STAFFORD v ATTORNEY-GENERAL [2018] NZCA 490

STAFFORD v ATTORNEY-GENERAL [2018] NZCA 490 [12 November 2018]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA240/2018[2018] NZCA 490BETWEEN RORE PAT STAFFORDApplicantAND ATTORNEY-GENERALFirst RespondentACCIDENT COMPENSATIONCORPORATIONSecond RespondentCourt: Winkelmann and Clifford JJCounsel: K S Feint and M S Smith for ApplicantD J Goddard QC and J R Gough for First RespondentD A Laurenson QC and R L Roff for Second RespondentJudgment:(On the papers)12 November 2018 at 2.15 pmJUDGMENT OF THE COURTA The application for the proceedings in CIV-2018-485-341 to be transferredto this Court and heard with the appeal in CA125/2018 is declined.B There is no order for costs.____________________________________________________________________REASONS OF THE COURT(Given by Clifford J)Introduction[1] This is an application by Mr Stafford, pursuant to s 59 ofthe Senior Courts Act 2016, to transfer judicial review and declaratory judgmentproceedings (the Judicial Review proceedings) commenced in the High Court on10 May 2018 to this Court.Background[2] The background to this application is complex. It is found in the decision ofthe Supreme Court in Proprietors of Wakatū v Attorney-General,1 and in the varioussteps Mr Stafford has taken since that decision to protect the benefit of the fiduciaryduties the Supreme Court found the Crown owed to Māori.[3] In Wakatū, the Supreme Court found that the Crown owed fiduciary duties toreserve 15,100 acres of land ("the Nelson Tenths") for the benefit of the Māoricustomary owners of Nelson from a grant of land to the New Zealand Company knownas the Spain award. The Supreme Court remitted Mr Stafford's claim(the Fiduciary Duty claim) to the High Court for determination of liability, loss andremedy.[4] Following the Supreme Court decision in Wakatū Mr Stafford, supported bythe Wakatū Incorporation, has taken various steps to identify and protect "Crown land"in the Nelson area as a source of possible redress in the future. As part of that, certainarrangements have been agreed on a without prejudice basis between Mr Stafford andthe Crown involving what is described as "early warning system" as regards thepossible disposal of "core" Crown land. In Mr Stafford's view, that arrangement isinsufficient, given the Supreme Court's finding of fiduciary duties.[5] More specifically, Mr Stafford registered a caveat against certain land inNelson owned by the Accident Compensation Corporation (the ACC property).He did so because, at the time, ACC had entered into a contract to sell that land.Mr Stafford's caveat recorded that he had a beneficial interest in the ACC property1 Proprietors of Wakatū v Attorney-General [2017] NZSC 17, [2017] 1 NZLR 423.because ACC "is subject to a sufficient degree of ministerial control that it comprisesan instrument of executive government and as such [ACC] constitutes the Crown forthe purposes of the beneficial interest the Caveator claims in the land". The caveatwas subsequently registered by Mr Stafford.[6] A removal application came before the High Court in February this year, withjudgment on 22 February.2[7] The High Court first found that it was arguable the ACC property could be usedto settle possible Crown liabilities arising from the Crown's failure to reservethe Nelson Tenths. In doing so, Collins J reasoned, with reference to the decision ofthe Supreme Court in Ririnui v Landcorp Farming Ltd3 and various provisions ofthe Crown Entities Act 2004, that it was reasonably arguable the responsible Ministercould issue a direction to ACC forbidding the sale of any land held by ACC that wasthe subject of a claim by Māori on the basis that such lands may be used by the Crownto settle such claims.4 Alternatively, a similar direction might be able to be given unders 107(1)(e) of the Crown Entities Act.5[8] Collins J then found, however, Mr Stafford could not maintain a caveatableinterest in that land because — everything else aside — it could not be said he derivedany interest in that land from ACC.6[9] Notwithstanding that finding, Collins J stayed the effect of his decision toremove Mr Stafford's caveat. In doing so he explained:[97] I do not, however, wish to see Mr Stafford and his supporters deprivedof an opportunity to persuade the Minister or Ministers to issue a direction ordirections of the kind I have described in [82], which may ultimately result ina solution that achieves for Mr Stafford everything that he is endeavouring toachieve through his caveat. To achieve this possible outcome, I will exercisethe discretion conferred by s 143 of the Land Transfer Act and keep in forceMr Stafford's caveat over the ACC property until 22 March 2018. Althoughthis creates a very tight timeframe for the Minister or Ministers to make adecision, it would be preferable if this aspect of Mr Stafford's dispute wereable to be resolved through Ministers exercising their statutory powers.2 Accident Compensation Corporation v Stafford [2018] NZHC 218, [2018] 2 NZLR 861.3 Ririnui v Landcorp Farming Ltd [2016] NZSC 62, [2016] 1 NZLR 1056.4 Accident Compensation Corporation v Stafford, above n 2.5 At [82].6 At [94].[10] Mr Stafford has appealed Collins J's caveat decision (the Caveat Appeal).Mr Stafford has also endeavoured to persuade the Government to issue directions ofthe kind described by Collins J at [82] of his judgment. Those actions led to the filingof the Judicial Review proceedings discussed below.The Caveat Appeal[11] Mr Stafford filed the Caveat Appeal in this Court on 12 March 2018.Mr Stafford's grounds of appeal are:1. The Judge erred in fact and in law in finding that there was noreasonably arguable case that the appellant has a caveatable interestin [the ACC property].2. It is reasonably arguable that:2.1 All Crown land within the Spain award area is, to the extentof the shortfall in the 15,100 acres resulting from the Crown'sbreach of its fiduciary duties, held subject to the equitableinterests of the Māori customary owners represented by theappellant; and2.2 As the respondent is an instrument of executive government,being a "Crown agent" subject to ministerial control pursuantto the Crown Entities Act 2004, [the ACC property] isCrown land for the purposes of the fiduciary duty proceeding,and accordingly, the appellant has equitable interests inrelation to the entire property.[12] By way of relief, Mr Stafford seeks an order from this Court that the caveat isto remain on the title to the ACC property pending the final determination ofthe Fiduciary Duty claim.[13] ACC has cross-appealed on a range of grounds. In summary, it says the Judgeerred in determining it was reasonably arguable responsible Ministers could issuedirections of the kind envisaged by the Judge at [82] of his judgment. The Judge alsoerred in exercising the residual discretion to keep the caveat in force, again because itwas not reasonably arguable that the Ministers could issue the directions envisaged.ACC will also support Collins J's judgment on different grounds. In essence, ACC isa separate legal entity from the Crown and it would be wrong to find that third parties,such as Mr Stafford, were entitled to satisfy private law claims against the Crown byhaving access to property owned by ACC. Moreover, that part of the ACC propertythat had originally been set aside as part of the Nelson Tenths had subsequently beentransferred by the Public Trustee. There had been no claim of any breach of duty asregards that land. The balance of the ACC property had never been part ofthe Nelson Tenths, and there was no reasonable basis for arguing the Crown hadbreached any duty in relation to that land.[14] In the meantime, Collins J has issued a stay of his caveat decision, pending thedetermination of Mr Stafford's Caveat Appeal.7 For its part, ACC sought an urgenthearing of that appeal. In a minute of 25 June, Cooper J directed that the question ofurgency should be addressed after the application to transfer the Judicial Reviewproceedings from the High Court to this Court had been determined.The Judicial Review proceedings[15] As part of his efforts to persuade the Government to issue directions,Mr Stafford first wrote to the Attorney-General on 23 February 2018. He askedthe Attorney-General to help in having the responsible Minister make the declarationsenvisaged by Collins J.[16] On 1 March 2018, the Attorney-General expressed the preliminary view thatthere was no power for such directions. Even if there was, he considered it would notbe appropriate to exercise that power to require ACC to breach a contract it had enteredinto with a third party who had dealt with ACC in good faith.[17] On 9 March, Mr Stafford's solicitors wrote again to the Attorney-General,repeating the request for directions and asking for a moratorium on land disposal bythe Crown, Crown agents and state-owned enterprises within the Spain award area,pending the resolution of the Fiduciary Duty claim.[18] The Minister replied on 29 March. He noted that as the agreement for the saleof the ACC property had been cancelled, that matter no longer required his attention.On the more general proposal of a moratorium, he indicated the request was underconsideration and that he would reply as soon as he was able.7 Accident Compensation Corporation v Stafford [2018] NZHC 488.[19] On 18 April, Mr Stafford's solicitors wrote to the Attorney-General advisinghim that, if a substantive response was not received by 27 April, Mr Stafford'sassumption would be that the Crown's position was it had no power to make thedirections sought to give effect to the requested moratorium. Mr Stafford would thenhave no option but to seek urgent declarations from the High Court challenging thatposition on the ground that it is erroneous in law.[20] On 27 April, the Attorney-General responded. He said no such assumptionmight be made. The Crown did not yet have a position on the issue. As soon asthe Crown did, the Attorney-General would be in touch.[21] On 10 May, Mr Stafford commenced proceedings in the High Court, seekingjudicial review of the Attorney-General's decision recorded in the letter of 27 April(the reviewable decision). As relevant Mr Stafford pleaded:38. The reviewable decision involved a failure to exercise a statutorypower or statutory power of decision in terms of the Judicial ReviewProcedure Act 2016; (further or in the alternative) a failure to exercisepublic power amendable to judicial review under Part 30 of theHigh Court Rules; or (further or in the alternative) a failure to exercisepublic power amendable to judicial review under the Common Law.Grounds for judicial review and/or declaratory judgments.39. The reviewable decision is erroneous in law. In particular:39.1 The Attorney-General as representative of the Crown(as fiduciary) has a legal power to make directions toprevent the disposal of any land withinthe Spain award area that is held today by the 'core'Crown (being Her Majesty the Queen and the centralgovernment ministries and departments listed inSchedule 1 of the State Sector Act 1988),Crown agents (being the Crown agents listed in Part1 of Schedule 1 of the Crown Entities Act, andincluding ACC) and SOEs (being the Stateenterprises listed in Schedule 1 of the State-OwnedEnterprises Act 1986), and extending to the ACCproperty, pending resolution of the fiduciary dutyproceeding ("the power"). The power is sourced in:(a) Section 103 of the Crown Entities Act;(b) Section 107 of the Crown Entities Act;(c) The principles of the Treaty of Waitangi, andthe duty of active protection that isconsequent upon the Crown's Article IIguarantee; and/or(d) The Crown's residual (or 'third source')freedom to act with the powers of the naturalpersons;39.2 In light of the decision of the Supreme Court in thefiduciary duty proceeding, the Attorney-General as arepresentative of the Crown (as fiduciary) has a dutyto exercise the power in a timely way ("theassociated duty"); and39.3 The associated duty has been breached bythe Attorney-General in his failure to exercise thepower by 9 May 2018, being over 14 months afterthe Supreme Court's decision was issued and twomonths after directions were first sought.[22] Declarations against the Attorney-General were sought accordingly.[23] A declaration was also sought that ACC should not dispose ofthe ACC property pending the resolution of the Fiduciary Duty proceedings, as wasan injunction to prevent that happening.The transfer application — analysis[24] On 14 May 2018 Mr Stafford applied to this Court to transferthe Judicial Review proceedings pursuant to s 59 of the Senior Courts Act.[25] Section 59 provides:Transfer of civil proceeding from High Court to Court of Appeal(1) A party to a civil proceeding in the High Court may apply for an ordertransferring the proceeding to the Court of Appeal.(2) In determining whether to make an order transferring the proceeding,the Court of Appeal must be satisfied that the circumstances of theproceeding are exceptional.(3) Without limiting subsection (2), the circumstances may beexceptional if—(a) the party to the proceeding intends to submit that a relevantdecision of the Court of Appeal should be overruled:(b) the proceeding raises an issue of considerable publicimportance that—(i) needs to be determined urgently; and(ii) is unlikely to be determined urgently if the proceedingis heard and determined by both the High Court andthe Court of Appeal:(c) the proceeding does not raise a question of fact or a significantquestion of fact, but raises a question of law that is the subjectof conflicting decisions of the Court of Appeal.(4) In deciding whether to make an order transferring the proceeding,the Court of Appeal must have regard to the following matters:(a) the primary purpose of the Court of Appeal as an appellatecourt:(b) the desirability of obtaining a determination of the proceedingin the High Court and a review of that determination onappeal:(c) whether a full court of the High Court could effectivelydetermine the question in issue:(d) whether the proceeding raises a question of fact or asignificant question of fact:(e) whether the parties have agreed to the transfer of theproceeding:(f) any other matter to which regard should be had in the publicinterest.(5) It is not a sufficient ground that the parties agree to the transfer.(6) The Court of Appeal has the jurisdiction of the High Court to hear anddetermine a proceeding transferred under this section.(7) The Court of Appeal may transfer back to the High Court a proceedingthat has been transferred to the Court of Appeal.[26] The approach to applications for transfer under now s 59 is reasonably wellestablished, and is reflected in the various statutory criteria. The circumstances of theproceeding must be exceptional. The circumstances may be exceptional if, as relevanthere, the proceeding raises an issue of considerable public importance that needs to bedetermined urgently and is unlikely to be determined urgently if the proceeding isheard and determined by both the High Court and this Court. The Senior Courts Actalso sets out a number of factors this Court must have regard to when considering anapplication for transfer.[27] At the beginning of its Wakatū judgment, the Supreme Court summarised theresult of the case.8 As relevant, that summary reads:[1] In accordance with the opinion of the majority comprising Elias CJ,Glazebrook, Arnold and O'Regan JJ, Mr Stafford has succeeded on theprincipal point on which his claim failed in the High Court. The majoritydecision in this Court is that the Crown owed fiduciary duties to reserve15,100 acres for the benefit of the customary owners and, in addition, toexclude their pa, urupa and cultivations from the land obtained by the Crownfollowing the 1845 Spain award. The appeal is allowed on this point andMr Stafford has been granted a declaration to that effect. Mr Stafford's claimmay therefore proceed in the High Court for determination of matters ofbreach and remedy.[4] A majority, comprising Elias CJ, Glazebrook, Arnold and O'Regan JJ,has held that Mr Stafford's claims are not barred by the Limitation Act 1950to the extent that they are within the terms of s 21(1)(b) of the Act becausethey seek to recover from the Crown trust property either in the possession ofthe Crown or previously received by the Crown and converted to its use.Any other issues relating to limitation, including the availability of alimitation defence to any claim for equitable compensation, are remitted forconsideration by the High Court. It will also be necessary for the High Courtto determine, once the facts as to breach and possible prejudice have beenfound, whether the claims are barred in application of the equitable doctrineof laches.[6] Findings of breach and as to the extent of any consequential losseswere not made in the High Court or Court of Appeal. The Court is not able tomake final determinations concerning liability, loss, and remedy in theabsence of primary findings of fact in the lower courts and in the absence offull submissions on these matters, which were not the focus of the presentappeal. While it is acknowledged by the Crown that 10,000 acres of the tenthsreserves awarded by Spain were never reserved, the extent of loss to thesuburban and town reserves is not clear. Nor is it clear to what extent thecustomary owners have been deprived of their occupied lands which shouldhave been excluded from the Crown land obtained following the Spain award.[7] Mr Stafford's claim is remitted to the High Court for determination ofremaining issues of liability, defence and relief, in accordance with theopinions of this Court.8 Wakatū, above n 1.[28] By any sense, the ongoing scope of the Fiduciary Duty claim is extensive, andof considerable novelty, complexity and public importance.[29] In the meantime, Mr Stafford in effect seeks interim relief.[30] He filed his caveat to preserve the status quo as regards the ACC property.In the Caveat Appeal he says it is reasonably arguable that all Crown land withinthe Spain award area is, to the extent of the shortfall from the Nelson Tenths resultingfrom the Crown's breach of its fiduciary duties, held by the Crown subject to theequitable interests of the Māori customary owners to whom those duties are owed andwhom he represents. He says further that as ACC is a Crown agent subject toministerial control pursuant to the Crown Entities Act, the ACC property isCrown land for the purposes of the Fiduciary Duty claim and, accordingly, is held byACC subject to those same equitable interests.[31] The Judicial Review proceedings were filed to determine the scope ofthe Crown's powers to itself preserve the status quo pending the outcome ofthe Fiduciary Duty claim. They have a broader scope than the Caveat Appeal. Theyaffect more land. Also, and as noted, they assert a broad legal power to makedirections to prevent the disposal of land within the Spain award area that is held todayby the Crown, such power being sourced in the Crown Entities Act, the principles ofthe Treaty of Waitangi and/or the Crown's residual freedom to act with the powers ofa natural person. It might be thought there can be little doubt that the Crown has thepower to place a moratorium on the sale of Crown land, as that concept is traditionallyunderstood, within that area. Accordingly, the "bite" of both sets of proceedings is asregards the broader category of Crown land that Mr Stafford asserts to be subject tothe duties recognised by the Supreme Court in Wakatū, for which enforcement is nowsought in the Fiduciary Duty claim in the High Court. That broader categoryparticularly relates to land held by what may be called emanations of the Crown, suchas ACC, that are not seen as part of the Crown, again as that term is traditionallyunderstood.[32] There is a further important distinction between the two sets of proceedings.In order to succeed in the Caveat Appeal, Mr Stafford need only show his claim isreasonably arguable. In the Judicial Review proceedings he seeks to establish thatthe Minister does in fact have a power to direct.[33] Turning then to the statutory criteria, we are satisfied that the circumstances ofthe proceeding are exceptional. In that regard, the Supreme Court's decision inWakatū speaks for itself. It first and foremost involved the recognition of fiduciaryduties binding the Crown which arose in 1845 and which, subject to the matters to bedetermined in the High Court proceedings, remain enforceable.[34] The ongoing proceedings in the High Court which the Supreme Court heldwere now necessary will themselves be exceptional. That a sufficient documentaryand oral historic record exists in order to meaningfully undertake those proceedingsmay also be regarded as an exceptional circumstance.[35] As noted, the essential questions the Judicial Review proceedings raise arewhether:(a) the Crown has the power to direct that various categories of Crownentities are to put a hold on the disposal of land they own within thearea of the Spain award; and(b) if that power exists, whether the Crown has in the current circumstancesa duty to exercise it.[36] All of that is aimed at the preservation in the hands of the Crown generally ofland once owned under customary title by Māori in the area of the Spain award (andwhich could have formed part of the Nelson Tenths). That is, the reservation of landwhich was the subject of the Crown's fiduciary duties.[37] That issue is one of considerable public importance: it goes to a properunderstanding of the concept of the Crown in New Zealand in the early 21st century,and the significance of the passage of the State-Owned Enterprises Act 1986 and ofvarious reforms to the structure of the public sector (including the passage ofthe Crown Entities Act).[38] But it is a separate question as to whether that is a matter which needs to bedetermined urgently. The Crown has not yet indicated a firm position on the nature orextent of any possible moratorium on sales of land within the area of the Spain award.It points to the difficulty and complexity of the issues involved. The terms on whichthe Supreme Court remitted the Fiduciary Duty claim to the High Court reflect thelegal and, in this context more relevantly, the factual complexity of the issues involved.The Supreme Court itself identified the importance of the inquiry as to breach andconsequential loss to be undertaken in the High Court as central to final determinationsof liability and remedy. Those findings would, we assess, provide important contextfor the determination of the issues raised by the Judicial Review proceedings.Moreover, the Fiduciary Duty claim involves complex and important issues that, inour view, will benefit from initial consideration in the High Court and the availabilityof two levels of appeal, and the refinement of issues that occurs in that process.[39] The issues raised by Mr Stafford's Judicial Review proceedings areconsiderably broader than those raised by the Caveat Appeal. The narrow ground onwhich Collins J made the decision challenged in the Caveat Appeal appears sound.Moreover, given that the Crown has not yet indicated a firm position on themoratorium question, it remains open for Mr Stafford and the first respondent to reachagreement on that matter.[40] Given those considerations, and also the lengthy history of these matters, weare not persuaded that the urgency criterion is satisfied. In reaching that view, we havealso had regard to the factors set out in s 59(4) and in particular the primary purposeof this Court as an appellate court.[41] In all the circumstances, we are therefore not satisfied that Mr Stafford'sJudicial Review proceedings should be transferred to this Court.Result[42] We decline the application for the proceedings in CIV-2018-485-341 to betransferred to this Court and heard with the appeal in CA125/2018.[43] There is no order for costs.Solicitors:Pitt & Moore, Nelson for ApplicantCrown Law Office, Wellington for First RespondentAccident Compensation Corporation, Wellington for Second Respondent