or deceptive, or likely to mislead or deceive. As has been seen, the conduct of which the plaintiffs complain commenced with the making of the 11 December 1989 resolution. Plainly, there was nothing misleading or deceptive about that resolution, in the absence of any suggestion that the Council had resolved to adopt the policy of permitting the lessees to purchase the freehold of the relevant properties without intending to pursue that course. [131] Thereafter, the plaintiffs rely on the steps taken by the Council to promote and secure introduction of the Bill in 1992. Again, it cannot be said that that conduct was misleading or deceptive. It was simply a logical step towards implementation ofthe freeholding policy that the Council had earlier adopted. Amending legislation was necessary if the Council's use of the proceeds of sale were to be freed of the obligation to purchase new lands to be used for the same purpose and, in the case of the former Harbour Board lands, the proceeds were not to result in a surplus under the Waitara Harbour Act. Such a surplus could not have been retained by the Council. [132] Next, the plaintiffs point to the correspondence between the Mayor and Mr Musker in late 1992, emphasising the Mayor's statements that "we wish to freehold the leases", referring to "assurances that the leaseholder's right to freehold would be respected, whatever the outcomes of ownership" and the statement that Mr Musker could be "sure we are there in the leaseholders' interests". There is an issue raised by the defendant as to whether plaintiffs other than Mr Musker were advised about the contents of this letter, so as now to be able to rely on it. The letter is referred to in each of the amended statements of claim, although the allegations made are simply that the letter was written to Mr Musker. Mr Hassell conceded that there was presently no evidence on that issue. For the purposes of the present applications, however, I think I should assume in the plaintiffs' favour (without deciding the matter) that they were aware of the letter. Making that assumption, however, does not, of course, affect the nature of the letter. [133] I cannot see that the letter was misleading or deceptive. The Council's freeholding policy had by this point suffered a major set-back in terms of the Government's attitude to the Bill and its implications for Te Atiawa's Treaty of Waitangi Claims. The letter from the Mayor simply reflected the reality with which the Council had been confronted. While still intending to further its freeholding policy, the Council had little practical choice but to comply with the Minister of Justice's wish that there be constructive dialogue between the Council and Te Atiawa over the freeholding issue say as a pre-condition to any progress being made. [134] The plaintiffs rely next on the January 1994 letter. That letter traversed events since introduction of the Bill and summarised the discussions that had taken place between representatives of the Council, the Minister of Justice and the Te Atiawa Tribal Council. It referred to an agreed joint approach to the Ministerwhich would bring benefits to both the people of Waitara and to Te Atiawa. That was said to involve four things, one of which was "ensuring that any Leaseholder who wished to freehold his or her land should be allowed to do so". Under the heading "The Council's Commitment" the Mayor recorded the Council's commitment to "resolving this problem" which in context appeared to be a reference not only to the freeholding issues but also to Te Atiawa's need to obtain compensation from the Government for lands that were confiscated from it in the nineteenth century. Then the statement is made that the Council wished to protect the rights of the Waitara leaseholders, the benefits of its ownership of the land and to respect its obligations to the ratepayers of the District. This was apparently simply a reiteration of the Council's policy to that point. There was, of course, no pre- existing right in the Waitara leaseholders to be able to purchase the freehold of their properties. The Council, however, wished to grant that right provided that it was able to do so on an economic basis and fulfil its obligations to the people of the district as a whole. [135] I do not consider that there was anything misleading or deceptive in this letter either. As with the letter of 4 December 1992, the letter was very much a reflection of the context in which it was written, and the difficulties which the Council continued to face in securing its policy objectives. [136] Turning next to the letter of 27 February 1997, sent by the Mayor to the Waitara leaseholders, I note that that letter commenced with a summary of the history of the issue to date, recorded the Council's concern at the slow progress being made and then noted, however, that "the Council's commitment to the Waitara leaseholders has not changed". It was said that the Council still considered the land to be freehold land and therefore not subject to any Treaty of Waitangi Claim. It was said that the Council still recognised that the individual rights of the people of Waitara occupying and leasing land in the disputed area should be preserved absolutely. But then, in an important passage for present purposes, the letter continued:Unfortunately, until either an agreement can be reached between the Council and Iwi negotiators, or Iwi and the Government reach a settlement on Treaty of Waitangi Claims, the Council is faced with somewhat of a stalemate inthe freeholding of these leases. Just as the Council looks to protect the interests of the lessees in this situation, it also wishes to maintain a good relationship with Iwi that fall within its boundaries. Further, without the support of the Government, there is little chance of the Bill proceeding through Parliament. In summary, the Council is still committed to the Bill which if enacted will enable the freeholding of these lessees[sic] . The final outcome is possibly outside the Council's control however it will continue to try to influence a timely decision.[137] In his submissions, Mr Hassall focussed on words used in the third to last paragraph of the letter to the effect that "the Council's commitment to the Waitara leaseholders has not changed". However, focussing on one sentence in the letter results in a misleading picture being presented when the overall tenor of the letter was to warn that, notwithstanding the Council's intentions on the freeholding issues, they may not be able to be achieved. I can see nothing misleading or deceptive in the letter. I consider it was an accurate and realistic statement of the Council's position at the time, one which, moreover, frankly recorded the difficulties that would need to be overcome if the Council's freeholding policy was to be successfully pursued. [138] The plaintiffs' claims emphasise what is referred to as repetition of the promise (i.e. that they would have the option of purchasing the freehold of the land) after April 1995, notwithstanding that the defendants knew by then that there was no certainty that the Bill would be passed into law and the Minister of Justice had advised against the decision to sell the leasehold properties, because that would exacerbate the current situation and could seriously harm the prospects of a satisfactory resolution of the issue. On the other hand, it is alleged that the defendant failed to inform the plaintiffs subsequent to April 1995 that they could not safely rely upon the promise because the defendant might decide to reverse its policy. [139] There is no allegation that prior to the steps that it took to review its policy stance starting with the resolutions that it made on 12 November 2002, the Council intended to do anything but continue with the policy it had adopted in December 1989. In 1995 there was, of course, correspondence between the Council and the Minister of Justice in the period between 6 January and 14 April. As I have observed earlier, as a result of that correspondence it appears that the Council tookno further step to bring about the sale of the properties to the leaseholders for some time. But there is no suggestion, still less an allegation in the statement of claim, that the Council had at that time decided to reverse its policy. The simple position was that the policy remained in place, although confronted by the various difficulties that were fully addressed in the circular letter of 27 February 1997. The Council's position was apparently accurately recorded in the Mayor's letter to Mr Musker of 25 January 2000. [140] In that letter, as has been seen, the Mayor repeated the Council's commitment to freeholding the leases, but at the same time she recorded that the Council had to wait until the land issues were further advanced. Again there is no suggestion that by this time the Council had considered abandoning its freeholding policy. That only happened in the open process upon which the Council subsequently embarked in 2002, a process which was replete with opportunities for affected persons to be heard as the Council considered whether or not its policy position should alter. [141] Once those public processes were embarked upon, then there was clearly the possibility of a change. The plaintiffs' claim, however, is based on the period earlier in time. I cannot accept that the Council had any obligation to advise the plaintiffs that they could not rely on the freeholding policy being fulfilled, because of the possibility that it might subsequently decide to reverse that policy. Ultimately, I consider Mr Goddard is correct when he submits that no local authority could have an obligation enforceable at law to advise that it might subsequently adopt a different policy from one that it is currently pursuing, at times when it fully intends to pursue the current policy. I observe further that in the present case, the freeholding policy was from the outset expressed in contingent terms in the sense that it was only ever propounded on the basis that it would be implemented in the context of a local bill. The legislation was, of course, not necessary to give the Council power to sell the freehold of the properties; it was, however, necessary if the Council was to have unfettered access to the funds and expend them for such purposes in the area which it considered appropriate in the interests of the general public. Although the amended statements of claim refer to existing powers that the Council could have used to freehold the land there was never a proposal that those powers would be used, because of the restrictions on the use of the proceeds of sale which would follow.Consequently, there cannot be any suggestion that the Council misled the plaintiffs at any stage by asserting that the freeholding policy would be advanced whether or not the Bill was enacted. [142] Mr Hassall emphasised that s 9 of the Fair Trading Act concerns conduct that not only is misleading or deceptive, but also extends to conduct that is likely to mislead or deceive. While that is so, it is difficult to see much significance in the point in the current context. It is only if particular words used in the correspondence to which I have referred are taken out of context that there can be an argument that the communications were likely to be misleading, and there can be no justification for such an approach. Given the qualifications to which the freeholding policy was subject at all relevant times, I do not consider that the Council's conduct was likely to be misleading or deceptive any more than it was in fact misleading or deceptive. Recipients of the various communications must be assumed to have understood that progress on the issue was contingent on the passage of the Bill, and that it was the delay attending the Parliamentary process as a result of the Minister's stance that was preventing achievement of the Council's policy objectives. As a result, I do not think it can credibly be argued that what was said or done was likely to mislead or deceive. [143] Nor do I think that anything turns in this case on the proposition that Mr Hassall drew from Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Pty Ltd (1998) 40 CLR 216. In the passage on which Mr Hassall relied Stephen J was envisaging situations of a very particular kind, as can be seen from the example he gave. The relevant passage in the judgment, at 227-228, reads:No doubt the meaning of the statutory prohibition which s 52(1) enunciates must be gained from the terms of the sub-section itself; but nothing in those terms suggests that a statement made which is literally true, i.e., that the centre at Hornsby is conducted by Hornsby Building Information Centre Pty Ltd may not at the same time be misleading and deceptive. It clearly may be. To announce an opera as one in which a named and famous prima donna will appear and then to produce an unknown young lady bearing by chance that name will clearly be to mislead and deceive. The announcement would be literally true but none the less deceptive, and this because it conveyed to others something more than the literal meaning which the words spelled out. Thus, in passing off, a newly incorporated defendant company may not use, in its newly established business, its true corporate name if it be deceptively similar to that of a plaintiff with an established reputation (Fine CottonSpinners and Doublers' Association Ltd v Harwood Cash & Co. Ltd, [1907] 2 Ch. 184, at p 190). What has been said of passing off actions applies equally in the present case; as Buckley LJ remarked in John Brinsmead & Sons Ltd v Brinsmead (1913) 30 RPC 493, at p 506, a statement which is literally true and accurate may nevertheless carry with it a false representation. Lord Morris expressed much the same notion in Parker- Knoll Ltd v Knoll International Ltd [1962] RPC 265, at p 279. The same will apply in relation to s 52(1).[144] Plainly, the kind of case being considered in that passage is very different from the present. This is not a case where something which is literally true nevertheless carries a false representation. Rather, the focus is solely on the Council's statements of intention in relation to freeholding the land. Those statements of future intent do not become false or misleading simply because the Council ultimately changed the policy: Muollo v Creative Engineering Design Ltd. Further, I can see nothing in the Council's conduct that would have caused reasonable people to have been misled: AMP Finance v Heaven (1997) 8 TCLR 144. [145] The most significant alteration to the plaintiffs' pleadings between the March and June hearing dates was to add the assertion which appears at paragraph 8 in the amended statements of claim, alleging as the misleading or deceptive conduct of the defendant the fact that it had both made the promise or created the belief in the plaintiffs that they would be able to freehold their land, together with the subsequent repudiation of the freeholding policy. In other words, it was the combination of initial promise and subsequent repudiation on which the plaintiffs relied. [146] This approach seems to have been inspired by an article to which Mr Hassall referred by one Weeliem Seah, appearing in the Murdoch University Electronic Journal of Law, Volume 7, No.3 (September 2000) headed "Unfulfilled Promisory Contractual Terms and Section 52 of the Australian Trade Practices Act". At paragraph 13 of that article, the author wrote:Notwithstanding that, subject to the propositions cited above, a promise cannot itself be misleading at the time at which it was made, it is submitted that there may still be an argument that the promise and its subsequent non- fulfilment is misleading. This approach is based on treating the promise and the breach as together constituting the conduct sought to be impugned under s 52. If a promise and its subsequent breach are viewed together as the relevant conduct, it is arguable that such conduct is misleading. Forexample, in a contract to sell a car, A promises to sell to B the car if B pays $100, and after such payment A decides instead to refund B's money and sell the car to C for $200. In such a case, it is arguable that the conduct promising to do an act and thereafter not doing that act, in breach of the contractual obligation, is misleading in that it intends to lead the promisee into error, namely in error of [sic] the belief that A will sell the car to B on payment of $100. It is submitted that the conduct in promising to do something and thereafter not doing it is per se misleading, irrespective of whether A had the intention of keeping, or a reasonable basis for making, the promise since it is the conduct in making the promise and ultimately not fulfilling it that is said to be misleading, and not the conduct in making the promise alone.[147] Mr Hassall referred also in this context to observations by Richardson J inGoldsbro v Walker [1993] 1 NZLR 394, at 401 to the effect that the test of whether conduct is misleading for the purposes of s 9 is objective, requiring assessment of the circumstances in which the conduct occurred and the person or persons likely to be affected by it and secondly, that there is no requirement that the person engaging in the conduct must intend to mislead or have the purpose of persuading a person affected by the conduct, it being "sufficient that there is a clear nexus between the conduct and the loss or damage suffered". [148] Mr Goddard attacked Mr Hassall's proposition that the misleading conduct consisted of both the alleged promises together with their subsequent non- performance, arguing that the approach made no sense as a matter of language of logic, was unsupported by authority (and, indeed, was inconsistent with the relevant authorities) and would have absurd consequences obviously outside the legislative intent. As to illogicality, Mr Goddard points out that once the "combined" conduct has occurred, the plaintiffs cannot say they have been misled. That is, they know the original promise will not be performed. The combined conduct does not lead them to hold any incorrect belief as to actual or likely future performance. Secondly, the plaintiffs here claim to have relied on the promise of being able to freehold; they do not allege reliance on the combined conduct including the Council's subsequent change of policy. In fact, all of the alleged acts of reliance on the part of the plaintiffs took place before 2003 whereas, in terms of the "combined conduct" argument, the relevant change of policy did not occur until 12 August 2003. Once the Council had announced that it would not be selling to the leaseholders, it couldnot logically be asserted that the plaintiffs were then able, reasonably, to rely on an expectation of being able to freehold the land. [149] I consider that Mr Goddard is right in respect of all these points. I think the illogicality is apparent on the face of the passage that I have quoted from the Seah article above. If the induced mistaken belief is that A will sell the car to B on payment of $100, it is impossible to see how A's refusal to do so, and sale of the car to C for $200, can contribute to B's mistaken belief. [150] I consider Mr Goddard is also correct in his submission that the combined conduct argument is inconsistent with relevant New Zealand authorities includingMuollo v Creative Engineering Design Ltd (2006) 8 NZBLC 101,675, Commerce Commission v Vero Insurance New Zealand Ltd (2006) 8 NZBLC 101,871 andSinclair v Webb & McCormack Ltd and Another (1989) 2 NZBLC 103,605. [151] In Muollo, the Court of Appeal held that the High Court had erred in finding that a person, having given an undertaking and later resiled from it, must never have intended to honour the promise. At [24] the Court observed:It does not follow that, because at some later stage a person wrongly decides not to carry out the promise, he or she never intended to do so. Such a line of reasoning fails to recognise the possibility that the decision to resile from the promise may have been made subsequently.[152] At [25], the Court continued:There may be occasions when, on the evidence in a particular case, it is clear that a person in trade never intended to deliver on the promise (see, for example, Gunton v Aviation Classics Ltd [2004] 3 NZLR 836 at [236] – [246]). In such circumstances, liability for misleading conduct arises because the innocent party is able to show that the promisor did not, at the time of making the promise, have any intention to deliver on it: James v Australia and New Zealand Banking Group (1986) 64 ALR 347 at 372. The circumstances where a plaintiff is able to prove that will be rare. The important point to be stressed is that the mere fact that representations as to future conduct do not come to pass does not of itself make them misleading or deceptive.[153] Those observations are generally pertinent to this case. Their particular relevance at the current point, however, is that there was no suggestion in that case that both the promise and the action of resiling from it should be analysed on acombined basis to establish misleading conduct. Such an approach would indeed be contrary to that adopted in Muollo. [154] Reasoning similar to that in Muollo was adopted by Asher J in Commerce Commission v Vero Insurance New Zealand Ltd at [42], and in Sinclair v Webb and McCormack Ltd by Barker J at 103,611. Once again, the analysis in those judgments would have been very different if a combined conduct argument such as that now advanced by Mr Hassall were appropriate. [155] These cases also show that s 9 of the Fair Trading Act is not intended to be a vehicle by which non-contractual promises can be enforced in their terms. Mr Goddard maintained that if the plaintiffs' argument were correct, then every non- contractual promise made in trade could be enforced under the Fair Trading Act and every contractual promise could be similarly enforced. In both cases the full range of remedies under s 43 would be available and none of the claims would face any effective limitation period because the misleading conduct would only be revealed as such when the defendant failed to perform. Ongoing failure to perform would mean in fact that the limitation period would never expire. [156] These consequences of the combined conduct argument lead me to reject it. I accept Mr Goddard's propositions that the plaintiffs cannot point to any misleading or deceptive conduct on the part of the Council and I consider that the plaintiffs will not be able to succeed on their causes of action based on the breach of the Fair Trading Act, on this ground alone. [157] A consequence of my rejection of the plaintiffs' "combined conduct" argument is that even if I were wrong in my general conclusion that the defendants had not breached s 9 of the Act, the plaintiffs' claims would be largely statute barred, in any event. As earlier explained, until 2 May 2001, the rule was that an application for relief under s 43 of the Act had to be made at any time within three years of the time when the matter giving rise to the application occurred (s 43(5), prior to its amendment in 2001). If the plaintiffs had commenced their claim on 2 May 2001, they would even then have been prevented from relying on conduct that occurred prior to 2 May 1998. As has been seen, the rule was changed from 3 May 2001, butthe Fair Trading Amendment Act 2001 provided that nothing in the amendment would enable proceedings to be brought which were barred before the commencement of the Amendment Act on 3 May. [158] Almost all of the impugned statements upon which the plaintiffs rely were made prior to 2 May 1998. One exception is the Mayor's letter to Mr Musker of 25 January 2000. I have already referred to that letter. For the reasons I have already given, I do not see how it could possibly found a claim that the Council had breached s 9. Insofar as the plaintiffs rely on on-going statements by individual councillors on informal social occasions, I agree with Mr Goddard that they cannot be used to establish liability on the part of the Council. There is no explanation on offer from the plaintiffs as to how the Council could have become legally liable for anything said by the councillors on such occasions.Conclusion[159] For the reasons I have already given, I have decided that the plaintiffs' Fair Trading Act claims could not succeed if the matter went to trial. Having reached that view, it is not necessary for me to deal with the other matters that were the subject of argument by counsel. I make the following brief observations however. On the question of whether the loss sought was recoverable, the law is as explained by the Court of Appeal in Harvey Corporation Ltd v Baker [2002] 2 NZLR 213. Obviously, what was said by Tipping J in the minority in Cox & Coxon Ltd v Leipst[1999] 2 NZLR 15 supports Mr Hassall's argument on this part of the case. However, it is the majority judgment in that case, and the Court of Appeal's subsequent unanimous decision in Harvey Corporation Ltd which are binding on this Court. On that basis, I very much doubt whether the loss which the plaintiffs are attempting to recover in this case is properly recoverable. [160] On the issue of whether or not the Council was acting "in trade", I tend to the view that it was not. Later in this judgment, discussing the arguments of the parties on the claim based on issue estoppel I have expressed my view that New Zealand public law does not recognise such a claim against a public authority exercising a statutory discretion or performing a public duty. The reasons that I give for reachingthat conclusion can be applied by analogy in the present setting. In my view, when the Council both initially adopted the freeholding policy in December 1989, and when it later resolved to reverse that policy it was not acting "in trade". Rather, it was making policy at a broad level of abstraction well removed from day to day operational considerations. The matters upon which the plaintiffs rely in pursuit of the present claim were simply observations made from time to time in correspondence about the Council's policies. I tend to the view that there was not here any relevant act "in trade" which could form the basis of a valid claim under the Fair Trading Act, although it is unnecessary for me to decide that point.Promissory estoppel[161] The plaintiffs plead in paragraph14.1 of the amended statements of claim, in each case that:The Defendant made a promise to the Plaintiffs (the said promise) that they would be given the right or option to freehold the land and/or the Defendant created a reasonable belief ("the said belief") in the Plaintiffs that they would be given the right or option to freehold the land.[162] In each case, the plaintiffs then plead particulars in the same terms as the particulars advanced in respect of the Fair Trading Act claims. [163] The statements of claim then allege repudiation by virtue of the process upon which the Council embarked on 12 August 2003 ending in the resolution of 30 March 2004, reliance on the promise in various ways, acting to their detriment and that the plaintiffs suffered loss. On the issue of detriment which is particularly relevant to the defendant's argument on this cause of action, it should be noted that the allegations are, broadly (with some differences between the various statements of claim) that an increase in value of the plaintiffs' leasehold estate by virtue of improvements carried out by the plaintiffs on their properties, has been less than it would have been had it not been for the Council's change of policy, or more generally that their leasehold interest has increased in value by a lesser amount than would have been the case had the Council not changed its policy.[164] The statements of claim then include allegations of unconscionability. These are largely in the same terms, but the particulars given in the case of some of the statements of claim are fuller than in others. One in the former category, the statement of claim by Arms and Others, alleges that:19. Having made the said promise and created the said belief the Defendant knew or ought to have known that the Plaintiffs believed that the freeholding policy of the Defendant would not change and that the Plaintiffs would govern their affairs accordingly including the expenditure of substantial moneys by way of improvements to their property and the Defendant could and should have honoured its promise by way of not withdrawing the New Plymouth District (Land Vesting) Bill from Parliament and/or implementing its freehold policy and seeking Court sanction to the distribution of the net proceeds arising from such implementation. Particulars 19.1 Having made the said promise and created the said belief the Defendant knew or ought to have known that there was a widespread understanding and belief amongst the leaseholders in the community at large that they could rely upon the said promise and belief and in doing so would be likely to expend monies in the improvement of their property in anticipation of the freeholding policy being implemented and the Defendant took no steps to warn the Plaintiffs and other Lessees that the freehold policy might not be implemented and in such circumstances it was unconscionable for the Defendant to repudiate the said promise. 19.2 The Defendant should reasonably have contemplated that the Plaintiffs as lay persons having no experience or expertise in Local Government affairs would rely on the material published by the Defendant as set forth in paragraph 6.1 to 6.10 of the Amended Statement of Claim and spend monies improving their property but did nothing to notify the Plaintiffs that it would be unsafe to do so.Defendant's argument[165] Mr Goddard contended that this cause of action could not succeed for four main reasons. First, he argued that there had been no unqualified promise that the plaintiffs would be given an opportunity to freehold. Rather, the Council's announced policy had from the outset depended on a number of contingencies. Further, he maintained that it was not reasonable for the plaintiffs to rely on the policy being implemented and not changing even if the Council changed its membership. Third, he argued that the plaintiffs were not worse off by virtue oftheir alleged reliance and there had been no relevant detriment, so that there had been no reliance of a kind that would make a change of position by the Council unconscionable. Finally, he submitted that a cause of action in promissory estoppel is not available against a public body in connection with the performance of statutory duties or the exercise of statutory discretions. [166] Amplifying the first of these propositions, Mr Goddard argued that leaseholders had simply been advised of the Council's 1989 policy decision and, shortly after that, that the Council would be seeking legislative change to enable it to spend the money derived from the sale of the freehold so as to produce the greatest benefit to the town of Waitara. There had never been any statement by the Council as to the terms on which the land would be sold, or when the land would be sold and consequently, no firm commitment to sell the land could be derived from the Council's statements from time to time, still less a commitment to sell at a particular time or on particular terms. He emphasised the way in which the freeholding policy had early on been linked to the passage of the amending legislation with the implication that, if the legislation were not passed, it would be unlikely that the freeholding would proceed. In the circumstances, reliance placed by the plaintiffs on the alleged promise or induced belief was not reasonable. [167] In this respect, Mr Goddard maintained that the Council had not done anything to encourage reliance on an assumption that freeholding would be permitted regardless of the progress of the Bill; the Council's announcements had clearly identified the uncertainties and delays that the Bill had encountered and nothing the Council had said had purported to preclude a future policy change. [168] Mr Goddard was able to refer in fact to statements made by some of the plaintiffs (to some of which I have already referred) which he said showed a realisation that it was less than certain that the Council's freeholding policy would proceed. For example, in his letter dated 17 December 1994, Mr Musker had written that he was "very well aware of the difficulties of getting the desired action from Government and politicians". "Equally" he continued "I am aware of the bureaucracy and political ramifications at times involved locally".[169] Again, in a submission that he made to the Council dated 27 January 2003, Mr Musker stated:I have been hoping to freehold since 1992, when the appropriate legislation was presented to Parliament, but which has been on "hold" ever since. Over this period I have made numerous submissions to, and have been in contact with the Council, councillors and Mayor. With Government expediency and interference, and a too dilatory Council, a decision on freeholding has been deferred for far too long, and whatever the final outcome, I commend the Council for at least getting on with it.[170] Again, in a later submission dated 24 September 2003, Mr Musker wrote criticising the Council's decision o12 August 2003 stating that:The Council's decision has dismissed all the work and deliberations and integrity of the earlier Councils, which throughout the 90's had worked to give leaseholders the option of freeholding, and had clearly set out, that as soon as the validating legislation is passed, the freeholding option would proceed. This was also understood by any prospective purchasers of endowment land.[171] Mr Goddard pointed to two statements made by Mr Murray Arms, one of the trustees of the Peak Trust, and a plaintiff in its proceedings. In July 2003 he wrote that:The Council has been giving mixed messages to the Waitara leaseholders for something like 30 years now.[172] In a submission dated 12 September 2003, Mr Arms wrote:For many years (probably about 30 years to the best of my recall) at various times, Waitara leasholders have had letters from Council, indicating that action would be taken at some time to sort out the issue, and to probably give a freeholding option to existing leaseholders.[173] Mr Goddard also referred to what the plaintiff Raymond Campbell had written in a submission to the Council of 18 August 2003:I have always believed that the Council actually owned this land and that it might at some future date freehold the land for leaseholders.[174] Another plaintiff, Mr Rex Armstrong, wrote in a submission dated 1 March 2004:Over the years Council has made it well known of their intention to allow and make available the opportunity for freeholding of lease land sections. Whilst I understand that no Council can necessarily commit future Councils to an indefinite action, I do feel that in this instance Council of this day should honour the actions of the 1992-95 Council decision which was passed on to Government (Doug Graham) who for some reason unknown decided to ignore the wishes of all parties.[175] On the question of detriment, Mr Goddard submitted that the actions taken by the plaintiffs in reliance of the alleged promise had not made them worse off, and that the pleading did not allege they had sustained real loss. At the most, the plaintiffs' pleading amounted to an assertion that they had lost an opportunity to become better off. Mr Goddard submitted that there was no authority which would support recovery of that kind of "loss" in a claim based on promissory estoppel. However, even if loss of opportunity could found a claim in promisory estoppel, then it would need to be a specific opportunity that the plaintiffs would have had, and would have pursued but for the Council's actions. As the plaintiffs could not point to any specific transaction or purchase that had been foregone as the result of the statements made, they were in essence simply seeking to recover the benefit of their existing properties being freeholded, a kind of irrecoverable loss representing disappointed expectation, but not detriment in the relevant sense. [176] Here, Mr Goddard relied on the statement of the law in Equity and Trusts in New Zealand (Andrew S Butler (General Editor), Brookers Ltd, 2003 at 16,2.3 (pp497-498)) that:The relevant detriment is that which the representee would suffer if the representor is permitted to resile from the belief or expectation which has been relied on. Mere disappointment from an unfulfilled promise is not a sufficient detriment to raise an estoppel. The representee must have acted or abstained from acting in such a way that he or she will suffer harm over and above his disappointed expectation.[177] That passage derives support from the decision of the High Court of Australia in Commonwealth of Australia v Verwayen (1990) 170 CLR 394. Mr Goddard argued that the nature of the statements made, the absence of any reasonable reliance or real detriment showed that it was not unconscionable for the Council to revisit the initial policy in the performance of its public duties. Rather, by consulting widely, commissioning further research and advice and reviewing its decision in the light ofall the information before it, the Council had acted properly and responsibly in the light of its statutory responsibilities and the statutory framework for its decision- making. [178] This led Mr Goddard to his final point in respect of this cause of action, that statements made by public bodies such as the defendant cannot be made the basis of claims in promisory estoppel. Rather, to the extent that the law would provide a remedy in relation to them, it was by means of an application for review based upon the doctrine of legitimate expectation. Here, Mr Goddard referred to R v East Sussex County Council ex parte Reprotech (Bebsham) Ltd [2002] 4 All ER 58, and the discussion of that case and other authorities by Wild J in Challis v Destination Marlborough Trust Board Inc [2003] 2 NZLR 17. In the former, Lord MacKay of Clashfern wrote at [6]:I would also wish expressly to agree that where public authorities are fulfilling statutory duties or exercising statutory discretions, the public interest in their activities and the effect on members of the public who are not parties to the particular process which the authority is conducting requires the law to differentiate clearly between such activities and those in which interests only of those directly involved must be considered.[179] Lord Hoffmann, who wrote the leading judgment in Reprotech, held that it was "unhelpful to introduce private law concepts of estoppel into planning law" (at [33]) and that earlier cases which had done so were to be explained by the absence at the time of a developed law of legitimate expectation. At [35], he wrote:It seems to me that in this area, public law has already absorbed whatever is useful from the moral values which underlie the private law concept of estoppel and the time has come for it to stand upon its own two feet.[180] In Challis, Wild J concluded that a cause of action based on estoppel had no place in New Zealand public law. He therefore dismissed a cause of action in which the plaintiffs alleged that, in reliance on a representation that had allegedly been made by the defendant, they would be granted a renewal of a contract which they had with the defendant to provide visitor information services. In the course of doing so, he quoted from another English authority, namely the decision of the Court of Appeal in South Buckinghamshire District Council v Flanagan [2002] 1 WLR 2601, at 2606-2607, referring to Lord Hoffmann's opinion in Reprotech:Although [Lord Hoffmann] recognised the analogy between private law estoppel and the public law concept of a legitimate expectation created by a public authority, Lord Hoffmann pointed out that remedies against public authorities also have to take into account the interests of the general public: paragraph 34. It is clear that the House saw the earlier cases where estoppel had been applied in planning law as an attempt to achieve justice at a time when the concepts of legitimate expectation and abuse of power had scarcely made their appearance in public law. Now that those concepts are recognised, there is no longer a place for the private law doctrine of estoppel in public law or for the attendant problems which it brings with it.Plaintiffs' argument[181] For the plaintiffs, Mr Hassall relied on the summary of the law given in The Laws of New Zealand – Volume 12, Estoppel at paragraph 68:Where one party has made a clear and unequivocal promise or assurance by words or by conduct to another party which was intended to affect the legal relations between the parties and to be acted on accordingly, then once the promisee has taken the promisor at his or her word and acted on the promise, the promisor is bound by it.[182] That passage is apparently based on some of the observations made by Richardson J in Burbery Mortgage Finance and Savings Ltd v Hinds Bank Holdings Ltd [1989] 1 NZLR 356, at 361:It is well settled that where one party has by words or conduct made to the other a clear and unequivocal promise or assurance intended to affect the relations between them and to be acted on accordingly, then once the other party has taken him at his word and acted on it, the one who gave the promise or assurance is bound by that assurance unless and until he has given the promisee a reasonable opportunity of resuming his position . Although there are indications in some of the authorities that there must be a pre-existing contractual relationship between the parties, I am of the view that the doctrine applies in appropriate cases where there is a pre-existing legal relationship (Durham Fancy Goods Ltd v Michael Jackson (Fancy Goods) Ltd [1968] 2 QB 839, 847); or where the promise affects a legal relationship which will arise in the future (Bank Negara Indonesia v Hoalim[1973] 2 MLJ 3 (PC)); or more broadly where, as here, the promisor and promisee have interests in the same subject-matter.[183] Mr Hassall argued that the defendant's status as a local authority did not make it immune from the doctrine of estoppel. In that respect he relied on an article by Sir Anthony Mason, "The Place of Estoppel in Public Law" published in Law and Government Australia (Mathew Groves ed.; The Federation Press; 2005). In that article, the learned author wrote at pages 182-183:Governments, public authorities and administrative decision-makers are not immune from the doctrine of estoppel, but the role of estoppel in public law is necessarily circumscribed by statute law. In particular, principles of estoppel cannot be invoked to prevent a public law entity from exercising its statutory powers. A party cannot set up an estoppel which would either preclude, or be inconsistent with, the performance of a statutory duty. A party also cannot set up an estoppel which would impair or stultify the exercise of a statutory discretion.[184] Mr Hassall also pointed to another passage from the same article, later on page 183:In every case, it is necessary to construe the statue and ascertain the legislative intent because it may provide the answer to the question. There is scope for the operation of estoppel against the government and public authorities when an estoppel will not preclude, or be inconsistent with, the performance of a statutory duty and will not impair or stultify the exercise of a statutory discretion. But even in such a case, it is unlikely that a party can set up an estoppel against the public authority in its governmental capacity, that is, in relation to decision-making at a planning or policy level as distinct from an operational level. This last distinction is plainly difficult and awaits further refinement by the courts.[185] Mr Hassall submitted that the last observation made in the passage just quoted showed that the issues were not settled for determination on an interlocutory application with evidence by affidavit, as in the case of the current applications to strike out and for summary judgment. [186] Mr Hassall also referred to the decision of the Privy Council in Attorney- General of Hong Kong v Ng Yuen Shiu [1983] 2 All ER 346 at 351 where it was held that when a public authority has promised to follow a certain procedure it should act fairly and implement its promise so long as doing so does not interfere with its statutory duty. It was held that the public authority is bound by its undertakings as to the procedure it will follow provided they do not conflict with its duty. [187] Mr Hassall maintained that the facts pleaded were capable "either singularly or collectively" of providing the requisite promise or creation of an assumption so that, on the balance of probabilities, the defendant cannot show that the cause of action cannot succeed. He asserted that unqualified promises had been made which were not subject to any implied qualification as to future modification or revocation.[188] Second, he contended that it was reasonable in all the circumstances for the plaintiffs to rely on the Council's policy being implemented, "given the explicit wording of the promises". He contended that this was an issue which could not be properly or adequately addressed on an interlocutory application. [189] Thirdly, Mr Hassall submitted that given the unqualified assurances that the Council had given to the plaintiffs, and the inevitable reliance that the plaintiffs had placed on those assurances, it was inevitable that the reversal of the policy amounted to a deliberate decision to resile from the commitment, and was unconscionable on that ground. [190] Mr Hassall distinguished the decision of the House of Lords in Reprotech on the basis that it was a decision concerning planning law, and not the general law. He referred in this context again to the article by Sir Anthony Mason, and his observation at page167 that:The public authority, like an individual, is subject to the general law, including the private law of contract, tort, properly and equity. So long as there is no question of ultra vires and impairment of a statutory discretion, the principles of estoppel can apply to the public authority.[191] Referring to observations made by Randerson J in Springs Promotions Ltd v Springs Stadium Residents' Association Inc [2006] 1 NZLR 846, to the effect that common law principles or equitable doctrines such as estoppel generally have no application under the Resource Management Act, except in "exceptional cases", Mr Hassall contended that the present case involved exceptional circumstances. He submitted that the public at large were not bound by the decision made by the Council, unlike the position applying in the Reprotech case.Discussion[192] When, on 11 December 1989, the Council adopted the policy of permitting the owners of the leasehold land to purchase the freehold, it did so on the basis, amongst other things, that there would be an investigation to determine the most satisfactory use of the capital acquired as a result of the sales. Following the reports that I have earlier referred to, however, it was decided, on 8 April 1991 that theCouncil should promote local legislation to enable the sale of freehold to proceed on the basis that all funds derived from the sale would be credited to the general revenues of the Council. Thereafter, anything that was said or done by the Council until the policy was changed was in the context that passage of the Bill would have to precede any actual sales to leaseholders. Apart from the original resolution, the other statements and actions upon which the plaintiffs now rely, from initiation of the local legislation down to the resolution of 20 August 2002 (which initiated the process by which the policy was eventually changed) had that context. [193] The events upon which the plaintiffs rely are not able to be characterised as an unequivocal promise or as justifying a belief on the part of the plaintiffs that the right to freehold would definitely be given. Apart from any other consideration, it was plain in the circumstances that if the Bill were not passed it was most unlikely that the freeholding option would eventuate. That the promise was not a definite one, nor the alleged belief one that freeholding would definitely be permitted, seems to be indicated by the statements made by some of the present plaintiffs in submissions to the Council upon which Mr Goddard relied and which I have earlier set out. In my view, Mr Goddard correctly characterised those statements as showing a realisation that it was less than certain that the Council's freeholding policy would proceed. There was never any timetable created, no formal negotiation was ever commenced, no formal valuation process was embarked upon, and, as the years went by, and the difficulties confronting the Bill became apparent, parties in the position of the plaintiffs must have realised that there was a very large questionmark over the Council's ability or willingness to proceed with the freeholding option. [194] Those difficulties had been made very apparent by the Mayor's circular letters of January 1994 and February 1997. They were underlined by the letter that the Mayor wrote to Mr Musker on 25 January 2000. In the circumstances, I do not consider that the plaintiffs could possibly establish that they reasonably relied on a clear and unequivocal promise or assurance made or given by the Council, that the land would be freeholded. It is possible to conclude on this basis alone that the plaintiffs cannot succeed on their cause of action based on promissory estoppel.[195] However, there are other considerations which lead to the same conclusion. First, I consider that when the Council adopted the freeholding policy in December 1989 and, after following the procedures which it implemented from August 2002, made its resolution of 30 March 2004, the Council was making broad policy decisions rather than acting at an operational level. It is not the case, as Mr Hassall submitted, that the "public at large" would not be "bound by the decision". As the history of this matter shows, what was done with the land was considered to be of vital importance not only to the leaseholders affected, but also to the Te Atiawa people. But whilst those two groups might be said to have been most closely affected by how the issues were resolved, it is not difficult to see how the public generally had an interest in the issue. That is plainly reflected by the terms of the Council's resolution of 30 March 2004. In the course of that resolution, the Council, for example, noted that it wished to achieve "a comprehensive solution to an issue that has caused a longstanding social disharmony within our community". The Council sought, by the decision it made, to promote the "social, economic, environmental and cultural well-being of the district". It saw its decision as "promoting community outcomes", referring to quality of life, and iwi relationships, mentioning in particular the interests of tangata whenua, the Waitara community and the current rights of leaseholders. [196] Although it is often difficult to draw a distinction between decisions which are of a policy nature at one end of the spectrum, and those which are of an operational nature at the other, the terms of the Council's resolution show that the decision on whether or not to reverse the freeholding policy was clearly in the former category. That does not mean, of course, that the Council was not exercising statutory powers and discretions. On the contrary, as a creature of statute, everything the Council does must be referable to a statutory power. [197] The Council's changed policy was developed and considered in accordance with the provisions of the Local Government Act 2002, and the extensive requirements in relation to planning, decision-making and accountability set out in Part 6 of that Act. The provisions of the Act are reflected in the detailed resolution that the Council made on 30 March 2004. Many of the provisions of Part 6 of the Act would be relevant (including the obligation to adopt a revenue and financingpolicy (s 102(4)(a) and 103) as well as the more general obligations in relation to local authority decision-making flowing from s 76 including such matters as identifying the objectives of decisions, and assessing the benefits and costs of decision-making in terms of the present and future social, economic, environmental and cultural well-being of the district (s 77(1)); giving consideration to the views and preferences of persons likely to be affected by decisions, as required by s 78; the duty to consult under s 82 and where appropriate, adoption of the special consultative procedure under s 80(3) of the Act. [198] There are also relevant provisions in Part 7 of the local Government Act. They include the necessary preliminary steps that must be followed before the Council may sell or exchange property that has been vested in it in trust or as an endowment. It the case of such land, the Council must first include in its draft long- term Council community plan, a statement of its intention to sell the land, and the use to which the proceeds of the sale or exchange will be put. The long-term Council community plan must have been adopted in accordance with the requirements of Part 6 of the Act. [199] On the basis of the Council's resolution of 11 December 1989, about 800 leasehold properties were affected (the correct figure might have been 776, as earlier noted). In December 1989 the policy adopted was that they should be able to be freeholded. That policy has now been reversed. There is no doubt that a decision affecting such a substantial number of properties was one which needed to be approached under the relevant provisions of the Local Government Act 2002, on the basis of the broad public interest considerations set out in the legislation. A decision that bound the Council to act in accordance with the "assurances" upon which the plaintiffs rely in this proceeding would amount to a very real fetter on the proper performance by the Council of its statutory obligations. [200] It is in this statutory setting that the rival contentions of the parties about the implications of the Reprotech and Challis decisions must be considered. I observe first, that I do not agree with Mr Hassall's proposition that Reprotech was intended to be limited in its effect to cases arising under planning legislation. The statements of principle made by both Lord Hoffmann and Lord MacKay of Clashfern areplainly not so limited. Lord Hoffmann referred broadly to public and private law in limiting estoppel to a role in the latter. Lord MacKay drew a distinction between decisions affecting the public generally and those which are limited in effect to those whose interests are directly involved. Neither judgment seems to me to support the proposition upon which Mr Hassall sought to rely. Similarly, in Challis, Wild J's conclusion was that estoppel had no place in "New Zealand public law". The facts of the case did not arise under the Resource Management Act, and concerned the management and operation of a visitor information centre. Wild J's conclusion that estoppel was unsuited to public law was based in part on the fact that a public authority cannot be estopped from exercising a statutory discretion or performing a public duty. Once again, the broad classification that he made was between public and private law actions. [201] I accept, as Sir Anthony Mason wrote in the article discussed above, that a public authority may be subject to rules arising from the private law of contract, tort, property and equity. But, while that may be so in relation to individual transactions that affect its relationship with a particular person, that proposition cannot be allowed to impinge upon the exercise by the Council of its statutory duties and obligations. Where, as here, the Council is essentially operating at the level of policy formation, it must pre-eminently have in mind the rights of the people of its district as a whole. Its decisions will properly reflect the kinds of matters that the Council recorded in its resolution of 30 March 2004. [202] Nor do I consider that this case is to be analysed as raising an issue concerning whether or not the Council should be obliged to adhere to a particular procedure that it has promised to follow, as Mr Hassall submitted on the basis of the decision of the Privy Council in Attorney-General of Hong Kong v Ng Yuen Shiu. For the reasons that I have already given, I consider that there was much more at stake here than a procedure to be followed.Conclusion[203] I have concluded that promissory estoppel is not an available cause of action to the plaintiffs on the present facts, for these reasons additional to the conclusion Iearlier expressed that they cannot point to any unequivocal promise or belief reasonably relied on that the land would be freeholded. Having expressed these conclusions, I do not need to address the other issues raised by Mr Goddard based on the absence of relevant loss or detriment, rendering the Council's change of position not unconscionable. I say, shortly, that I do not regard the Council's change in position as having been unconscionable, but prefer to leave the other issues addressed by Mr Goddard for decision in a case where they need to be decided.Negligent mis-statement[204] The plaintiffs' third cause of action is in negligent mis-statement. With minor exceptions, each of the statements of claim makes the same allegations as the basis of this claim. The pleading is:20. THE Defendant at all material times owed to the Plaintiffs a duty of care including a duty to be truthful and candid ("the duty"). Reasons the duty owed 21.1 There was sufficient proximity between the Defendant and the Plaintiffs for the duty to arise. 21.2 It was reasonably foreseeable that loss would or might be occasioned to the Plaintiffs if the Defendant failed to take adequate care in making the said promise and creating the said belief. 21.3 There are no policy considerations militating against the imposition of the duty. 21.4 The defendant knew that the Plaintiffs as lay persons having no experience or expertise in Local Government affairs might assume the wording of the said promise and creation of the said belief was such as to involve a binding commitment. 21.5 The Defendant assumed a duty of care to the Plaintiffs by making the statements and communications referred to in paragraphs 6.4 to 6.8 (both inclusive).[205] The only slight difference arises in respect of the claim by M A Smith and C Armstrong-Smith whose pleading, in the final paragraph, makes reference to paragraphs 6.4 to 6.10 of the statement of claim (rather than paragraph 6.8). The effect of that difference is to bring into play references to conversations between aCouncillor Pryme and the plaintiff in the period 1996/1997 down to 2002. I have already held that conversations between plaintiffs and individual councillors could not create a liability on the part of the defendant and that conclusion holds good in the current context as well. [206] For the rest, the claim relies on the same facts advanced in respect of the other causes of action and depends essentially on the effect of the letters from the Mayor dated 4 December 1992, January 1994, 27 February 1997 and 25 January 2000. [207] Having advanced those reasons as to why the duty is owed, the pleading then alleges that duty was breached by the Council continuing to make statements and communications beyond April 1995 notwithstanding that the Council knew by then that there was no certainty that the Bill would be passed into law, and the Minister of Justice had advised against the decision to sell the leasehold properties; by failing to make clear that the defendant was free to "repudiate" its promise at any time in the future; by failing to make any qualification that some future Council might reverse the freeholding policy and by wording its statements in such a way that the plaintiffs, as lay people, would inevitably "imply therein an irrevocable commitment by the defendant upon which they could safely rely". [208] Similar allegations as to loss are then advanced as in respect of the promissory estoppel claim.Defendant's argument[209] Mr Goddard submitted that there could be no duty of care owed to the plaintiffs in connection with the announcements of Council policies to expressly add that policies might subsequently be changed. Further, he submitted that no duty of care could have been breached, on the basis that everything the Council said had been accurate and correct at the time, and had related to policies in fact adopted by the Council. The fact that different policies were later adopted did not retrospectively render the original decisions or statements negligent. He repeated inthis context also, submissions that the plaintiffs were seeking to recover their expectation loss, which could not be recoverable in a negligence claim. [210] Mr Goddard submitted that no authority supported the proposition that a Council, or any other governmental agency, has a duty to add an express qualification or disclaimer to a policy announcement to the effect that the policy might later change or be reversed. The duty alleged by the plaintiffs would be a very wide-ranging one, potentially applying to every announced policy statement, with possibly dramatic consequences. In effect, changes to a policy that had been announced without reference to the possibility that it might later change might be rendered unlawful. [211] Mr Goddard argued that as a matter of common sense, policy makers are entitled to assume that those to whom their statements about current policy are addressed know that policies can change over time, as circumstances change; because it is not reasonably implicit in a policy statement that the policy will never be reviewed or altered, no disclaimer is needed. [212] Mr Goddard referred to the Court of Appeal's decision in Rolls-Royce New Zealand Ltd v Carter Holt Harvey Ltd [2005] 1 NZLR 324, Attorney-General v Carter [2003] 2 NZLR 160 and Attorney-General v Body Corporate 200 200 [2007] 1 NZLR 95, submitting that the statements in principle in those cases tended against imposition of a duty of care in circumstances such as the present. [213] He contended further that it would not be fair, just or reasonable to impose such a duty on all policy makers. He argued in addition that it would be inconsistent with the scheme of the Local Government Act 2002 to impose a duty of care that prevented or inhibited the making of decisions in accordance with the current interests of relevant communities, because of the absence of an express disclaimer about the possibility of change to an earlier policy decision. [214] The second broad thrust of Mr Goddard's submissions was that there had been no "mis-statement" in this case because the statements that had been made were all correct. The omission of a disclaimer had not rendered them false or misleading.[215] Finally, on the question of recoverable loss, Mr Goddard repeated in this context submissions made in respect of the other causes of action that the plaintiffs were effectively trying to recover by this proceeding loss which, properly characterised, amounted to an expectation loss, irrecoverable in tort.Plaintiffs' argument[216] Mr Hassall also referred to the Court of Appeal's decision in Rolls-Royce New Zealand Ltd v Carter Holt Harvey Ltd noting the broad range of considerations reviewed in that judgment applicable to determining whether or not a new duty of care should be recognised. Mr Hassall submitted that, to succeed in its argument that there was no duty of care, the defendant would need to satisfy the Court that there was no sufficient proximity, the loss sustained by the plaintiffs was not foreseeable and that there were relevant policy considerations which ruled out recognition of a duty of care. That would have to be done in circumstances where evidence had only been adduced by affidavit on the defendant's interlocutory applications. He submitted that the Court could not be satisfied by the defendant's argument on any of these issues. He argued that the question of whether or not a duty of care was owed could only be properly determined after a full hearing of the evidence, and the issues were not suitable for determination on a summary judgment application. If that submission were rejected, then proper application of the relevant indicia in theRolls-Royce decision favoured imposition of a duty of care in these circumstances. [217] Mr Hassall referred also to the decision of the Court of Appeal in Meates v Attorney-General [1983] NZLR 308 as a case in which the Government was found to have owed a duty of care to shareholders of a company that had established industries on the West Coast in the expectation of Government assistance after correspondence and discussions with the Prime Minister and other Ministers. In the view of the majority, the joint purpose of the parties in developing the new business venture, and the "practical alliance in which they joined to promote it" resulted in such a relationship of "proximity or neighbourhood" that the Government had a clear duty to be careful in its predictions of official help or the advice given to theshareholders in the company. (per Woodhouse P and Ongley J, at 334). At 378, Cooke J reached the same conclusion. He put it in the following way:The Government of the day and the shareholders were acting together in a major project of regional development. To call it a partnership or joint venture would not be accurate, but there was a distinct analogy. Prima facie, to answer Lord Wilberforce's first question, there was a sufficient relationship of proximity or neighbourhood such that, in the reasonable contemplation of the Government, carelessness on its part might be likely to cause damage to the shareholders.[218] On the question of whether, if there was a duty, the duty had been breached, Mr Hassall submitted that the defendant had promised to freehold the properties, that having made the promise without any qualification, the Council had then repudiated it. This, he maintained, was sufficient to constitute a breach of the duty of care that had been owed. [219] Mr Hassall argued that a disclaimer had been needed if the words that the Council had used were not to result in a belief that the freeholding policy would be implemented. Members of the public hearing what a public body says or writes will assume that they can safely rely upon what is said or written. Contrary to Mr Goddard's contentions, he submitted that it is fair, just and reasonable to expect policy makers, when announcing their policy, to word such announcements so as not to cause the ratepayers to believe reasonably that they can safely rely on the wording used, if it is not intended that they should be able to. [220] As to the Council's duties under the Local Government Act 2002, Mr Hassall submitted that there was nothing stopping the defendants from following the processes required by the legislation so as to put itself in the position of being able to lawfully dispose of the freehold, other than political pressure. [221] Responding to Mr Goddard's submission that there had been no "mis- statement" in this case, Mr Hassall apparently conceded that the statements had been correct when made. However, he pointed out that for the breach of the duty of care alleged, the plaintiffs were relying not only on the statements made, but the Council's subsequent repudiation of them. It was that subsequent repudiation that had rendered the earlier statements false and misleading.[222] Finally, on the issue of loss, Mr Hassall repeated his submissions made in the context of the other causes of action that what was sought was in fact the recovery of losses resulting from the plaintiffs' reliance on the Council's promises.Discussion[223] In Rolls-Royce New Zealand Ltd v Carter Holt Harvey Ltd, the Court of Appeal observed at [58]:The ultimate question when deciding whether a duty of care should be recognised in New Zealand is whether, in the light of all the circumstances of the case, it is just and reasonable that such a duty be imposed. The focus is on two broad fields of inquiry, but these provide only a framework rather than a straightjacket. The first area of inquiry is as to the degree of proximity or relationship between the parties. The second is whether there are other wider policy considerations that tend to negative or restrict or strengthen the existence of a duty in the particular class of case. At this second stage, the Court's inquiry is concerned with the effect of the recognition of a duty on other legal duties and, more generally, on society.[224] At [59] the Court noted that the inquiry into proximity was concerned with the nature of the relationship between the parties, and involved consideration of the degree of analogy with cases in which duties had already been established. It was said that Courts should only move "gradually" to impose duties in new circumstances, and a consideration of factors that have influenced earlier decisions would ensure that any development of the law occurred in a principled and cohesive manner. [225] I assume that Mr Hassall's reliance on Meates v Attorney-General was an attempt to draw an analogy to a case where a duty had been held to exist in relation to government advice in relation to policy matters in circumstances where a relationship was sufficiently proximate to give rise to a duty of care. Having said that, however, it is plain that the degree of involvement and inter-action between the Government representatives and the plaintiffs in that case was much more extensive than in the present case. Nor could it be said here that there was a "practical alliance" between the parties to secure the freeholding of the subject land. Rather, as I have earlier emphasised in this judgment, the Council's freeholding policy was from an early stage dependent on the passage of the Bill and as discussions about theBill developed, it was apparent that the Council had to have regard to a range of interests, not only those of the leaseholders, but also Te Atiawa and indeed, central government. The relationship between the parties was well short of the degree of proximity which applied in the Meates case. That in itself would not be determinative, however, especially in the context of interlocutory applications such as these where, as Mr Hassall pointed out, there can be distinct dangers in shutting out a claim which has not been the subject of full evidence at a substantive trial. Reference to the other kinds of considerations that the Court of Appeal thought relevant to the proximity inquiry, however, does tend against the suggestion that there should be a duty of care in the current circumstances, notwithstanding Mr Hassall's submissions to the contrary. [226] One such consideration involves the extent to which those in the plaintiffs' position are vulnerable such as where a defendant with special skills has power over a vulnerable plaintiff. That is not the present case. Notwithstanding Mr Hassell's characterisation of the plaintiffs as persons not experienced in local Government affairs, the submissions that some of them made to the Council and which I have earlier mentioned show that they appreciated the difficulties that the Council faced with the Bill. I do not consider they are to be described as "vulnerable" in the sense referred to by the Court of Appeal. [227] As to the nature of loss alleged, the Court of Appeal pointed out at [63] that the Courts have been less willing to impose a duty of care where the loss alleged is of an economic nature than where there is physical damage to property. Again, applied to the present case, that consideration is not an indication that a duty of care should be imposed. [228] Another consideration relevant in accordance with the discussion in Rolls- Royce New Zealand Ltd v Carter Holt Harvey Ltd is the statutory and contractual background that applies. It is a factor that can tend both towards and against a finding of proximity. As observed at [64], the statutory and contractual background may raise wider policy issues, and so tend to merge with the second of the two stage approaches, with the boundary between proximity and policy tending to merge. That is plainly so in the present case. The Council was operating at all times under therelevant local government legislation. The extensive procedures upon which it embarked in 2002 which led ultimately to the reversal of the freeholding policy reflected in a real way the Council's obligations under the Local Government Act 2002. In such a setting, the suggestion that a Council having originally announced a policy is contemporaneously under some duty to point out to the citizens that the policy might subsequently change, is as Mr Goddard submitted, both potentially far- reaching and of very significant consequence. There would be a danger too that imposition of such a duty might inhibit both the processes leading to and the substantive content of decisions which Councils are required to make having regard to statutory criteria. It would not be a legitimate approach to say, as Mr Hassall implied, that the Council could go through the various consultative steps required with a predetermined view of the outcome. That would mean that the consultation was not real, and defeat the plain statutory purpose. [229] I accept that the regime which applied prior to enactment of the Local Government Act 2002, in other words during the period upon which most of the facts on which the plaintiffs now rely arose, consisted of a less detailed set of rules than those contained in the Local Government Act 2002. However, when deciding whether or not a new duty of care should be imposed, it seems to me that in having regard to the statutory background, as Rolls-Royce New Zealand Ltd requires, reference should be made to the latest expression of the legislative policy in this field. [230] Whether the assessment is made for the purposes of ascertaining whether there was sufficient proximity, or whether the inquiry is made at the second stage, I consider that the wider policy considerations tend against the existence of a duty of care such as the plaintiffs allege in this case. Notwithstanding Mr Hassall's warnings about the dangers inherent in making such a finding at an interlocutory stage, I would if necessary be prepared to rule accordingly. However, in this case I do not need to do so because I consider that the plaintiffs' case must inevitably fail for another reason. That is, that it is not possible to point to any negligent act on the part of the Council.[231] If, as the plaintiffs themselves appear to accept, when the various statements and letters upon which they rely were made it was the Council's then belief that the freeholding policy would be carried to fruition, I cannot see any room for a conclusion that the Council acted negligently. At this point, of course, Mr Hassall repeated in respect of this cause of action, the argument that was advanced in respect of the Fair Trading Act claim. That is to say, as he puts it, the plaintiffs rely not only on the statements about the freeholding policy, but also on their subsequent repudiation by the Council. The conduct impugned therefore is both the original adoption and support for the freeholding policy repeated over the years, combined with the steps that the Council subsequently took to change the policy. [232] I have already rejected that argument in the context of the Fair Trading Act claims. I consider that the argument has even less merit in the context of allegations of negligent mis-statement. I consider that such allegations must establish that they were negligent at the time they were made and I cannot see any logical basis by which a statement that was not negligently made at the time may subsequently become negligent because of later events. Here, the various statements on which the plaintiffs base their claim were all clearly made in circumstances where the Council expected to proceed with the freeholding policy if the local bill were able to be passed. Subsequently, acting appropriately and in accordance with the necessary statutory procedures, a later Council resolved to change the policy. The later change of policy did not mean that anything said earlier was negligently said.Conclusion[233] On this basis I would hold that the plaintiffs cannot succeed on this aspect of their case as well. Having reached that conclusion, once again I do not need to go into the issues raised by Mr Goddard in relation to the nature of the loss which the plaintiffs seek to recover.Result[234] For the reasons I have given, I have concluded in the case of each of the three causes of action that the plaintiffs would be unable to succeed at trial. As earlier explained, that conclusion has been reached on the basis of an amended statement of claim that the plaintiffs filed following the first part of the hearing giving rise to this judgment. There was no suggestion by the plaintiffs that there was any other way in which their claims could be repleaded so as to give rise to an arguable claim based on the relevant facts. Nor was there any suggestion, as I have earlier observed, that some material fact existed which had been omitted from the amended statements of claim. In accordance with what the Court of Appeal said in Westpac Banking Corporation v M M Kembla New Zealand Ltd [2001] 2 NZLR 298 at [62], I consider that the abbreviated interlocutory procedure and the affidavit evidence have sufficiently exposed the relevant facts and legal issues. [235] In the circumstances, the requirements of r 136(2) have been satisfied, and there will be judgment for the defendant against the plaintiff in respect of the present claims. It is unnecessary in the circumstances to make any formal order on the application to strike out. I make it plain, however, that the same considerations that I have relied on in respect of the summary judgment application would have led me to allow the strike out application had it been necessary to do so.Costs[236] The defendant is also entitled to its costs. [237] The Council has sought costs on a Category 3C basis in respect of each of the six proceedings which have been the subject of argument. That claim is justified on the basis of the importance of the proceedings, the significance of the legal issues raised and the fact that more than the normal preparation time was required for the hearing given the "test case" nature of the application and the implications of the Court's decision for the other proceedings which have been filed.[238] The Council has also sought an order for indemnity costs in respect of the steps taken in the proceedings since 21 March 2007. That claim is advanced on the basis that such an order would be warranted either by r 187(8) of the High Court Rules or by r 48C(4)(a). The former provides for a party amending its pleadings to bear the costs occasioned by the original pleading. Mr Goddard submits that where an indulgence is sought, as in the present case to take steps out of time, the usual practice is that costs arising as a result of that indulgence be met by the parties seeking it. His submission presupposes that anything necessary to be done in defence of the original applications for summary judgment or to strike out should have been done well in advance of the hearing in March 2007. He points out that after the defendant's interlocutory applications were made on 12 December 2006, the plaintiffs had some three months to take the necessary steps. In those circumstances the post hearing amendments represented a serious failure to comply with the rules relating to the filing of notices of opposition, affidavits and submissions as well as the "spirit" of the "test case" direction. They necessitated what he described as the extraordinary step of reopening a concluded hearing. Alternatively, indemnity costs were justified under r 48C(4)(a) or (f) on the grounds that raising the issue of amendment after conclusion of the hearing, rather than in advance, was improper. [239] Mr Hassall accepted that Category 3C was appropriate, but argued that there should only be one award of costs on that basis and not six. He pointed out that much of the work involved must have related to all six proceedings and the need to consider each proceeding separately was limited. He further argued that an order for indemnity costs in respect of the steps taken since 21 March 2007 would not be justified. As to r 187, no indulgence had been required, because the plaintiffs were simply exercising their right under r 187(1) to amend their pleading at any time before trial. Insofar as r 187(8) is concerned, he pointed out that the wording employed is that the party filing the amended pleading "shall bear all the costs of and occasioned by the original pleading and any application for amendment, unless the Court otherwise orders". He contended that the costs envisaged were those referrable to the original replaced pleading and the costs associated with the application for amendment.[240] As to r 48C(4)(a) or (f), he pointed out that the former only applies where a party has acted "vexatiously, frivolously, improperly or unnecessarily in commencing, continuing or defending a proceeding or a step in a proceeding". Here there was nothing improper in the notification that counsel intended to review the pleading and exercise the right to amend it if appropriate. [241] I agree with Mr Hassall that it would be inappropriate for the defendant to achieve an award of costs in its favour on a Category 3C basis in respect of all six test cases. Inevitably, there would be an extensive doubling up of costs if that approach were taken. As this judgment shows, there was a practical identity of issues between the six proceedings, although to some extent there were minor differences between them. The argument proceeded on the basis that all six proceedings could essentially be dealt with together and that is what took place over the three days of the hearing. [242] Nor do I consider that the defendant should have indemnity costs in respect of the steps taken after 21 March. I accept that there is force in Mr Goddard's submission that the course followed was at least contrary to the "spirit" of the way that the matter had been approached by the parties on a co-operative basis down to that point. Nevertheless, if counsel took the view that the argument that had taken place on 20 and 21 March had exposed some possible flaws in the plaintiffs' position, the responsible course to follow was to carry out the review and file amended pleadings as Mr Hassall then foreshadowed would be done. [243] It is correct, as Mr Goddard submitted that an application by a defendant seeking summary judgment must be made at the time a statement of defence is served on the plaintiff. Consequently, there is no proper basis for a submission made by Mr Hassall that the defendant had brought increased costs upon itself by the timing of its summary judgment application, made at a stage when the plaintiffs could amend their pleadings as of right. There is also force in Mr Goddard's submission that the plaintiffs had ample time to put their house in order before the hearing on 20 and 21 March.[244] In the end, having regard to all of the circumstances, I am of the view that the fair way of dealing with the costs issue is to direct that: a) the plaintiffs pay the defendant's costs on a Category 3C basis calculated in respect of one of the test cases, but; b) there be increased costs calculated in the sum of 10 per cent to reflect the fact that there were six sets of proceedings, six sets of papers had to be filed and there was a degree of further preparation required for the second stage of the hearing solely attributable to the need to compare the amended statements of claim and counsel for the plaintiffs' submissions with those that had been made at the previous hearing. For this part of the order I rely on r 46C(3)(d); and c) the plaintiffs must also pay the defendant's disbursements. [245] The defendant is entitled to judgment and costs accordingly.