RORE PAT STAFFORD v ACCIDENT COMPENSATION CORPORATION [2020] NZCA 164

RORE PAT STAFFORD v ACCIDENT COMPENSATION CORPORATION [2020] NZCA 164 [15 May 2020]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA125/2018[2020] NZCA 164BETWEEN RORE PAT STAFFORDAppellantAND ACCIDENT COMPENSATIONCORPORATIONRespondentHearing: 17 April 2019Court: Gilbert, Williams and Courtney JJCounsel: K S Feint and M S Smith for AppellantD A Laurenson QC and R L Roff for RespondentJ R Gough for Attorney-General as IntervenerJudgment: 15 May 2020 at 10.30 amJUDGMENT OF THE COURTA The appeal is dismissed.B There is an order that the caveat be removed. That order is to lie in courtfor 20 working days. Leave is reserved to seek to vary that period.C The cross-appeal is dismissed.D The appellant must pay the respondent costs for a standard appeal on aband A basis, with certification for second counsel, plus usualdisbursements.____________________________________________________________________REASONSReasonsPara No.Gilbert J [1]Courtney J [36]Williams J (dissenting) [158]GILBERT JTable of ContentsIntroduction [1]Mr Stafford's claim [2]ACC land [11]The caveat [15]High Court judgment [16]Appeal and cross-appeal [19]Judicial review proceeding [22]AnalysisCan a direction under s 103 or s 107 of the Crown EntitiesAct be made to ACC not to sell the ACC land?[23]Section 443 — tenths reserve [24]Sections 442 and 439 — non-tenths reserves [29]Interest derived from ACC? [32]Introduction[1] This is an appeal against an order for removal of a caveat. The question iswhether Mr Stafford, the caveator, has a tenable claim to an interest derived fromthe registered proprietor in the particular land over which he has registered the caveat.1The land is situated in central Nelson and the Accident Compensation Corporation(ACC) is the registered proprietor of it (the ACC land).Mr Stafford's claim[2] Mr Stafford's claim to an interest in the ACC land arises in the context of hisclaim in separate proceedings currently before the High Court. In those proceedings,Mr Stafford claims that the Crown breached its fiduciary obligations to the customaryowners following the clearing of native title to a large tract of land in the greaterNelson region (of which the ACC land forms part) during the colonial period.1 Land Transfer Act 1952, s 137, the applicable provision at the time the caveat was lodged.Mr Stafford is kaumātua of Ngāti Rārua and Ngāti Tama and a descendent ofthe Māori customary owners of the land. He is pursuing the claim on their behalf.[3] Mr Stafford's claim that the Crown breached its fiduciary obligations tothe customary owners failed at first instance in the High Court2 and again on appealto this Court.3 However, Mr Stafford succeeded in his further appeal to the SupremeCourt.4 The Supreme Court found that the Crown owed fiduciary obligations tothe customary owners Mr Stafford represents.5[4] The following brief summary of Mr Stafford's breach of fiduciary obligationclaim (which is not focused on the ACC land) is drawn from the Supreme Court'sjudgment in Proprietors of Wakatū v Attorney-General, particularly the reasons ofElias CJ who set out the historical background in considerable detail.6[5] In 1839, William Wakefield agreed to purchase for the New Zealand Company(the Company) a vast area of land in the lower North Island and upper South Islandtogether comprising some 20 million acres.7 The purchase was agreed to bythe customary owners on the basis that one tenth of the land would be reserved to them(the tenths). The Company subsequently offered allotments to settlers, eachcomprising a one-acre town lot, a 50-acre suburban lot and a 150-acre rural lot.8[6] Following the signing of the Treaty of Waitangi in 1840 and the Land ClaimsOrdinance 1841, all pre-Treaty sales were declared null and void unless allowed bythe Crown. This would be dependent on commissioners confirming the purchases hadbeen made on equitable terms. Only upon receiving such confirmation would nativetitle be cleared, enabling the land to pass to the Crown.9[7] In 1845, William Spain, who had been appointed commissioner to investigatethe 1839 purchases, reported that the purchase of land in the Nelson districts had been2 Proprietors of Wakatū Inc v Attorney-General [2012] NZHC 1461.3 Proprietors of Wakatū v Attorney-General [2014] NZCA 628, [2015] 2 NZLR 298.4 Proprietors of Wakatū v Attorney-General [2017] NZSC 17, [2017] 1 NZLR 423.5 At [1].6 At [96]–[293].7 At [10]8 At [15].9 At [96]–[99].on equitable terms given the tenths reserves to be set aside for the customary ownersand the additional payments made to them.10 He recommended that the Company begranted 151,000 acres of land in the districts of Wakatū (Nelson) (11,000 acres alreadysurveyed), Waimea (38,000 acres already surveyed), Moutere (15,000 acres alreadysurveyed), Motueka (42,000 acres partly surveyed) and Massacre Bay (Golden Bay)(45,000 acres partly surveyed).11 However, all pā, urupā and cultivations (occupiedlands) were to be excluded from the purchase.12 This recommendation became knownas the Spain award and was issued under the Land Claims Ordinance on 31 March1845.13[8] The tenths reserves, comprising a total of 15,100 acres, included 100 one-acretown sections at Wakatū and 100 50-acre suburban sections at Moutere and Motueka.These sections had been surveyed and selected by August 1842, prior to the issuanceof the Spain award in 1845.14 The remaining tenths reserves, the larger rural reserves,had not been fully surveyed and selected at that stage.15 All occupied lands were tobe excluded, with title to this land remaining with the relevant customary owners.[9] Mr Stafford says that the Crown breached its fiduciary obligations tothe customary owners by failing to reserve some of these lands. Specifically,Mr Stafford claims the Crown breached its fiduciary duty to the customaryowners by:16(a) failing to reserve the rural sections comprising 10,000 acres;17(b) failing to exclude all occupied lands;1810 At [149]–[155].11 At [153].12 At [152].13 At [149].14 At [125].15 At [28].16 At [419].17 At [228].18 At [34] and [134]–[135].(c) reducing the suburban tenths reserves by exchanges before 1882,primarily as a consequence of failing to exclude occupied lands inthe selection of suburban reserve sections;19(d) reducing the number of town reserve sections from 100 to 53, approvedby Governor Grey without lawful authority in 1847;20 and(e) Governor Grey granting 918 acres of suburban tenths reserve land atWhakarewa to the Bishop of New Zealand for a school in 1853.21[10] The Supreme Court upheld Mr Stafford's claim that the Crown owed fiduciaryobligations to reserve 15,100 acres of land for the benefit of the customary ownersand, in addition, to exclude the occupied lands.22 The Crown acknowledged thatthe intended rural reserves of 10,000 acres were never reserved. However, the Courthad insufficient information to enable it to determine remaining questions of liability,defence and relief and accordingly remitted the matter back to the High Court todetermine these issues.23ACC land[11] The ACC land comprises 11 parcels of land in seven titles. Five parcels are onone of these titles. These five parcels form part of what was section 443 which hadbeen selected in 1842 and set aside as one of the town tenths reserves. The other sixparcels, each on a separate title, were not included in the original 100 town tenthssections. Two of these six parcels originally comprised section 442 and the other fourparcels formed part of the original section 439. Sections 443 and 442 are adjoiningsections. Section 439 is next to section 442 but separated by Morrison Street.The point to note here is that while section 443 can be regarded as a specific trust asset(by virtue of its inclusion in the town tenths reserves) to be held by the Crown andadministered for the benefit of the customary owners, sections 442 and 439 were notin that category.19 At [158], [266] and [280].20 At [168]–[169].21 At [269].22 At [1].23 At [6]–[7].[12] Section 443 was not one of those town tenths reserve sections relinquishedwith Governor Grey's approval when the total number was reduced from 100 to 53 in1847. It does not therefore fall within the scope of Mr Stafford's claim summarisedat [9(d)] above. Section 443 and the other tenths reserves were administered first bythe Board of Management of Native Reserves and then the Commissioner of CrownLands prior to administration being passed to the Native Reserves Commissionersunder the Native Reserves Act 1856. Administration then passed to the Public Trusteepursuant to s 8 of the Native Reserves Act 1882. The tenths reserves wereadministered by the Public Trustee until 1920, when the Native Trustee (later knownas the Māori Trustee), took over administration pursuant to s 13 of the Native TrusteeAct 1920.[13] Part of section 443 (not forming part of the ACC land) was transferred bythe Māori Trustee to the Nelson Club in 1969. In 1970, the Māori Trustee transferredanother part of section 443 (which forms part of the ACC land) to Newman Bros Ltd.The remaining part of section 443 was transferred to the Proprietors of Wakatū Incin 1977.[14] ACC acquired the ACC land for investment purposes in October 2008.ACC subsequently entered into an agreement to sell the property with settlement totake place on 31 January 2018. On becoming aware of the sale, Mr Stafford lodgeda caveat against the seven titles to the ACC land to prevent any dealings with it.The caveat[15] The caveat relevantly reads:Estate or Interest Claimed by the Caveator1. The Caveator claims a beneficial interest in the Registered Proprietor's landdescribed in Schedule A attached (the "Land") by virtue of a trust express orimplied in respect of the Land held by the Registered Proprietor as trustee forthe benefit of the Caveator as beneficiary.2. The Caveator's beneficial interest in the Land is recognised in the SupremeCourt judgment of Proprietors of Wakatū et al v Attorney-General [2017]NZSC 17.3. The document attached as Schedule B sets out the connection betweenthe interest claimed by the Caveator and the Registered Proprietor.4. The Caveator also relies on Proprietors of Wakatū v Attorney-General[2014] NZHC 1785, in which the High Court found (in relation to other landat issue in the same proceedings) that there was a reasonably arguable claimto a beneficial interest sufficient to sustain the caveats on those titles.5. In Proprietors of Wakatū et al v Attorney-General [2017] NZSC 17:a) The majority (Elias CJ, Glazebrook J, and Arnold and O'Regan JJ) foundthat land vested in the Crown in 1845 was obtained by the Crown on the termsof the Spain award and that the Crown owed fiduciary duties to the customaryland owners in respect of that land:i. To reserve 15,100 acres of land within those areas of Wakatū (Nelson),Waimea, Moutere, Motueka and Massacre Bay (Golden Bay) subject tothe Spain award for the benefit of the customary land owners ("TenthsReserves"); andii. To exclude the customary land owners' pā, urupā and cultivations fromthe land obtained by the Crown as part of the Spain award ("OccupiedLands").b) The majority found that the Crown owed fiduciary duties to the customaryland owners and concluded that if the Crown is found to have breached itsfiduciary duties then, to the extent that the Caveator claims recovery of Crownland that should have been part of the Tenths Reserves as envisaged bythe Spain award, but was not included in those reserves, or was included andthen removed, an institutional constructive trust would arise (which in turnmeans that it comes within the trust property exception set out in s 21(1)(b) ofthe Limitation Act 1950). c) The majority acknowledged the Caveator's right and standing asbeneficiary of the Tenths Reserves to claim relief for breach of trust orfiduciary duty (Emphasis added)High Court judgment[16] ACC applied to the High Court under s 143 of the Land Transfer Act 1952 foran order removing the caveat from the titles. The application was granted by Collins Jwho found that Mr Stafford had no reasonably arguable interest in the land.24The Judge considered it was reasonably arguable that the ACC land could be used tosettle Crown liabilities established by Mr Stafford's claim. This was becauseresponsible Ministers could give directions under ss 103 and 107 of the Crown EntitiesAct 2004 which would not offend the restriction in s 113(1)(b) of that Act.25However, the Judge took the view that Mr Stafford did not have a caveatable interestin the ACC land, reasoning:26The unexercised ministerial powers of direction I have explained in Part II donot give Mr Stafford a caveatable interest in this case. This is becauseMr Stafford could not establish a beneficial interest in the land unlessMinisters assert their control over ACC. In that respect, Mr Stafford is inmuch the same position as a discretionary beneficiary of a trust, who also lacksa caveatable interest in trust property.24 Accident Compensation Corporation v Stafford [2018] NZHC 218, [2018] 2 NZLR 861 at [4].25 At [81]–[87].26 At [94].(Footnote omitted)[17] Nevertheless, the Judge considered he had discretion under s 143 of the LandTransfer Act to maintain the caveat even though no arguable interest in the land hadbeen shown. The Judge exercised this discretion temporarily to enable the Ministersto consider whether to exercise their powers of direction under the Crown EntitiesAct.27 No such direction has been given.[18] The Judge subsequently granted a stay so that the caveat could remain in placepending appeal.28 The purchaser has since cancelled the sale and purchase agreementwith ACC.Appeal and cross-appeal[19] Mr Stafford appeals the High Court finding that he has no caveatable interestin the ACC land. He contends that all Crown land within the original 151,000 acresin the wider Nelson region is held subject to the interests of the customary owners tothe extent of the shortfall in the 15,100 acres of the tenths reserves. Mr Stafford arguesthat ACC is an instrument of the executive government, being a Crown agent subjectto ministerial control pursuant to the Crown Entities Act. Mr Stafford says the ACCland is therefore Crown land in respect of which he has an equitable interest.[20] ACC cross appeals and seeks to support the judgment on other grounds.In summary, ACC contends:(a) it is not reasonably arguable that responsible Ministers could issuea direction of the type contemplated by the Judge under either s 103 ors 107 of the Crown Entities Act;(b) the fiduciary obligations recognised by the Supreme Court in Wakatūare owed by the Crown, not ACC which is a separate legal entity;(c) Mr Stafford does not have an equitable interest in the ACC land; and27 At [97].28 Accident Compensation Corporation v Stafford [2018] NZHC 429 [Result]; andAccident Compensation Corporation v Stafford [2018] NZHC 488 [Reasons].(d) there is no residual discretion in s 143 of the Land Transfer Act tosustain a caveat where no reasonably arguable caveatable interest hasbeen shown.[21] The Attorney-General has intervened and supports ACC's position.Judicial review proceeding[22] Following the caveat hearing in the High Court, Mr Stafford issued furtherproceedings in the High Court seeking declarations that the Attorney-General,as representative of the Crown, has a duty to exercise the powers of direction underss 103 and 107 of the Crown Entities Act in a timely way and has breached that duty.Mr Stafford applied for an order transferring the judicial review proceeding tothis Court so it could be heard at the same time as the present caveat appeal.This Court declined that application, noting the complexity of the issues arising inthe judicial review proceeding as compared with the narrow ground on which Collins Jhad found there was no caveatable interest in the ACC land:29[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.They affect more land. Also, and as noted, they assert a broad legal power tomake directions to prevent the disposal of land within the Spain award areathat is held today by the Crown, such power being sourced in the CrownEntities Act, the principles of the Treaty of Waitangi and/or the Crown'sresidual freedom to act with the powers of a natural person. It might bethought there can be little doubt that the Crown has the power to placea moratorium on the sale of Crown land, as that concept is traditionallyunderstood, within that area. Accordingly, the "bite" of both sets ofproceedings is as regards the broader category of Crown land that Mr Staffordasserts to be subject to the duties recognised by the Supreme Court in Wakatū,for which enforcement is now sought in the Fiduciary Duty claim in the HighCourt. That broader category particularly relates to land held by what may becalled emanations of the Crown, such as ACC, that are not seen as part ofthe Crown, again as that term is traditionally understood.[35] As noted, the essential questions the Judicial Review proceedings raiseare whether:29 Stafford v Attorney-General [2018] NZCA 490.(a) the Crown has the power to direct that various categories ofCrown entities are to put a hold on the disposal of land theyown within the area of the Spain award; and(b) if that power exists, whether the Crown has in the currentcircumstances a duty to exercise it.[36] All of that is aimed at the preservation in the hands of the Crown generallyof land once owned under customary title by Māori in the area of the Spainaward (and which could have formed part of the Nelson Tenths). That is,the reservation of land which 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 21stcentury, and the significance of the passage of the State-Owned EnterprisesAct 1986 and of various reforms to the structure of the public sector (includingthe passage of the Crown Entities Act).[38] But it is a separate question as to whether that is a matter which needs tobe determined urgently. The Crown has not yet indicated a firm position onthe nature or extent of any possible moratorium on sales of land within the areaof the Spain award. It points to the difficulty and complexity of the issuesinvolved. The terms on which the Supreme Court remitted the Fiduciary Dutyclaim to the High Court reflect the legal and, in this context more relevantly,the factual complexity of the issues involved. The Supreme Court itselfidentified the importance of the inquiry as to breach and consequential loss tobe undertaken in the High Court as central to final determinations of liabilityand remedy. Those findings would, we assess, provide important context forthe determination of the issues raised by the Judicial Review proceedings.Moreover, the Fiduciary Duty claim involves complex and important issuesthat, in our view, will benefit from initial consideration in the High Court andthe availability of two levels of appeal, and the refinement of issues that occursin that process.[39] The issues raised by Mr Stafford's Judicial Review proceedings areconsiderably broader than those raised by the Caveat Appeal. The narrowground on which Collins J made the decision challenged in the Caveat Appealappears sound. Moreover, given that the Crown has not yet indicated a firmposition on the moratorium question, it remains open for Mr Stafford andthe first respondent to reach agreement on that matter.AnalysisCan a direction under s 103 or s 107 of the Crown Entities Act be made to ACC not tosell the ACC land?[23] It will be apparent that one of the key issues in the judicial review proceedingis whether the Crown, acting through responsible Ministers, has the power to directCrown entities such as ACC not to sell land in the area covered by the Spain award.This Court having declined to transfer the judicial review proceedings so they couldbe determined in conjunction with the present appeal (because of their complexity andthe need for first instance consideration), I prefer not to express any views onthe issues raised in those proceedings unless it is necessary to do so to determinethe present caveat appeal. I have concluded that the caveat appeal can be answeredwithout deciding whether ministerial directions could be made under either s 103 ors 107 of the Crown Entities Act. I therefore make no comment on those issues.Section 443 — tenths reserve[24] Section 137(2) of the Land Transfer Act provides that any caveat must set outwith sufficient certainty the nature of the interest claimed by the caveator and the landsubject to the claim. The interest must exist at the time the caveat is lodged,30 andthere must be more than a mere potentiality that has not yet ripened into an interest inthe particular property.31[25] It is helpful to commence by repeating the italicised wording in the caveatquoted at [15] above which sets out the claimed interest. Notably, it does not identifythe claimed interest in the ACC land specifically: if the Crown is found to have breached its fiduciary duties then, to the extentthat the Caveator claims recovery of Crown land that should have been partof the Tenths Reserves as envisaged by the Spain award, but was not includedin those reserves, or was included and then removed, an institutionalconstructive trust would arise [26] An institutional constructive trust arises upon the happening of the eventswhich bring it into being.32 In this case, the trust arose from the Crown's acceptanceof the Spain award in 1845.33 Elias CJ considered "the Crown's hands were tied byits terms".34[27] The caveat asserts an interest by virtue of an institutional constructive trust intwo categories of tenths reserve land as envisaged by the Spain award. First, land thatwas not included in the reserves but should have been and, secondly, land that wasincluded but then removed. Section 443 falls into neither category. It was included in30 Three Chicks Ltd v NZ Building and Projects Ltd (2011) 12 NZCPR 799 (HC) at [18].31 Philpott v NZI Bank Ltd (1989) 1 NZ ConvC 190,246 (CA) at 190,248.32 Fortex Group Ltd (in rec and in liq) v MacIntosh [1998] 3 NZLR 171 (CA) at 172–173.33 The trust may have existed even earlier, from 1842.34 Proprietors of Wakatū v Attorney-General, above n 4, at [352].the tenths reserves but was not one of the 47 town sections that were relinquished in1847, nor was it removed at any later date. To the extent section 443 can properly beregarded as a specific trust asset, it was dealt with as such appropriately. The Crownfulfilled its strict fiduciary obligations as trustee to "get in" this trust asset and dealwith it in accordance with the trust for the benefit of the customary owners. There isno claim to the contrary, nor could there be. It may be observed that the substantiveproceedings are only concerned with alleged breaches of fiduciary duty up to 1882.35[28] The caveat does not explain any basis for the claimed interest in the five parcelsof land that form part of what was section 443 — land that was included in the tenthsreserves and not removed. Nor is there any reference in the Supreme Court'sjudgment in Wakatū to any claim having been made in respect of this land or any otherland falling into the same category. The Wakatū claims are in relation to the allegedbreaches arising from the Crown's failure to set aside the reserves, particularlythe rural reserves, to exclude the occupied lands and those transactions whichdiminished the tenths estate, none of which could include section 443. Leaving to oneside entirely whether ACC can be regarded as the Crown for present purposes,the caveat cannot be sustained against the single title comprising these five parcels ofland. In summary, the caveat does not assert a tenable claim to an interest in this partof the ACC land. It was a specific trust asset, but it was dealt with accordingly.Sections 442 and 439 — non-tenths reserves[29] These sections were not selected as one of the original 100 one-acre towntenths reserves. This land therefore falls outside the second category that Mr Staffordclaims an institutional constructive trust over — land included in the tenths reservesand then subsequently removed.[30] The question is whether these sections arguably could fall within the firstcategory identified in the caveat, being "land that should have been part of the TenthsReserves as envisaged by the Spain award, but was not included in those reserves".All 100 of the one-acre town tenths reserve sections were selected in 1842 andidentified on the plans attached to the Spain award. It is an agreed fact in the Wakatū35 At [34]–[35].proceedings that sections 442 and 439 were not included among the 100 reservesections. There is nothing in the Spain award to suggest it was envisaged that theseparticular sections would be part of the tenths reserves, quite the contrary.[31] However, the plans attached to the Spain award do not necessarily conform tothe stipulations in the text of the award, particularly because not all the occupied landshad been identified and surveyed at that time.36 Mr Stafford's substantive claim inthe High Court includes a contention that some of the sections selected as part ofthe 100 one-acre town tenths reserve sections were at least partly occupied (up to12 sections).37 If that were proved, there was arguably a breach of the Crown'sfiduciary obligation to exclude occupied lands and make up the correspondingshortfall in the tenths — in other words, to get in the trust assets. For the purposes ofthe present appeal, I accept it is arguable (the low threshold applicable) that the Crowncould be called to account for the shortfall and the land it acquired (excludingthe identified tenths and the occupied lands, neither of which could be touched forthe purpose of making up the shortfall) was impressed with a trust until that was done.Interest derived from ACC?[32] Section 137 of the Land Transfer Act requires that a caveat must containinformation showing how the land or estate or interest claimed is derived fromthe registered proprietor, here ACC.[33] Mr Stafford's substantive claim is not against ACC, rather it is againstthe Crown for its alleged breaches of fiduciary obligations dating from the time of itsacceptance of the Spain award in 1845. ACC did not come into existence until 1998,over 150 years later. ACC is a legal entity separate from the Crown.38 It is notsuggested that ACC assumed fiduciary obligations to the customary owners and itcannot be said to have breached, in the period up to 1882, the obligations found tohave been owed by the Crown. Any judgment Mr Stafford may obtain inthe substantive proceedings currently before the High Court will not be enforceableagainst ACC, which is not even a party to that proceeding. The defendant is36 At [408].37 At [135].38 Crown Entities Act 2004, s 15.the Attorney-General who is being sued on behalf of the Sovereign, in right of herGovernment in New Zealand. The Attorney-General, sued in this capacity, isthe correct defendant. Mr Stafford could not choose to sue ACC, which cannot be heldliable for the Crown's breaches of fiduciary obligation in this context.[34] I conclude, in agreement with Courtney J and for the reasons she has given,that any interest Mr Stafford may have in the ACC land is not derived from ACC asthe registered proprietor. This is fatal to the caveat in my view.[35] For these reasons, I would dismiss the appeal. I agree with Williams andCourtney JJ that the issue of whether Collins J had discretion to sustain a caveat unders 143 of the Land Transfer Act is moot. Accordingly, I agree that ACC's cross appealon this aspect of Collins J's judgment should be dismissed. I note that ACC did notpursue its cross appeal on costs. I agree with the formal orders proposed by Courtney Jto preserve Mr Stafford's position for a limited time to enable him to pursue hissignalled application for a stay pending any appeal to the Supreme Court.COURTNEY JTable of ContentsPara No.Introduction [36]BackgroundA brief history of the Nelson Tenths reserves [45]The ACC property [51]ISSUE 1: Is it reasonably arguable that the ACC property maybe applied to settling Crown liabilities under Wakatū by adirection under ss 103 and 107 of the CEA?The Crown Entities Act 2004 [54]The case in the High Court [62]The ACC's cross-appealThe arguments [68]The statutory framework governing the ACC [70]Is it reasonably arguable that the ACC property could beapplied to settle Wakatū liabilities by a direction unders 103?[82]Is it reasonably arguable that the ACC property could beapplied to settle Wakatū liabilities by a direction unders 107?[93]The ACC as an instrument of the Crown and its land as CrownlandMr Stafford's argument [106]Submissions by the ACC and the Attorney-General [112]Discussion [118]ISSUE 2: Is it reasonably arguable that Mr Stafford has acaveatable interest?The case in the High Court [134]The respective arguments on appealMr Stafford [135]The respondent's and Attorney-General's argument [141]Discussion [144]Result [155]Costs [157]Introduction[36] This appeal arises from Proprietors of Wakatū v Attorney-General, in whichthe Supreme Court declared that the Crown owed fiduciary duties to reserve 15,100acres of land for the benefit of the customary owners of land in the Nelson area.39[37] The appellant, Rore Stafford, is a kaumātua of Ngāti Rārua and Ngāti Tama,and a plaintiff in Wakatū with standing to claim as a person beneficially entitled bydescent to an interest in property in respect of which the Crown owed the fiduciaryduties.40 He asserts that Crown land in the Nelson area is held on an institutionalconstructive trust for those descendants of the customary owners of the land whom herepresents. Mr Stafford lodged a caveat over a property in Nelson owned by theAccident Compensation Corporation (the ACC) on the basis that the ACC is aninstrument of the Crown and its land is therefore Crown land and subject to the trust.41[38] The ACC applied to the High Court under s 143 of the Land Transfer Act195242 (the LTA 1952) for an order removing Mr Stafford's caveat. Although s 143does not identify the prerequisites for such an order, it is settled that the onus is on thecaveator to prove a reasonably arguable case in support of his or her claim.43 Even if39 Proprietors of Wakatū v Attorney-General, above n 4, at [1], [388], [495], and [589]. Questionsof liability, loss and remedy are still being litigated in the High Court.40 Proprietors of Wakatū v Attorney-General, above n 4, at [494].41 Schedule B of the caveat asserts that the ACC is subject to a sufficient degree of ministerial controlso that "[the] ACC constitutes the Crown for the purposes of the beneficial interest the Caveatorclaims in the Land".42 Repealed and replaced with the Land Transfer Act 2017, s 142.43 Sims v Lowe [1988] 1 NZLR 656 (CA) at 660. See also Bishop Warden Property Holdings Ltd vAutumn Tree Ltd [2018] NZCA 285, [2018] 3 NZLR 809 at [22].the caveator establishes an arguable case, the court retains residual discretion toremove the caveat.44[39] In the High Court Collins J accepted that it was reasonably arguable thatthe ACC, as a Crown agent under the Crown Entities Act 2004 (the CEA),45 could besubject to a ministerial direction "forbidding the sale of any land held by ACC that isthe subject of a claim by Māori on the basis that such lands may be used by the Crownto settle Māori land claims".46 Had such a direction been made, the property wouldhave been amenable to a caveat to protect the interests established in Wakatū.However, the Judge held that, because no such direction had actually been given,Mr Stafford could not show a caveatable interest in the land.47 Nevertheless, hedeclined to remove the caveat for a specified period to allow for consideration as towhether such a direction would be given.48[40] Mr Stafford appeals. The ACC cross-appeals and seeks to support thejudgment on other grounds. The Attorney-General has intervened to support theremoval of the caveat.[41] The issues identified and agreed by counsel were:(a) Is it reasonably arguable that (as Collins J found) the ACC propertymay be applied towards settling Crown liabilities arising fromthe Wakatū proceedings by responsible Ministers issuing a directionunder ss 103 or 107 of the CEA? (ACC's cross-appeal/support of thejudgment on other grounds)49(b) Is it reasonably arguable that Mr Stafford has a beneficial interest inthe ACC property sufficient to support caveats over its titles?(Mr Stafford's appeal)44 Pacific Homes Ltd (in rec) v Consolidated Joineries Ltd [1996] 2 NZLR 652 (CA) at 656.45 Schedule 1.46 Accident Compensation Corporation v Stafford, above n 24, at [82]. See also [86] and [87].47 At [94]–[95].48 At [97]. The judgment was subsequently stayed pending the outcome of this appeal. See resultsand reasons judgments, above n 28.49 Although this issue was framed as part of the cross-appeal, it is properly described as supportingthe judgment on other grounds.(c) In relation to the Judge's decision not to remove the caveat:(i) Was there a discretion under s 143 of the LTA 1952 to sustain acaveat for any period in circumstances where the Court hasfound that the caveator does not have a caveatable interest in theproperty in question?(ii) If such a discretion existed, can it only be exercised if the Courtis satisfied that the owner of the caveated property would not beprejudiced by doing so? (The ACC's cross-appeal)[42] Like Gilbert J, I consider it unnecessary to determine the first issue; I haveconcluded that Mr Stafford's appeal should be dismissed and that requiresdetermination of the second issue only. However, having regard to the parties'extensive submissions on the first issue, I have nevertheless considered it and recordmy views for the assistance of the parties.[43] I do not consider it necessary to determine the third issue. All parties acceptthat this issue is now moot because the Judge has granted a stay. Mootness is not amatter that deprives a court of jurisdiction to determine an appeal.50 However, thediscretion to do so is generally exercised only in exceptional circumstances, which caninclude the public interest in having a legal issue determined.51 Exceptionalcircumstances do not exist in this case.[44] The discretion conferred by s 143 of the LTA 1952 to make an order "as tothe court seems meet" was repealed on 12 November 2018 and substituted with a morerestrictive provision that only permits the court to "order that the caveat is removed".52As the Land Transfer Act 2017 applies to applications for the removal of caveatslodged after 12 November 2018, it is unlikely that the scope of the discretion conferredby the (now repealed) s 143 will arise as an issue before this Court again. Nor willsuch an issue arise under the express language of the newly enacted provision.50 R v Gordon-Smith [2008] NZSC 56, [2009] 1 NZLR 721 at [15]–[16].51 Baker v Hodder [2018] NZSC 78, [2019] 1 NZLR 94 at [32]–[34].52 Land Transfer Act 2017, s 142.BackgroundA brief history of the Nelson tenths reserves[45] The obligations found to exist in Wakatū arose from the terms on which landwas granted to The New Zealand Company (the Company) to establish a settlement inthe Nelson area. This history was canvassed extensively in Wakatū, from which thefollowing summary is drawn.[46] Under an agreement reached between the Company and the rangatira ofTe Tauihu o te Waka-a-Māui in 1839 (the Nelson Marlborough region), the Companywas to acquire land in the Nelson area on the basis that one-tenth of that land wouldbe set aside for the benefit of the customary Māori owners. In its prospectus issued in1841, the Company planned to sell allotments consisting of a one-acre town section,one accommodation or suburban section of 50 acres and one rural section of 150 acres.[47] By 1842, the town and suburban sections had been surveyed, with 100 one-acretown sections set aside as native reserve land under the agreement. This 100-acrereserve became known as the "Nelson tenths".53 The land that forms the ACC propertyincludes part of an original tenths section, known as section 443.[48] Commissioner Spain was asked to validate the 1839 agreement for purchase asfair and equitable under the terms of the Treaty of Waitangi. The Commissionerconfirmed the purchase on the basis that the Company would set aside one-tenth ofthe land for the benefit of local Māori, together with all pās, burial places and groundsin cultivation. The land subject to the agreement then became Crown land, and theCrown offered a grant to the Company.[49] The Company rejected the initial grant but accepted a later grant executed byGovernor Grey in 1848. However, the occupation lands had still not been fullysurveyed and excluded from the settlement. Moreover, the tenths reserves werediminished through exchanges that swapped originally-selected town and suburbantenths reserves for sections occupied or part-occupied by Māori, which should rightly53 The 100 50-acre suburban sections set aside became known as the Motueka and Moutere tenthsbut do not form part of this proceeding. The rural areas had not yet been surveyed.have been excluded altogether and not included in the tenths reserves. Further, by thetime the second grant was made, the Governor had agreed to a redistribution of someof the one-acre allotments in central Nelson, which resulted in only 53 of the agreed100 "town" allotments remaining as part of the Nelson tenths reserve.[50] By 1850 the Company had failed. The Crown took over all of the land setaside for Māori and responsibility for administering it, and vested the land in thePublic Trustee (subsequently known as the Māori Trustee).54 In 1892,the Public Trustee applied under the provisions of the Native Reserves Act 1882 toascertain those beneficially interested in lands described as the "New ZealandCompany's Tenths" located in the Nelson area. Judge Alexander Mackay held thatNgāti Rārua, Ngāti Tama, Te Atiawa and Ngāti Koata owned the land comprising theNelson tenths at the time of sale to the Company, and approved lists of identifiedsurvivors and their successors, stating that those identified had been determined tohave beneficial interests in the lands known as the "New Zealand Company's Tenths"situated in Nelson, Moutere and Motueka. It is under this judgment that Mr Staffordclaims his interest in the property.The ACC property[51] The ACC property comprises 11 parcels of land. Five once formed part ofsection 443, which was one of the Nelson tenths allotments selected in 1842. It wasnot relinquished as part of the redistribution in 1847. It was subsequently held andadministered as tenths reserve land by the Public Trustee. A certificate of title issuedin 1926 records that section 443 had been subdivided for leasing purposes. In 1969the Māori Trustee transferred part of section 443 (the part not included in the ACCproperty) to the Nelson Club. In 1970 the Māori Trustee transferred the part of section443 that is within the ACC property to Newman Brothers Ltd. There is no allegationof breach by the Public Trustee.[52] The other parcels of the ACC property include the whole of section 442 andpart of section 439. Sections 442 and 439 were never set aside in 1842 as part of the54 Pursuant to the Native Reserves Act 1856, and later the Native Reserves Act 1882.Nelson tenths allotments and, on Mr Stafford's argument, represent part of the shortfallin land that should have been set aside for the customary owners but was not.[53] The ACC acquired the subject property in 2008 as part of its investmentportfolio. The evidence from the ACC was that its investment properties are acquired"on a commercial basis" so I proceed on the basis that it was acquired for full value.ISSUE 1: Is it reasonably arguable that the ACC property may be applied tosettling Crown liabilities under Wakatū by a direction under ss 103 and 107 ofthe CEA?The Crown Entities Act 2004[54] The purpose of the CEA is:55 to provide a consistent framework for the establishment, governance, andoperation of Crown entities and to clarify accountability relationships betweenCrown entities, their board members, their responsible Ministers on behalf ofthe Crown, and the House of Representatives [55] Section 15 of the CEA spells out the independent status of statutory entitiesunder that Act. Relevantly:15 Status of statutory entityA statutory entity—(a) is a body corporate; and(b) is accordingly a legal entity separate from its members, officeholders, employees, and the Crown; and(c) continues in existence until it is dissolved by an Act.[56] However, ss 103 and 107 of the CEA also contain provisions that allowMinisters to give Crown agents certain directions which, by virtue of s 114, must becomplied with.55 Crown Entities Act, s 3.[57] Section 103 provides:103 Power to direct Crown agents to give effect to government policy(1) The responsible Minister of a Crown agent may direct the entity to giveeffect to a government policy that relates to the entity's functions andobjectives.(2) Sections 114 and 115 apply to the direction.(3) This section is subject to section 113.[58] Section 107 relevantly provides:56107 Directions to support whole of government approach(1) The Minister of State Services and the Minister of Finance may jointlydirect Crown entities to support a whole of government approach bycomplying with specified requirements for any of the followingpurposes:(a) to improve (directly or indirectly) public services:(b) to secure economies or efficiencies:(c) to develop expertise and capability:(d) to ensure business continuity:(e) to manage risks to the Government's financial position.[59] These powers are, however, subject to the limitations imposed by s 113.Relevantly:113 Safeguarding independence of Crown entities(1) This Act does not authorise a Minister to direct a Crown entity, or amember, employee, or office holder of a Crown entity,—(a) in relation to a statutorily independent function; or(b) requiring the performance or non-performance of a particular act,or the bringing about of a particular result, in respect of a particularperson or persons.[60] Section 114 relevantly provides:56 Section 107 of the CEA is set out in full later, when I come to discuss its application in detail.114 Crown entities must comply with directions given under statutorypower of direction(1) A Crown entity must, in performing its functions, comply with—(a) any direction given to it under a power of direction in this Act oranother Act; and(b) any direction under section 107.[61] Finally, s 115 of the CEA sets out the procedure for ministerial directions ongovernment policy but does not apply to directions given under s 107.57The case in the High Court[62] In the High Court Mr Stafford argued that the ACC is an instrument ofthe Crown under the common law control test and its property therefore is availableto satisfy Crown liabilities under Wakatū. The Judge acknowledged the difficulties indefining the Crown and surveyed the various approaches taken by judges andacademic writers.58 He cited (among others) the following statement from ProfessorPhilip Joseph's text Constitutional and Administrative Law in New Zealand, to theeffect that under the common law control test, which determines the status of an entityby reference to the nature and degree of control exercised by the Crown,59 Crownentities fall within the ambit of the Crown identity:60Crown agents are the only Crown entities that fall squarely under the Crown'sumbrella. The responsible minister may direct a Crown agent to give effectto government policy, and the entity is under a statutory duty to comply.This power and correlative duty subject Crown agents to the degree ofgovernmental control needed to satisfy the common law control test.But questions may still arise. An entity's Act may supplement or expresslymodify or negate the Crown Entities Act 2004. The Crown Entities Act 2004is a generic statute that prevails over an entity's constituent Act, except tothe extent that an entity's Act expressly provides otherwise. Thus, a Crownagent will not qualify as the Crown where its statute expressly negatedthe minister's power to issue binding directions under the Crown Entities Act2004. Furthermore, Crown agents may be declared not to be the Crown forspecific statutory purposes. Under the Public Finance Act 1989, for example,"the Crown" does not include Crown entities for any of the Act's purposes.57 Section 115(4).58 Accident Compensation Corporation v Stafford, above n 24, at [68]–[74].59 Commissioner of Inland Revenue v Medical Council of New Zealand [1997] 2 NZLR 297 (CA) at327–328.60 Accident Compensation Corporation v Stafford, above n 24, at [74], citing Philip A JosephConstitutional and Administrative Law in New Zealand (4th ed, Thomson Reuters, Wellington,2014) at 17.17.2.6(2) (footnotes omitted).[63] However, the Judge considered that determining the ACC's status by referenceto the provisions of the CEA was more appropriate than the common law control testand proceeded on that basis.61 He identified the appropriate inquiry as "whether it isreasonably arguable, in the context of this case, that responsible Ministers can lawfullyexercise control over ACC in a way that could lead to the ACC property being appliedtowards the settlement of any Crown liability arising from the Wakatū proceeding",because it was only in those circumstances that the ACC would hold the property onbehalf of the Crown.62[64] The Judge regarded the history of the Wakatū claim and the broader context ofthe commitment by successive governments to resolve outstanding claims betweenMāori and the Crown as relevant to the question before him.63 He was alsosignificantly influenced by the Supreme Court's decision in Ririnui v LandcorpFarming Ltd, notwithstanding some obvious differences.64 Ririnui concerned landheld by a state-owned enterprise, Landcorp Farming, over which Ngāti Whakahemoclaimed mana whenua. In the context of judicial review of the decision by Landcorp'sshareholding Ministers not to intervene in the sale of the land, the Supreme Court heldthat the Ministers could lawfully ask Landcorp to refrain from selling land that was ofinterest to Māori.65 The State-Owned Enterprises Act 1986 does not containprovisions similar to ss 103 or 107 of the CEA. Nevertheless, the Supreme Court heldthat the Crown (inferentially, by the shareholding Ministers) was able "to exercise asubstantial degree of indirect control over the manner in which a state-ownedenterprise deployed its assets."66[65] The Judge considered that if the responsible Ministers could indirectlyinfluence the way a state-owned enterprise deals with land of interest to Māori, thenresponsible Ministers have, under ss 103 and 107 of the CEA, even greater ability to61 At [75(1)].62 At [75(3)].63 At [80].64 Ririnui v Landcorp Farming Ltd [2016] NZSC 62, [2016] 1 NZLR 1056.65 At [86], [87] and [92].66 At [86(b)] citing the observations of the Privy Council in New Zealand Māori Council vAttorney-General [1994] 1 NZLR 513 (PC) at 520.control the way in which a Crown agent can dispose of land of interest to Māori.67 Heconcluded:[82] It is therefore reasonably arguable the Minister could, after followingthe steps in s 115 of the Crown Entities Act, issue a direction to ACC pursuantto s 103 of the Crown Entities Act forbidding the sale of any land held by ACCthat is the subject of a claim by Māori on the basis that such lands may be usedby the Crown to settle Māori land claims. It is reasonably arguable that ageneral policy direction of that kind is unlikely to offend s 113(1)(b) ofthe Crown Entities Act. Such a general direction would, however, havethe indirect effect of preserving the current ownership of the ACC propertyuntil Mr Stafford's claim is heard and determined. Alternatively, it isreasonably arguable the Minister of State Services and the Minister of Financemay be able to give a similar direction under s 107(1)(e) of the Crown EntitiesAct in order to assist the Government in managing fiscal risks concerningclaims against the Crown by Māori.[66] The Judge did not consider it significant that a direction under s 103 of the CEAwould have the indirect effect of the Minister asserting influence over the way theACC managed part of its investment portfolio.68 Rather, he viewed the powersconferred by s 103 of the CEA as reinforced by s 275 of the Accident CompensationAct 2001 (the AC Act) which specifically provides that investment decisions may be"[s]ubject to any policy direction under section 103 of the Crown Entities Act".69[67] Finding in Mr Stafford's favour on this issue, the Judge said:[86] This analysis leads to the conclusion that it is reasonably arguablethe ACC property may indirectly be the subject of control by the Minister orMinisters when giving directions concerning government policy forthe resolution of land disputes between the Crown and Māori, or whenmanaging the Crown's fiscal risks in relation to land disputes with Māori.The ACC's Cross-appealThe arguments[68] Mr Laurenson QC, for the ACC, argued that a direction of the kindcontemplated by the Judge could not be given under s 103 because that power islimited to directions to give effect to Government policy "that relates to the entity'sfunctions and objectives" and such a direction could never fall within the functions67 Accident Compensation Corporation v Stafford, above n 24, at [81].68 At [85].69 Section 275(1).and objectives of the ACC, as set out in the AC Act. Nor did Mr Laurenson acceptthat such a direction was possible under s 107 because it would not come within thestated purposes for which a joint direction could be given. He submitted that, in anyevent, s 113(1) would preclude such a direction.[69] Ms Feint, for Mr Stafford, submitted that the Minister did have the power todirect the ACC as to the disposal of property, for the reasons the Judge gave.70 Shedid not accept that a direction of the kind suggested by the Judge would contravenes 113(1)(b) because it would not be seeking a specific outcome but, rather, would bedirected towards managing the Government's fiscal risks in relation to the Wakatūlitigation. Moreover, she submitted, s 113 should be read as permitting the Crown togive effect to its legal duties as found to exist by the Supreme Court. She did not seemerit in the objection that it would result in the Government accessing ACC assets forpurposes unrelated to the ACC's function; her response was that it was simply anaccounting matter between the Government and ACC — in other words, it was for theGovernment to reimburse the ACC for the cost.The statutory framework governing the ACC[70] The ACC is a body corporate established under the Accident CompensationAct 1972 and continued under the Accident Compensation Act 2001.71 The AC Actdoes not impose any specific statutory purpose or objective of the ACC. They may,however, be discerned from the purpose of the AC Act, which is:72.to enhance the public good and reinforce the social contract represented bythe first accident compensation scheme by providing for a fair and sustainablescheme for managing personal injury.70 Ms Feint also sought to support the decision on the ground that ACC is properly viewed as aninstrument of the Crown on the common law control test. No notice of an intention to support thejudgment on other grounds had been filed but there was no objection from the ACC or theAttorney-General. Because Issue 1 is directed specifically towards the scope of ss 103 and 107of the CEA, I address this further argument separately.71 The Accident Compensation Act 2001 is the fifth statute enacted to govern the accidentcompensation scheme, which started on 1 April 1974. The original legal entity responsible foradministering the scheme was the Accident Compensation Commission, which was established asa body corporate by the Accident Compensation Act 1972, s 10. The Act was later amended toreplace the Accident Compensation Commission with the Accident Compensation Corporation,being "the same body as the body corporate established under the name of the AccidentCompensation Commission": see Accident Compensation Amendment Act 1980, s 2(2).72 Section 3.[71] That stated purpose is to be achieved in a number of specific ways including"ensuring that, during their rehabilitation, claimants receive fair compensation for lossfrom injury, including fair determination of weekly compensation and, whereappropriate, lump sums for permanent impairment".73[72] The ACC does, however, have clear statutory functions. It carries out itsstatutory functions through a Board, the members of which are appointed by theMinister for ACC.74 The Board sets the ACC's strategy, sets and monitors keyperformance indicators and is responsible for financial management, includinginvestments and reporting. Board members are accountable to the Minister.75 TheBoard appoints a chief executive in consultation with the Minister for ACC and theState Services Commissioner.76[73] The ACC's statutory functions are set out s 262 which, relevantly,provides that:(1) The functions of the Corporation are to —(a) carry out the duties referred to in section 165; and(c) manage assets, liabilities and risks in relation to the Accounts,including risk management by means of reinsurance or other means;and(d) carry out such other functions as are conferred on it by this Act, or areancillary to and consistent with those functions.[74] The statutory duties set out at s 165 are to determine cover for claims, provideentitlements in accordance with the AC Act, manage the Accounts that fundentitlements, collect levies and administer the statutory dispute resolutionprovisions.77 For present purposes we are concerned with the management ofthe Accounts.73 Section 3(d).74 Section 267; Crown Entities Act, ss 28, 78 and sch 5.75 Crown Entities Act, ss 26 and 58(1).76 Accident Compensation Act, sch 5 cl 17; and Crown Entities Act, s 117.77 Section 165 of the AC Act also requires the ACC to ensure the orderly transition from the[75] The ACC is required to manage the Accounts on a fully-funded model andcannot look to the Crown to meet its obligations to claimants; under the Public FinanceAct 1989 "[t]he Crown is not liable to contribute towards the payment of any debts orliabilities of a Crown entity".78[76] The accident compensation scheme is funded through five separate accounts(together the Accounts), mostly funded by levies on those likely to claim under them.79The Work Account, Motor Vehicle Account and Earners' Account are all funded bylevies.80 The Non-Earners' Account is funded by Government appropriation.81The Treatment Injury Account is funded by both levies and the Earners' Account(in the case of an earner) and the Non-Earners' Account (in the case of a non-earner).82The Accounts are not permitted to cross-subsidise.83 Thus, save forthe Non-Earners' Account and the Treatment Injury Account (to the extent it is fundedby the Non-Earners' account) the scheme is funded by levy payers, and any shortfallmust be met by increasing levies or cutting costs.84[77] The nature of the entitlements that must be funded by the ACC significantlyinfluences the management of the Accounts. Many injuries covered by the schemeresult in ongoing needs, sometimes for years, sometimes even for the life ofthe claimant. The ACC must have investments that can produce ongoing incomestreams to meet those claims without unduly burdening future levy payers.85 In thissense, the ACC functions in a manner similar to that of a mutual insurer.competitive workplace accident insurance provisions of previous Acts (the Accident Insurance Act1998 and the Accident Insurance (Transitional Provisions) Act 2000) but this function is notrelevant to the cross-appeal.78 Accident Compensation Act 2001, s 166A(1); Public Finance Act 1989, s 49(1). Conversely, byvirtue of s 15 of the CEA, the ACC is not liable for the debts of the Crown.79 Accident Compensation Act, s 166(1).80 Sections 167(2), 213(2) and 218(3).81 Section 227(2).82 Section 228(2).83 Section 275(2).84 For example, on the evidence as at 31 December 2017 the Non-Earners' fund comprised 9.4 percent of the total funds under management. The remaining 90.6 per cent was funded directly bylevy payers.85 The ACC is one of several public entities known as Crown Financial Institutions (CFIs) that areresponsible for managing and investing large financial assets. The ACC's status as a CFI reflectsthe significant level of financial management and investment needed to support its statutoryfunction of administering the accident compensation scheme.[78] Section 166 contains provisions relating to the financial management ofthe Accounts and includes the principles of financial responsibility in relation tothe Accounts and the requirement for the Minister to issue a funding policystatement.86 The funding policy statement issued on 12 May 2016 by the then Ministerfor ACC, the Hon Nikki Kaye, opened with the following comment:Accident compensation is by nature a long-term activity with liabilities thatstretch over decades. In setting levies, it is necessary to consider the long termnature of the claims they will fund as well as provide levy payers withreasonable stability of levy rates over time. This statement informs ACC ofthe Government's expectations with regard to these two factors. In particular,the statement is intended to improve:• transparency around funding decisions, by making it clear howtoday's funding decisions will impact the scheme over future periods;and• consistency and stability in decisions over time, by imparting alonger-term focus.[79] The ACC's obligations of financial management, supplemented by the fundingpolicy statement, form the backdrop to the specific provisions regarding managementof the Accounts and investment. It must receive, apply and account for revenue andexpenditure separately in relation to each Account.87[80] Under s 275 the ACC also has the power to invest. Subject only to directionunder s 103 of the CEA, it must invest all money it receives in respect of any Accountthat is not immediately required for expenditure as if it were a trustee:275 Investments(1) Subject to any policy direction under section 103 of the CrownEntities Act 2004, the Corporation must invest, in the same manner asif it were a trustee, all money received by it in respect of any Accountthat is not immediately required for expenditure.(2) Any returns on investments must be apportioned across the Accountsin a way that reasonably represents the contribution to the investmentof each Account.(3) The Minister must consult with the Minister of Finance before makinga policy direction under section 103 of the Crown Entities Act 2004relating to investment.86 Sections 166B and 166C.87 Section 274(1).(4) Section 100 of the Crown Entities Act 2004 does not apply to aninvestment made under this section.[81] I say more about the ACC's investment function later in relation to the questionof whether the ACC is properly viewed as an instrument of the Crown. For now, Inote that the ACC's long-term investments include real property because propertyassets are a means of addressing the risks of unanticipated future inflation and thechallenge of finding suitable long-term assets.88 Its assets and liabilities are recordedin the ACC's own financial statements.89 Although they form part of the Crown'sconsolidated accounts, the ACC says that is for reporting purposes only.90 The ACC'sinvestments are held proportionally by the separate Accounts and returns on theinvestments apportioned to the Accounts in a way that reasonably representsthe contribution to the investment of each Account.91 Therefore, surpluses in leviedAccounts must be applied to the relevant Account to reduce future levies in thatAccount.92 It is only surpluses in the Non-Earners' Account that can be paid tothe Crown.93Is it reasonably arguable that the ACC property could be applied to settle Wakatūliabilities by a direction under s 103?[82] I see two flaws in the Judge's conclusion that the degree of control conferredon Ministers by s 103 would permit a direction forbidding the ACC from dealing withthe land in which Māori claimed an interest. First, it treated the powers of directionunder s 103 as broader than they actually are. Secondly, it did not ascribe anysignificance to the specific features of the ACC's statutory functions and operation.[83] Before discussing this aspect, it is necessary to identify the hypotheticaldirection that would be given. The Judge identified two quite different directions. Thefirst was whether the responsible Ministers could exercise control over the ACC "in a88 As at 31 March 2017, the ACC had an investment portfolio worth approximately $36.9 billion.Of this, its Australasian property and infrastructure portfolio accounted for approximatelyfive per cent. However, these figures are not directly relevant to the issue before us. The questioncan only be whether, as a matter of principle, it is right to treat the ACC as the Crown and,consequently, its assets as Crown assets.89 Accident Compensation Act, s 278.90 Public Finance Act, s 27(3).91 Accident Compensation Act, s 275(2).92 Section 166A(2)(b).93 Section 227(4).way that could lead to the ACC property being applied towards the settlement of anyCrown liability arising from the Wakatū proceeding".94 But later he concluded that amuch wider direction might be given, that responsible Ministers could direct the ACC"forbidding the sale of any land held by ACC that is the subject of a claim by Māori".95[84] The question posed in counsels' agreed issues is specifically concerned with adirection that would see the ACC property applied to settle Wakatū liabilities. That isthe appropriate approach, given that the claim asserted in the caveat is specificallylinked to the Wakatū proceedings. I therefore proceed on the basis of a hypotheticaldirection that the ACC hold the property for the purposes of settling Wakatū liabilities.[85] I set out s 103 of the CEA again, for convenience:103 Power to direct Crown agents to give effect to government policy(1) The responsible Minister of a Crown agent may direct the entity to giveeffect to a government policy that relates to the entity's functions andobjectives.(2) Sections 114 and 115 apply to the direction.(3) This section is subject to section 113.[86] The scope of s 103 is limited; a direction can only be given to "direct the entityto give effect to a government policy that relates to the entity's functions andobjectives". As discussed, the ACC has the specified statutory functions set out ins 262 of the AC Act. Whilst it does not have a specified statutory objective, its generalobjective can be discerned readily from the statutory objective of the AC Act itself.[87] The phrase "relates to" (or "relating to") is commonly used, and in a widevariety of contexts. Although broad, it nevertheless connotes a connection orrelationship of some kind. In Lyttle v R, for example, this Court said (in the contextof the Criminal Procedure Act 2011):96The transitional verb "relate" in s 296(3)(a) of the CPA means there has to bea close link or a "connection" between the proceeding and the determinationof the charge 94 Accident Compensation Corporation v Stafford, above n 24, at [75(3)].95 At [82].96 Lyttle v R [2019] NZCA 329, [2019] 3 NZLR 636 at [27].[88] For a direction of the kind proposed it would be necessary to show that adirection made for the purpose of assisting the Crown to satisfy liabilities arising underWakatū was connected to the ACC's statutory function or its general objective, asdiscerned from the statutory objective of the AC Act.[89] As discussed, managing assets is a core statutory function of the ACC.The ACC must manage the five Accounts individually and on a fully-funded basis ina way that provides adequate long-term cover. The provisions relating to investmentsvery much reflect the fact that each Account is funded separately with the revenue andexpenditure relating to each received, applied and accounted for separately.97[90] Most of the funding the ACC receives comes from levy payers. Levy payersmaking these payments do so in accordance with the social contract that underpins theaccident compensation scheme, by which ordinary people gave up the right to sue forpersonal injury in return for access to no-fault compensation funded, for the most part,by themselves through levies. A lesser portion comes from the Government to fundthe Non-Earners' Account and (partially) the Treatment Account. Thesecircumstances explain why the ACC is statutorily obliged to invest as if it were atrustee; the ACC must invest all the funds it receives (including from the Government)as if it were a trustee and account for returns in proportion to the contributions receivedin respect of each Account.98 It follows that assets acquired by the ACC have beenacquired in accordance with its obligation to invest as if it were a trustee.[91] Moreover, although the ACC's obligation to invest as if it were a trustee issubject to any direction under s 103 of the CEA, the s 103 power itself is constrained;under s 275(3) of the AC Act the Minister must consult with the Minister of Financebefore making any such direction. It seems unlikely that the Minister could make adirection that conflicted with a funding policy statement issued under s 166B.[92] In my view, the nature of the ACC's obligations in respect of the funding andmanaging of the individual Accounts means that a government policy under which adirection was made requiring the ACC to hold the property for the purpose of settling97 Accident Compensation Act, s 274(1).98 Section 275.Wakatū liabilities would cut across rather than relate to the ACC's functions andobjectives.Is it reasonably arguable that the ACC property could be applied to settle Wakatūliabilities by a direction under s 107?[93] I turn, then, to s 107 of the CEA, the alternative basis on which the Judgeconsidered a direction could be made constraining any dealing with ACC land.Section 107 serves a very different purpose to s 103. Its focus is the broader, whole ofgovernment view. It can only be used for the specific purposes identified at s 107(1)and those purposes are directed towards the business of government generally, not thebusiness of any particular Crown entity. A direction given under s 107 can be givenonly to categories, types or groups of Crown entities. I set out the provision in full:107 Directions to support whole of government approach(1) The Minister of State Services and the Minister of Finance may jointlydirect Crown entities to support a whole of government approach bycomplying with specified requirements for any of the followingpurposes:(a) to improve (directly or indirectly) public services:(b) to secure economies or efficiencies:(c) to develop expertise and capability:(d) to ensure business continuity:(e) to manage risks to the Government's financial position._________________________________________________________ExampleA direction may be given requiring that all Crown entities comply withe-government requirements to improve public services.______________________________________________________________The direction may be given only—(a) to 1 or more categories of Crown entities (for example, to allstatutory entities, all Crown entity companies, or all schoolboards of trustees); or(b) to 1 or more types of statutory entity (for example, to allCrown agents); or(c) to a group of Crown entities (whether made up of categoriesor types) if—(i) the group is made up of at least 3 Crown entities; and(ii) the entities in the group have in common at least 1significant characteristic that relates to the direction(for example, the characteristic could relate to theCrown entities' asset holdings or presence in aregion).(2A) For the purposes of subsection (2)(a) and (c), companies named inSchedule 4A of the Public Finance Act 1989 may be treated as acategory of Crown entities.(3) No direction may be given under this section to Crown entitysubsidiaries.[94] The basis suggested for a direction under s 107 was s 107(1)(e), "to managerisks to the Government's financial position".[95] A direction of the kind suggested by the Judge was clearly one that would affecta number of Crown entities. But the ACC maintained its argument that the powers ofdirection could not have been intended to be exercised so as to interfere with theACC's statutory functions of investment. However, that limitation, which appearedin s 103, is not included in s 107. Parliament must therefore have contemplated adirection could be given under s 107 that would, potentially, cut across the statutoryfunction of a Crown entity, subject only to s 113(1).[96] However, the ACC's alternative argument was that a direction of the kindcontemplated by the Judge would be precluded by s 113(1)(b) as it requires thenon-performance of a particular act or the bringing about of a particular result (notselling a property) in respect of a particular person or persons (Mr Stafford and otherWakatū claimants).[97] Ms Feint argued that the interpretation of ss 107 and 113(1)(b) ought to beapproached similarly to cases involving Treaty claims, with statutory powersinterpreted or applied consistently with Treaty principles, even in the absence of aTreaty clause.99 Ms Feint submitted that, although this is not a Treaty case, the contextis nevertheless a constitutional one because the specific obligations relating to theNelson tenths arose against the background of the Crown's assumption of99 Tukaki v Commonwealth of Australia [2018] NZCA 324, [2018] NZAR 1597 at [35]–[41].responsibility towards Māori under the Treaty. This approach would see a generousinterpretation taken so as to assist the resolution of land claims. Ms Feint saw it asrelevant that the ACC Statement of Intent confirms its support of the Crown in itsTreaty relationships.[98] Moreover, Ms Feint pointed, by way of example showing that such directionshad previously been made, to a 2007 letter from then Minister Ruth Dyson explaininga modified review process adopted by Cabinet "to identify wider national interestswhen crown land is being disposed of". It included, for example, the request that allCrown land proposed to be disposed of (including that of Crown entities) be referredto the Historic Places Trust for assessment as to whether it was land of potentialinterest. It was not suggested that this process was still in place or that the ACC wassubject to any comparable current constraint; the evidence was simply tendered as anexample of how property held by Crown entities generally could be the subject ofministerial direction.[99] I consider this aspect of Ms Feint's argument in more detail later, in relation tothe status of the ACC as an instrument of the Crown. At this stage, it is sufficient tosay that I accept that, while the Wakatū claim is not a Treaty claim, it does arise againstthe historical background of the Treaty and in the context of the original agreementwith the Company being affirmed as fair and equitable under the terms of the Treaty,with the Crown subsequently assuming the Company's obligations under theagreement. In these circumstances, the approach contended for in interpreting ss 107and 113(1)(b) is reasonable. But no specific suggestion was made as to how it wouldaffect the application of these provisions in this case. I am doubtful that, even on agenerous approach to the application of s 113(1)(b), the kind of direction contemplatedby the Judge would be permitted.[100] Unlike the process described in Ms Dyson's letter or the current policy of theOffice of Treaty Settlements to land bank for future Treaty claim settlements, adirection forbidding the sale of land that is subject to a claim by Wakatū claimantswould constrain the dealings with land that is subject to a Wakatū claim; necessarilythat would only respond to the current claims by the identified Wakatū claimants. Inmy view those claimants, though they may be relatively large in number, are"particular" in the commonly understood sense of being distinguished ordistinguishable in some way that sets them apart from others.[101] I respectfully disagree with Williams J's reliance on Latimer v Commissionerof Inland Revenue100 for the proposition that, in this case, the common descent of theWakatū claimants means that they are properly viewed as a section of the public ratherthan a private class (using the law of charities as an analogy) and therefore are not"particular persons". This proposition is not supported by the history of the Wakatūlitigation, as explained in the Supreme Court's decision.101[102] In summary, following an application by the Public Trustee to the Native LandCourt in 1892, orders were made identifying 253 beneficiaries of the tenths reserves,identifying the hapū entitled and establishing the proportions in which they were toshare in the benefit of the 15,100 acres by reference to the apportionment made in theSpain award. In 1977 the tenths reserves that are the subject of the Wakatū litigationwere vested in the Proprietors of Wakatū Inc on trust for the descendants andsuccessors of those identified by the Native Land Court in 1893 as beneficiaries of thetenths reserves. Mr Stafford is one such beneficiary by virtue of descent from ownersidentified in 1893 and, as already noted, was an appellant in the Wakatū case beforethe Supreme Court.[103] Some descendants of the customary owners were not, however, members ofProprietors of Wakatū Inc because legislative changes had resulted in them beingremoved as owners of the tenths. In Wakatū there was another appellant, a trust ofwhich Mr Stafford was settlor, Te Kahui Ngahuru Trust, which represented thedescendants of those identified as beneficiaries by the Native Land Court. Inrecounting the history of the claim Elias CJ observed that:[44] There is considerable overlap between the beneficiaries of Wakatū andthe beneficiaries of Te Kahui Ngahuru Trust. The main differences arise outof the basis of succession under Māori land legislation in the years since 1893which has meant that, today, not all beneficiaries of Wakatū are descendantsof those identified by the Native Land Court in 1893. In addition, someindividuals were removed as owners of the tenths under the provisions of theMāori Reserved Lands Act 1955. Although the beneficiaries of Wakatū are100 Latimer v Commissioner of Inland Revenue [2002] 3 NZLR 195 (CA) at [38].101 Proprietors of Wakatū v Attorney-General, above n 4, at [40]–[51].the substantial body of descendants from the 1893 owners, Te Kahui NgahuruTrust was intended as a vehicle to reintegrate as beneficiaries those who hadbeen excluded and their descendants.[104] The Nelson tenths reserves were the subject of a claim to the WaitangiTribunal, Wai 56, filed by Mr Stafford and another claimant for themselves and onbehalf of Wakatū, Ngāti Tama, Te Atiawa, Ngāti Koata, Ngāti Rārua and "all Māoripeople affected by [the] claim".102 Before the Tribunal the Crown accepted that it hadcommitted a number of breaches of Treaty principles, including in relation to the tenthsreserves. Wai 56 was determined by the Waitangi Tribunal along with a number ofother claims. Tainui Taranaki ki te Tonga was mandated to negotiate for all claimantsin relation to Te Tauihu district, including the Wai 56 claimants but on the basis thatWakatū would be kaitiaki of the Wai 56 claim in the negotiations.[105] The Wakatū proceedings were brought because the Crown was not prepared toconsider a discrete settlement of the Nelson tenths claims brought under Wai 56 but,rather, sought a wider settlement of all grievances with all iwi groupings in Te Tauihurepresented by Tainui Taranaki ki te Tonga. It is clear from this history that theclaimants in Wakatū have sought to have a distinct identity throughout and to be dealtwith by the Crown separately from others. They may now number in their thousands,but it is difficult to view them as anything other than "particular persons" for thepurposes of s 113(1)(b).The ACC as an instrument of the Crown and its land as Crown landMr Stafford's argument[106] Ms Feint argued that the ACC is an instrument of the Crown in terms of thecommon law control test and, consequently, the ACC property is Crown land. Sherelied on Professor Joseph's view that, subject to statutory contra-indications, Crownagents are instruments of the executive. She argued that the ACC's separate legalpersonality under s 15(b) of the CEA did not preclude a finding that property registeredin the ACC's name was "Crown land" in the circumstances of this case because theCEA's purpose is internal, namely to establish a consistent governance framework for102 At [45].Crown entities; it provides putative independence for operational and accountingpurposes but does not change the essential character of the ACC as a creature of theCrown. The existence of those powers is simply a mechanism of control that actuallydemonstrates the nature of the ACC as an instrument of the Crown. In addition, thepower to appoint the Board and set strategic direction through both letters ofexpectation and statements of corporate intent showed a level of ministerial controlthat makes it clear that the ACC is, in substance, an instrument of the Crown.[107] Further, treating the ACC as an instrument of the Crown would be consistentwith the Crown's practice regarding the use of Crown agent-owned land to settleTreaty claims. It would also be consistent with the approach discussed earlier ofinterpreting statutory powers consistently with Treaty principles even in the absenceof a Treaty clause.103 Ms Feint submitted that determination of the ACC's status inthis case must reflect the constitutional context of the Crown's obligations to thecustomary owners and proposed that in the forthcoming Wakatū litigation the HighCourt will, arguably, take a broader view of what constitutes Crown land and treat theACC as an instrument of the Crown and its land as Crown land. Although the dutiesfound in Wakatū to be owed are in the nature of private fiduciary duties, they have aconstitutional source and are imbued with the Crown's constitutional obligations toMāori, for the reasons explained by Elias CJ in Wakatū:104[379] Where the Crown "wears many hats and represents many interests"105it may not owe fiduciary duties to individuals or groups but only governmentalobligations owed to all. As was accepted in the Canadian cases which havefollowed Calder v Attorney-General of British Colombia106 that is not the casein respect of Crown dealings with native peoples with whom the Crown hasspecial responsibilities, especially in respect of their pre-existing interests inland, recognised by the Crown. In Elder Advocates of Alberta Societythe Supreme Court of Canada recognised that the Crown would be subject tofiduciary duties not only arising out of "clear government commitments" fromthe Royal Proclamation of 1763 onwards and by way of analogy withobligations in the private sphere, but also in the additional circumstances"where the relationship is akin to one where a fiduciary duty has beenrecognized on private actors" and which goes beyond a "general obligation tothe public or sectors of the public".107103 Tukaki, above n 99, at [35]–[41].104 Proprietors of Wakatū v Attorney-General, above n 4.105 Wewaykum Indian Band v Canada [2002] SCC 79, [2002] 4 SCR 245 at [96].106 Calder v Attorney-General of British Colombia [1973] SCR 313.107 Alberta v Elder Advocates of Alberta Society 2011 SCC 24, [2011] 2 SCR 261 at [48].[380] Such assumption of responsibility towards Māori in New Zealandbegan with the Treaty of Waitangi (a covenant which guaranteed to Māorithe "full, exclusive, and undisturbed possession" of their lands and which setup the Crown's right of pre-emption) and the Charter of 1840 (which made itclear that the Māori interest in land was inalienable and that the interestspassed to the descendants of the occupiers). These commitments wererepeated in the Royal Instructions and official correspondence. They werebehind the terms of the Land Claims Ordinance, which provided the processfor checking that pre-Treaty purchases were on "equitable terms".[108] Ms Feint says that, although this is not a Treaty case, the context is neverthelessa constitutional one because the specific obligations relating to the Nelson tenths aroseagainst the background of the Crown's assumption of responsibility towards Māoriunder the Treaty. Thus, the Crown is expected to act with honour and do what it canto make the land available to redress breaches of the fiduciary obligations. It wouldnot be appropriate, therefore, to put the property permanently out of reach of thecustomary owners by finding that the (low) threshold for establishing a caveatableinterest had not been met.[109] Ms Feint drew on the decision of the Canadian Supreme Court in Clyde River(Hamlet) v Petroleum Geo-Services Inc.108 She argued that, by analogy, the ACCought to be regarded as an instrument of executive government. Clyde Riverconcerned the Crown's treaty obligation to consult with Inuit, triggered by the processof the National Energy Board (NEB) considering an application for offshore seismictesting for oil and gas. The NEB was a federal administrative tribunal and regulatoryagency, the final decision maker for authorising oil and gas exploration and drillingand operated independently of Crown Ministers. Nevertheless, the Court concludedthat its decision triggered the Crown duty to consult:[28] It bears reiterating that the duty to consult is owed by the Crown. In onesense, the "Crown" refers to the personification in Her Majesty ofthe Canadian state in exercising the prerogatives and privileges reserved to it.The Crown also, however, denotes the sovereign in the exercise of her formallegislative role (in assenting, refusing assent to, or reserving legislative orparliamentary bills), and as the head of executive authority [29] By this understanding, the NEB is not, strictly speaking, "the Crown".Nor is it, strictly speaking, an agent of the Crown, since — as the NEBoperates independently of the Crown's ministers — no relationship of controlexists between them As a statutory body holding responsibility unders 5(1)(b) of [the Canada Oil and Gas Operations Act (RSC 1985)], however,108 Clyde River (Hamlet) v Petroleum Geo-Services Inc 2017 SCC 40, [2017] 1 SCR 1069.the NEB acts on behalf of the Crown when making a final decision on a projectapplication. Put plainly, once it is accepted that a regulatory agency exists toexercise executive power as authorized by legislatures, any distinctionbetween its actions and Crown action quickly falls away. In this context,the NEB is the vehicle through which the Crown acts. It therefore doesnot matter whether the final decision maker on a resource project is Cabinetor the NEB. In either case, the decision constitutes Crown action that maytrigger the duty to consult. (Citations omitted)[110] Ms Feint also pointed to examples of land being treated as Crown landnotwithstanding that the Crown was not the registered proprietor. In WanganuiBorough v Wanganui Education Board, the fact that the registered proprietor of landwas the Education Board was not determinative of whether the property was,"in a substantial sense", Crown property.109 On the question of whether land vestedin the Education Board was exempt from being rated on the basis that it was Crownproperty, Chapman J held that "the vesting of the land in the Board is a mere matterof convenience, and that the land is in the fullest sense the property of His Majesty".110[111] Likewise in Ririnui, the Supreme Court held that Landcorp, a state-ownedenterprise, had acted unlawfully in failing to intervene in a proposed sale of Landcorpland that was subject to a claim by Māori.111 Ms Feint drew attention to the fact that,although state-owned enterprises are not Crown agents, the Supreme Court wasinfluenced by Landcorp's statement of corporate intent that it intended to support theCrown in its Treaty obligations and the considerable indirect influence overLandcorp's operations exercised by Ministers.Submissions by the ACC and the Attorney-General[112] The ACC and the Attorney-General took substantially the same position on thisissue, with Mr Gough primarily carrying the argument. He emphasised thatthe Attorney-General was not intervening with the intention of affecting any aspect ofthe ongoing Wakatū litigation. Rather, his position is that, as a matter of general law,obligations of the Crown cannot be enforced against land of which the ACC isthe registered proprietor, whether or not it is properly viewed as an instrument of109 Wanganui Borough v Wanganui Education Board [1923] NZLR 524 (SC) at 526.110 At 527.111 Ririnui v Landcorp Farming Ltd, above n 64.the Crown. He framed the argument as being whether the ACC, as a separate legalpersonality, is arguably a trustee of the land for Wakatū claimants, rather than whetherthe ACC is "part of the executive" and therefore "an instrument of the Crown".[113] Mr Gough relied on the independent status of the ACC as a body corporateunder the AC Act and its predecessors and as provided for by s 15 of the CEA.He argued that the Wakatū proceedings are predicated on the basis that the Crown is alegal person that can incur private law obligations such as debts and equitableobligations and, for the purposes of the Wakatū claim, it is properly viewed as acorporation with its own legal personality capable of owning property and incurringprivate law obligations.112 But such obligations cannot be asserted against a separatelegal person. It is implicit in the relevant provisions of the CEA andthe Public Finance Act that, not only is the Crown not liable for the obligations ofCrown entities such as the ACC, but the ACC is not liable for the liabilities of theCrown. In the absence of any proper basis for imposing the Crown's obligations onthe ACC so that it also becomes liable as a trustee, the obligations under Wakatū cannotbe asserted against the ACC either in proceedings or by way of a caveat.[114] Mr Gough relied on Attorney-General v Lamb in which this Court explicitlyrejected an argument that a claim brought against the ACC out of time was properlytreated as the same as a claim previously brought against a DHB on the basis that bothwere against the Crown.113 He also cited Lord Woolf's observations in M v HomeOffice as showing that, for some purposes including land ownership, the Crown wascapable of separate legal personality:114[A]t least for some purposes, the Crown has a legal personality. It can beappropriately described as corporation sole or a corporation aggregate:per Lord Diplock and Lord Simon of Glaisdale respectively in TownInvestments Ltd v Department of the Environment The Crown can holdproperty and enter into contracts.[115] Mr Gough argued that the separation between the Crown and a Crown entityreflects the purpose of the CEA and clarifies the accountability relationships between112 M v Home Office [1994] 1 AC 377 (HL) at 424.113 Attorney-General v Lamb [2017] NZCA 236, [2017] NZAR 955.114 M v Home Office, above n 112, at 424 (citations omitted), referring to Town Investments Ltd vDepartment of the Environment [1978] AC 359 (HL).entities, responsible Ministers on behalf of the Crown and the House ofRepresentatives.115 In this regard he referred to the Law Commission's 2014 paperA New Crown Civil Proceedings Act for New Zealand.116 The paper concernedthe proposed Crown Civil Proceedings Bill to replace the current Crown ProceedingsAct 1950 for the purposes of conferring on the Crown sufficient legal personality sothat it may be sued and to subject it to the same law, procedure and rules as otherlitigants. Describing the scope of the proposed legislation the Commission observedthat:117 [the proposed statute] only deals with those parts of the government, or thestate, that form part of the Crown, and which therefore cannot sue or be suedwithout statutory provisions. These include the core Governmentdepartments. It would be possible to conceive of another function for aCrown Civil Proceedings Act, that of acting as funnel for all litigation againstthe government or state. In particular, such a statute could deal with litigationagainst Crown entities, some of which, like school boards of trustees or theAccident Compensation Corporation, serve as a major point of interactionbetween New Zealanders and their government.Crown entities are, however, constituted as bodies corporate with the capacityto sue and be sued. These entities fall outside the scope of the 1950 Act, andthe Bill we are proposing. One of the reasons for setting up Crown entities asremoved from the central Crown is to manage risks and liabilities in differentways from how they are managed by the core Crown. This is reflected in thePublic Finance Act 1989, which provides that the Crown is not liable for thedebts of Crown entities, or other agencies or bodies controlled by the Crown.[116] Mr Gough submitted that if the obligations of the Crown could be enforcedagainst statutory corporations such as the ACC on the basis of its control over thatentity, the statutory regime governing the establishment of liability of the Crown andthe enforcement of liabilities against the Crown under the Crown Proceedings Actwould be seriously undermined. In particular, s 24, which limits the means by whichorders obtained against the Crown can be enforced, would not work if a claimant couldchoose to enforce an order made in proceedings against the Crown or a Crown entity.[117] In these circumstances, whether an entity is properly regarded as an instrumentof the Crown for certain purposes cannot affect the separate nature of the legalpersonalities for the purposes of enforcing any claim. Thus, there is no recognised115 Crown Entities Act, s 3.116 Law Commission A New Crown Civil Proceedings Act for New Zealand (NZLC IP35, 2014).117 At [2.12]–[2.13] (footnotes omitted).basis on which the Crown's liabilities could be attributed to the ACC for the purposesof accessing the ACC property. The fiduciary duties asserted by the Wakatū claimantsare entirely unrelated to the ACC; there is no basis on which to suggest that the ACCitself is impressed with a trust or other equitable obligations.Discussion[118] As Collins J discussed, defining the Crown and identifying those entities thatfall within that definition is no easy task. Efforts by both commentators andthe judiciary have produced an array of confusing propositions, including those thatthe Judge canvassed. The legislative treatment of what constitutes the Crown isinconsistent.118[119] Some commentators and judges equate the Crown with the executive branchof government. For example, in Town Investments Ltd v Department of theEnvironment, Lord Diplock considered that:119 instead of speaking of "the Crown" [we should] speak of "the government"— a term appropriate to embrace both collectively and individually all ofthe ministers of the Crown and parliamentary secretaries under whosedirection the administrative work of government is carried on by the civilservants employed in the various government departments. It is through themthat the executive powers of Her Majesty's government inthe United Kingdom are exercised, sometimes in the more administrativematters in Her Majesty's name, but most often under their own officialdesignation. Executive acts of government that are done by any of them areacts done by "the Crown" in the fictional sense in which that expression isnow used in English public law.[120] This statement was cited by this Court in Commissioner of Inland Revenue vMedical Council of New Zealand.120[121] In M v Home Office, Lord Templeman considered that "[t]he expression "theCrown" has two meanings; namely the monarch and the executive".121 This approachis taken also by Professors Hogg, Monahan and Wright, who comment that "[i]n its118 Compare, for example, s 167(2) of the Search and Surveillance Act 2012 under which Crownentities are expressly included in the definition of the Crown, with s 2(1) of the Public FinanceAct, which expressly excludes Crown entities from the definition of the Crown.119 Town Investments Ltd v Department of the Environment, above n 114, at 381.120 Commissioner of Inland Revenue v Medical Council of New Zealand, above n 59, at 327.121 M v Home Office, above n 112, at 395.more common sense, the term the Crown simply refers to the executive branch ofgovernment."122[122] An alternative approach treats the Crown as a corporation. In TownInvestments Lord Simon of Glaisdale explained that:123[The Crown] symbolises the powers of government which were formerlywielded by the wearer of the crown The term "the Crown" is thereforeused in constitutional law to denote the collection of such of those powers asremain extant (the royal prerogative), together with such other powers as havebeen expressly conferred by statute on "the Crown." "the Crown" and "Her Majesty" are terms of art in constitutional law.They correspond, though not exactly, with terms of political science like"the Executive" or "the Administration" or "the Government", barely knownto the law, which has retained the historical terminology. If such terms as "aspects of the Crown" or "emanations of (or 'from') theCrown" or "participants of royal authority" are considered to be too cloudyfor legal usage, the legal concept which seems to me to fit best thecontemporary situation is to consider the Crown as a corporation aggregateheaded by the Queen. The departments of state including the Ministers at theirhead (whether or not either the department or the minister has beenincorporated) are then themselves members of the corporation aggregate ofthe Crown. [123] Dame Alison Quentin-Baxter and Professor Janet McLean also explainthe Crown as a corporation:124The Sovereign acting in her political, as distinct from her personal, capacityis considered to be a special kind of common law corporation — usually(though not always or necessarily) referred to as "the Crown". It is because the idea of the Crown as a corporation has had to do such a lot ofwork, including adapting rules originally designed for a time of personal ruleto modern parliamentary and bureaucratic government, that the exact natureof the Crown as a corporation remains somewhat obscure. The common lawis not settled about the precise characteristics of this special corporation andthe case law is sparse, confusing and mainly English in origin. Ministers andpublic servants are sometimes considered to be the means by which the Crown122 Peter W Hogg, Patrick J Monahan and Wade K Wright Liability of the Crown (4th ed, Carswell,Toronto, 2011) at 12.123 Town Investments Ltd v Department of the Environment, above n 114, at 397–400.124 Alison Quentin-Baxter and Janet McLean This Realm of New Zealand: The Sovereign,The Governor-General, The Crown (Auckland University Press, Auckland, 2017) at 40(original emphasis).acts but not as constituting the Crown itself. Sometimes Ministers have beentreated as the Crown's "alter ego". Another view is that the Sovereign,Ministers and public servants together constitute the Crown as a corporationaggregate.[124] Ms Feint took the approach of the Crown as a corporation aggregate; from herperspective, the ACC's status depends in part on the obligations assumed by the Crownin the context of the Treaty so that simply equating the ACC with the executive wouldbe inadequate. The question whether an incorporated entity is sufficiently under thecontrol of its Minister to treat that entity as an instrument of the Crown typically arisesin the context of a claim of an immunity enjoyed by the Crown.125 The courts havebeen restrained in the application of the test and slow to confer immunity beyond whatis regarded as necessary.126 In this case, however, Ms Feint says that a more generousview should be taken as to the ACC's status as a result of the constitutional overtonesin the case. For present purposes, and without deciding that issue, I proceed on thebasis advanced by Ms Feint.[125] I start by considering the ACC's status by reference to the relevant statutoryprovisions. Professor Joseph considers that "[t]he control test is determinative ofthe Crown's reach, subject to any express statutory stipulation that a body is or is not'the Crown' or 'an instrument of the Executive Government of New Zealand'."127Undoubtedly, the Minister exercises significant control over the ACC. Despite itsmode of operation (akin to a mutual insurer) the ACC is closely tied to the executivein terms of reporting obligations and corporate intent. The Minister controls theconstitution of the Board of Corporation.128 The Board must consult with the Ministeron the appointment of a chief executive and with the State Services Commissioner onterms and conditions.129 The ACC must enter into a service agreement with theMinister, which is treated as a statement of performance expectations for the purposes125 See for example Commission of Inland Revenue v Medical Council of New Zealand, above n 59.126 Townsville Hospitals Board v Council of the City of Townsville[1982] HCA 48, (1982) 149 CLR282.127 Joseph, above n 60, at 17.17.2.6(1) citing Miller v New Zealand Railways Corp [2011] NZAR 21(HC) at 24.128 Though this has never been regarded as decisive: See Commissioner of Inland Revenue v MedicalCouncil of New Zealand, above n 59; Metropolitan Meat Industry Board v Sheedy [1927] AC 899(PC).129 Accident Compensation Act, sch 5 cl 17; Crown Entities Act, s 117.of s 149E of the CEA.130 It must prepare a statement of intent.131 If required by theMinister of Finance, it must supply financial forecasts and information relating to theamount the ACC expects to receive from the Crown.132 Its financial reporting mustcomply with the CEA.133 It has the power to borrow, but only in accordance withprocedures approved by the Minister of Finance.134[126] The ACC's power to invest is subject to policy direction given under s 103 butit is not subject to ministerial control in terms of operational decisions. It is for theACC to manage the scheme in accordance with the AC Act.135 Challenges to itsdecision making, including the setting of levies and entitlement to compensation,are determined in accordance with the statutory process for dispute resolution thatbegin with internal reviews and which may, ultimately, be determined on appeal tothe High Court or this Court.[127] By reason of its significant investment function the ACC is referred to as aCrown Financial Institution and classified by Cabinet as an "Investment-IntensiveAgency". However, neither the responsible Minister nor the Minister of Finance areinvolved in investment decisions, which are operational. A sub-committee of theBoard, the Board Investment Committee, is responsible for developing and approvingthe ACC's investment strategy, policies and guidelines. Committee membershipcomprises both Board and external members. Day-to-day decisions are undertaken bymembers of a specialist investment team under the management of the Chief FinancialOfficer. This team, in turn, comprises specialist teams responsible for specific typesof investment.[128] Real property is one investment type favoured by the ACC for the reasonsalready noted. Investment is not confined to acquisition, however; the decisionwhether and when to divest is integral to the management of investments, even in thecase of long-term investments for the purpose of, for example, realising value or toreduce exposure in a changing market. The ACC is subject to the usual statutory130 Accident Compensation Act, s 271(3A).131 Section 272.132 Section 273.133 Section 278.134 Section 276(1).135 Section 165.constraints of disposal such as those imposed by the Public Works Act and the LandAct 1948. In addition, government policies exist that require Crown agencies toidentify property held by them that have particular characteristics, specifically natural,recreational, historical and/or cultural values. Of relevance in this case is the"Protection Mechanism" which is a process for land banking surplus Crown-ownedland for Treaty of Waitangi settlements. However, the Protection Mechanism currentlyapplies on a case-by-case basis and the ACC is not subject to it.136[129] Importantly, a Crown agent is not necessarily an instrument of the Crown forall purposes. The Judge made this point in his discussion.137 It is illustrated byTownsville Hospital Board v Council of the City of Townsville, where the issue waswhether the erection of a building by a hospital board was done "on behalf of theCrown" in determining whether the hospital board was bound by a building by-law.138Gibbs CJ observed:139 it would be more precise to say that the question is whether the Board,in erecting the building, enjoys the privileges and immunities of the Crown.It is possible that the Board might be given the immunities and privileges ofthe Crown for one purpose and not for another [130] I consider that the ACC is properly regarded as under the control of the Crownto the extent that ministerial control exists under the relevant legislative provisions.But the Minister does not control operational aspects of the ACC's operations,including the investment function. On an orthodox analysis, there is no basis on whichto find that the ACC's decision to either buy or sell an investment property can beregarded as subject to ministerial control sufficient to treat the ACC as an instrumentof the Crown in that respect.[131] This brings me to the question whether this conclusion is affected by thespecific context of this case. Whereas the finding of an entity to be an instrument ofthe Crown for the purposes of, for example, a statutory immunity tends to be cautious,Ms Feint's argument would see a more expansive approach taken on the basis that the136 Letter from Office of Treaty Settlements to the ACC regarding the Protection Mechanism (17January 2018).137 Accident Compensation Corporation v Stafford, above n 24, at [75(2)].138 Townsville Hospitals Board v Council of the City of Townsville, above n 126.139 At 288.Crown's involvement in the Nelson tenths occurred against the background of theobligations assumed under the Treaty of Waitangi and that its fiduciary obligationsought to be interpreted consistently with the Treaty. She noted that the ACC has statedin both its 2015–19 Statement of Intent and its 2017 Annual Report that it will supportthe Crown in its Treaty relationship.[132] I do not exclude the possibility of this argument succeeding in another case butit cannot do so in this case. The means by which breaches of Treaty obligations areremedied is the subject of well-settled policies and processes, including the policyaround land banking surplus Crown properties. As discussed, the ACC is not(presently at least) subject to those policies. The argument being advanced wouldresult in the ACC property being made available to satisfy a potential Crown liabilityunder Wakatū when it would not be available for the purposes of a Treaty settlement.In reality, the only argument that could be advanced to support that outcome is the factthat there may not be sufficient Crown-owned land in Nelson to meet the Wakatūliability but, for the reason I come to next, I do not consider that this possibilitywarrants such an outcome.[133] It is evident from my earlier discussion that the ACC fulfils a unique functionin New Zealand society. The accident compensation scheme is fundamentallydifferent to many other operations run by Crown entities. In order to discharge itsstatutory obligations to those entitled to compensation it must manage its investmentportfolio effectively. Most of its income comes directly from levy payers and it isobliged to invest that income as if it were a trustee. It is statutorily precluded fromlooking to the Crown for any shortfall. Thus, those paying levies and seekingentitlements under the Work, Motor Vehicle or Earners' Accounts will be directlyaffected by a failure of the ACC's investment decisions to produce sufficient return tosupport the statutory scheme. Even taking an expansive view of whether an entitymight constitute the Crown I consider that it is not arguable that the ACC could becharacterised as such in relation to one of its core operational functions over whichthere is no ministerial control. This is a question of principle: the fact that theparticular property in question represents a minimal proportion of the ACC's overallassets is not the point.ISSUE 2: Is it reasonably arguable that Mr Stafford has a caveatable interest?The case in the High Court[134] Despite finding that the Minister could have directed the ACC not to sellthe property so that it could be applied towards liability under Wakatū (albeit on thebasis of the CEA rather than the common law control test), the Judge concluded thatthe lack of a specific direction was fatal to Mr Stafford's argument in the context ofs 137 of the LTA 1952 which required Mr Stafford to show that he derived the claimedproprietary interest from the registered proprietor of the land:140[94] The lacuna in the reasoning advanced on behalf of Mr Stafford is thatthe ACC property can only be applied towards addressing any claimMr Stafford may successfully pursue against the Crown if Ministers [issue adirection pursuant to ss 103 or 107(1)(e) of the Crown Entities Act].The unexercised ministerial powers of direction I have explained do notgive Mr Stafford a caveatable interest in this case. This is because Mr Staffordcould not establish a beneficial interest in the land unless Ministers assert theircontrol over ACC. In that respect, Mr Stafford is in much the same positionas a discretionary beneficiary of a trust, who also lacks a caveatable interestin trust property.141[95] This unfortunate dilemma for Mr Stafford arises because he hasendeavoured to use the blunt caveating provisions of the Land Transfer Act toachieve a short-term remedy to a very complex constitutional and legal issue.Unfortunately for him, Mr Stafford cannot circumvent the requirements ofs 137 of the Land Transfer Act that he derive his claimed beneficial interest inthe ACC property from the registered proprietor. Section 137(2)(c) mandatesthat a caveat contain information on how the claimed interest is derived fromthe registered proprietor. This requirement reflects an underlying principle inthe Land Transfer Act that a beneficial interest in land under s 137(1)(a) mustin fact be derived from the registered proprietor.142The respective arguments on appealMr Stafford[135] On the basis that the ACC was an instrument of the Crown and its land Crownland (a proposition that I have rejected), Ms Feint asserted that it was reasonablyarguable that Mr Stafford could establish a proprietary interest in the land.140 Accident Compensation Corporation v Stafford, above n 24.141 Rutherford v Rutherford [2015] NZHC 878, [2015] NZAR 1303 at [18].142 See for instance Pragma Designer Homes Ltd v Jiang [2016] NZHC 677 at [22]; Mahon v TheStation at Waitiri Ltd [2017] NZHC 631 at [39]–[41], affirmed in Mahon v The Station at WaitiriLtd [2017] NZCA 387, (2017) 18 NZCPR 760 at [33]–[37]and Edith Farms Ltd v ProvidenceLands Ltd [2013] NZHC 3108 at [27]–[29].[136] She says the Judge made three specific errors. First, that the Judge treated thethreshold of reasonable arguability as more onerous than it is; specifically that thethreshold requires that the caveat be sustained unless it is "patentlyunmaintainable".143 Secondly, the Judge's reliance on cases involving discretionarybeneficiaries was misplaced. Thirdly, the Judge's approach failed to recognise thatthe proper characterisation of the rights of a discretionary beneficiary may vary withcontext and that authorities demonstrate that where it would be fair, just and reasonableto allow a beneficiary to lodge a caveat that can be accommodated.144[137] Ms Feint acknowledged that there are difficulties in treating land that haspassed out of Crown ownership and later reacquired as impressed with a trust.145However, she argued that when the High Court determines this issue, it can reasonablybe expected to take account of Glazebrook J's observations in Wakatū that a trusteecannot reacquire land free from its fiduciary obligations to the customary owners; thatstatement provides support for the argument that all land within the Spain award areathat is Crown land today is held by the Crown on trust for the descendants of thecustomary owners.146[138] Ms Feint also relied on other dicta in the Supreme Court decision as to certaintyof subject matter to constitute a trust which suggested that the Crown's liabilities couldbe satisfied by the substitution of other Crown land where the land that should havebeen reserved was no longer available. She submitted that such an approach would beconsistent with the practice of the Crown to provide Crown agent-owned land forTreaty settlements and with the body of case law holding that statutory powers shouldbe interpreted and applied consistently with Treaty principles even in the absence of aTreaty clause.147 So, although only part of the ACC property was originally part ofthe tenths sections, the whole property is claimed on the basis that the Crown'sfiduciary obligation to reserve land in the Nelson area could be fulfilled by treating all143 Relying on Philpott v NZI Bank Ltd above n 31, at 190, 249.144 Citing Costa & Duppe Properties Pty Ltd v Duppe [1986] VR 90 (VSC).145 James Roscoe (Bolton) Ltd v Winder [1915] 1 Ch 62 at 68–70.146 Proprietors of Wakatū v Attorney-General, above n 4, at [586].147 See Tukaki, above n 99, at [35]–[41]. It is relevant to Mr Stafford's case that the Attorney-Generalhas previously conceded there may not be adequate land in central Nelson to discharge theobligations the Crown might ultimately be found to have (depending, among other things, on whatland is defined as Crown land for the purposes of the Wakatū proceedings: See reasons judgment,above n 28, at [9].Crown land in that area as held by the Crown on an institutional constructive trust forthe descendants of the customary owners. For example, equitable interests arise as aresult of the shortfall in the land that should have been reserved.[139] Further, Ms Feint referred to there being "some support" for the propositionthat a proprietary claim should be available against any free assets that the trusteeowns as long as the trust's overall asset position can still be said to be swollen byhaving misappropriated trust assets.148 In the unique circumstances of the tenths case,Ms Feint argued that it was "not such a stretch" to apply these principles so as torecognise Mr Stafford's claim to an equitable interest in the ACC property asreasonably arguable. She submitted that the Judge had wrongly treated Mr Staffordas in a similar position to a discretionary beneficiary under an "ordinary" trust, withno present interest. The Judge had failed to recognise that the character of adiscretionary beneficiary may vary according to context.149 The present case hadimportant distinguishing features, namely that it involves Māori ancestral land, theCrown as sui generis fiduciary and Mr Stafford as a single representative beneficiarywith standing to enforce the asserted trust. Ms Feint pointed out that, on the approachtaken in the High Court, it will not be until the conclusion of the Wakatū proceedings,with a determination as to what constitutes Crown land within the relevant area, thata proprietary interest sufficient to support a caveat will be found, by which time theCrown may have alienated such land.[140] Finally, in making this submission Ms Feint compared the outcome that wouldresult from Collins J's approach with that taken in Proprietors of Wakatū vAttorney-General in which Clifford J held that the proprietors of Wakatū Inc wereentitled to caveat land owned by the Crown in the Nelson area which was identifiedas having originally comprised part of the Nelson tenths or land that should have beenotherwise reserved as part of a pā.150 That case was, however, very different from thepresent because it proceeded on the basis that the land in issue was to be treated as148 Liggett v Kensington [1993] 1 NZLR 257 (CA) at 275. This decision was reversed on appeal(Re Goldcorp Exchange Ltd (in rec) [1994] 3 NZLR 385 (PC)), though doubt was also expressedover this decision.149 Geraint Thomas Thomas on Powers (2nd ed, Oxford University Press, Oxford, 2012) at 143. Seefor example Costa & Duppe Properties Pty Ltd v Duppe, above n 144.150 Proprietors of Wakatū v Attorney-General [2014] NZHC 1785.Crown land. The subject properties were three Nelson schools. One was described asa "deferred selection property" under the Crown's settlement arrangements withRangitāne o Wairau.151 Two were "commercial redress properties" under settlementarrangements with Ngāti Rārua and Ngāti Koata respectively.152 The focus ofthe argument was on the nature of the claimed interest, not on the status of the land.The respondent's and Attorney-General's argument[141] Again, the ACC and Attorney-General took substantially the same position.Both argued that the caveat could not be sustained, regardless of whether the ACC wasan instrument of the Crown and in circumstances where a direction could have beenmade under ss 103 or 107. This submission rested squarely on the core tenet of theTorrens system: indefeasibility of land title through registration. In the context of theLTA 1952, a caveat cannot be sustained against land registered in the name of onelegal person on the basis of a claim against another without the caveator being able toidentify an interest derived from the registered proprietor itself. The parties arguedthat Mr Stafford could not point to any such interest; his claim arose solely from thefiduciary obligations owed by the Crown. Those obligations could not be enforcedagainst the entirely separate registered proprietor.[142] Mr Gough took as an example of the strictness of that principle this Court'sdecision in Mahon v Station at Waitiri Ltd, in which a shareholder with 100 per centof a company's shares was held not to have a caveatable interest in the assets ofthe company on the following ground:153If a commercial party chooses to hold an entity through a company, then thatis a choice that they have made and by which they must be bound. A partycannot utilise an incorporated structure for the benefits that it brings them butthen disavow the necessary legal consequences of the use of that structurewhen it suits. To hold otherwise would undermine the basic concepts ofincorporation and limited liability. It would run counter to the clear doctrineof separate legal personality as enshrined in s 15 of the Companies Act 1993.[143] Mr Gough also submitted that Mr Stafford could not assert an equitable interestin the land because, to the extent that a part of the land (section 443) was retained as151 At [16].152 At [17].153 Mahon v Station at Waitiri Ltd, above n 142, at [37].a "tenths" section, it was subsequently transferred to the Public Trustee in 1882 so thatany claim in relation to dealings with the land would lie against the trustee at the time(which was not the Crown). Secondly, to the extent that the other parts of the propertydid not form part of the "tenths" area there was no basis for arguing that the Crownbreached any duty in relation to those parts. Further, any equitable interest that mighthave been able to be asserted in relation to any part of the land was extinguished whentitle to the land was registered in the name of persons other than the Crown underthe LTA 1952.Discussion[144] As the Judge identified, this issue is one to be determined by reference tothe provisions of the LTA 1952, s 62 of which provides that the registered proprietorof a property shall hold the land "absolutely free from all other encumbrances, liens,estates, or interests whatsoever" except in the limited circumstances prescribed bythe Act or fraud.[145] This reflects the principle of indefeasibility of title under the Torrens system,explained by this Court in Fels v Knowles:154The cardinal principle of the statute is that the register is everything, and that,except in cases of actual fraud on the part of the person dealing withthe registered proprietor, such person, upon registration of the title underwhich he takes from the registered proprietor, has an indefeasible title againstall the world.[146] At the relevant time, s 137 of the LTA 1952 permitted a person claiming abeneficial interest in a property to lodge a caveat against the property on specificgrounds, one of which was that the caveator claimed to be beneficially interested inthe land by virtue of a trust.155 A caveat was (and still is) required to disclose certaininformation, including how the claimed interest came to be "derived from theregistered proprietor".[147] At the time Mr Stafford lodged the caveat, s 137 of LTA 1952 provided that:154 Fels v Knowles (1906) 26 NZLR 604 (CA) at 620.155 Land Transfer Act 1952, s 137(1)(a). This provision, in an amended form, now appears in s 138of the Land Transfer Act 2017.137 Caveat against dealings with land under Act(1) Any person may lodge with the Registrar a caveat in the prescribedform against dealings in any land or estate or interest under this Actif the person—(a) claims to be entitled to, or to be beneficially interested in, the landor estate or interest by virtue of any unregistered agreement orother instrument or transmission, or of any trust expressed orimplied, or otherwise; or(b) is transferring the land or estate or interest to any other person tobe held in trust.(2) A caveat under this section must contain the following information:(a) the name of the caveator; and(b) the nature of the land or estate or interest claimed by the caveator,which must be stated with sufficient certainty; and(c) how the land or estate or interest claimed is derived from theregistered proprietor; and(d) whether or not it is intended to forbid the making of all entriesthat would be prevented by section 141 or a specified subset ofthem; and(e) the land subject to the claim, which must be stated with sufficientcertainty; and(f) an address for service for the caveator.(Emphasis added)[148] Thus, Mr Stafford had to show that it was reasonably arguable both that he hasa proprietary interest in the ACC property by virtue of a trust and that the interest"derived from the registered proprietor".[149] If the ACC property had been reacquired by the Crown directly I would notreject as unarguable the proposition that Mr Stafford could assert an institutionalconstructive trust. This was the position in Proprietors of Wakatū v Attorney-Generalin which Clifford J accepted that the asserted claim of an institutional constructivetrust in relation to land held by the Crown was reasonably arguable and granted anapplication that caveats over the land not lapse.156 But, as I have already noted, there156 Proprietors of Wakatū v Attorney-General, above n 150.was no issue in that case as to whether the land was to be treated as Crown land.That is not the position here.[150] The ACC was a bona fide purchaser for value without notice of the Crown'sfiduciary obligations. It is not an instrument of the Crown for purposes beyond thosefunctions over which the Minister has control. Those functions do not include itsinvestment function, which is operational and not subject to ministerial oversight.It does not owe any fiduciary obligations of the kind found in Wakatū. It has noobligation to make good a Crown liability that is unrelated to its statutory functions.In these circumstances it is not arguable that Mr Stafford has a proprietary interest inthe ACC property arising from the Crown's fiduciary obligations.[151] Nor can I agree with the possibility raised by Williams J of an in personamclaim against the ACC based on its status as the Crown's agent. The parameters of anin personam claim against a registered proprietor was discussed by this Court inDuncan v McDonald:157Registered title is subject to a further qualification namely that theregistered proprietor may be subjected to claims arising out of his or herpersonal conduct (in personam claims) whether that conduct occurred beforeor after registration. Registered proprietors may be required to hold theirestate or interest, and to deal with it, so as to give effect to obligations withwhich they have burdened themselves at law or in equity so long asenforcement of those claims is not inconsistent with the objective of theTorrens system. It is a question of fact and degree when a registered proprietor's behaviourwill give rise to an equity of sufficient strength to support an in personamclaim Before a registered proprietor is susceptible to an in personam claimit must be shown that he or she has acted or is acting unconscionably inobtaining or taking advantage of the registered interest, but the registeredproprietor's conduct need not have involved actual dishonesty towards the inpersonam claimant.(Emphasis added)[152] The ACC's conduct is not in issue. It is a separate legal entity that, as noted,does not owe any duty of the kind recognised in Wakatū. The only conduct said tohave been unconscionable is that of the Crown. Asserting an in personam claim157 Duncan v McDonald [1997] 3 NZLR 669 (CA) at 683. See also CN and NA Davies Ltd v Laughton[1997] 3 NZLR 705 (CA) and Nathan v Dollars & Sense Finance Ltd [2007] NZCA 177, [2007]2 NZLR 747 at [137].against the ACC on the basis of the Crown's conduct would require imputing aprincipal's knowledge and conduct to its agent. This is an entirely differentproposition from merely treating land owned by an instrument of the Crown asCrown land. The fact that the ACC is a Crown agent does not make the Crown'sknowledge and conduct that of the ACC. There is no factual or legal basis on whichthat might be asserted. The appeal was not argued in this way and I do not see it asreasonably arguable.[153] This conclusion means that the appeal must be dismissed and an order madefor the removal of the caveat. In his written submissions Mr Stafford sought, in theevent that such an order was made, an interim order under s 143(2) of the LTA that thecaveat remain in place pending a final decision of the Supreme Court (whetherdeclining leave to appeal or determining an appeal). The ACC opposed that course.It does not accept that a discretion exists to make such an order; rather, Mr Staffordwould need to apply for a stay in the usual way.[154] I consider the most appropriate course is to make an order that the caveat beremoved but direct that the order lie in court for 20 working days to allow Mr Staffordto make an application for stay pending an application for leave to appeal to theSupreme Court. Leave will be reserved to seek to vary the period for which the orderwill lie in court in the event that 20 working days is insufficient.Result[155] The appeal is dismissed. There is an order that the caveat be removed, whichis to lie in court for 20 working days. Leave is reserved to the parties to seek to varythat period.[156] The cross-appeal is dismissed.Costs[157] The ACC seeks costs for a standard appeal on a band A basis, with certificationfor second counsel, plus usual disbursements. Costs are granted on that basis.WILLIAMS JTable of ContentsPara No.Introduction [158]BackgroundThe New Zealand Company purchase [162]The sale of Morrison Square [168]Sale cancelled [175]The High Court judgment [178]Appeals [182]Submissions [185](a) Availability of Morrison Square to meet Crown liabilities [186](b) Beneficial interest sufficient to support the caveat [191](c) Discretion to sustain a caveat [197]Issues [198]Caveats and the appropriate standard [198]Six questions [201]The accident compensation scheme [207]The Accident Compensation Corporation [209]The extent of ministerial control [219]Government policy directions [224]Crown Entities Act 2004 reform [225]Crown entity-wide accountability and control [227]Accountability and control of statutory entities [235]Control of Crown agents [238]Preliminary conclusions [242]Issue 1: Is it reasonably arguable that the Minister can make aWakatū direction to ACC under s 103 of the CEA? [247]Issue 2: Is it reasonably arguable that the Minister can make aWakatū direction to ACC under s 107 of the CEA? [269]Issue 3: Is it reasonably arguable that s 113 of the CEA is not a barto a Wakatū direction under either s 103 or s 107? [280]Subsection (1): protection against ministerial interference [283]Subsection (2): protection against CEA override [296]Issue 4: Is it reasonably arguable that ACC is the Crown or fixedwith the Crown's fiduciary obligation for the purposes of thecaveat?Introduction [299]"Crown agents" under the CEA [308](i) The AC Act [312](ii) Other Crown definitions [313](iii) Crown Proceedings Act [317](iv) Crown land [319](v) Indefeasibility [320](vi) Conclusion [327]The control test [329](i) Privilege vs obligation [331](ii) Statutory controls [343](iii) Control in practice [347](iv) The Treaty [361](v) Conclusion [367]Shared responsibility [368]Floodgates? [371]Issue 5: Is it reasonably arguable that the Crown owes a fiduciaryobligation to hold Morrison Square for Tauihu iwi? [375]Issue 6: Should the Court deal with a moot question, and if so, isthere a discretion under s 143 of the LTA 1952 to sustain a caveatwhere no reasonably arguable case was found? [382]Summary [389]Conclusion [394]Introduction[158] In 2017, the Supreme Court in Proprietors of Wakatū v Attorney-General foundthat the Crown owed the descendants of the original customary owners of Te Tauihuo te Waka-a-Māui158 (the Nelson-Marlborough region) extant fiduciary obligationsarising from the transfer of their lands to the New Zealand Company during the earlycolonial period.159 The fiduciary obligation required the Crown in 1845 to reserve forthose customary owners 15,100 acres in Nelson-Marlborough, together with their pā,urupā and cultivations.160 In 1893, 253 living beneficiaries of this obligation wereidentified and listed by the Native Land Court. They comprised members of thevarious hapū of Te Atiawa, Ngāti Rārua, Ngāti Tama and Ngāti Koata iwi. Theirdescendants now number in the thousands.161 For the sake of brevity, I will call themthe Tauihu iwi, and the relevant region Te Tauihu.158 Literally: the prow of Maui's canoe. "Maui's canoe" — "Te Waka-a-Māui" — is one of twocommonly used Māori names for the South Island.159 Proprietors of Wakatū v Attorney-General [2017] NZSC 17, [2017] 1 NZLR 423.160 At [1], [495] per Elias CJ, [718] per Glazebrook J and [827] per Arnold and O'Regan JJ.161 "2013 Census iwi individual profiles" (2013) Stats NZ/Tatauranga Aotearoa<archive.stats.govt.nz>.[159] The first respondent, the Accident Compensation Corporation (ACC), ownscommercial land in the city of Nelson. It agreed to sell that land to a privatecommercial property investor.[160] The appellant, Mr Stafford, is a kaumātua and rangatira of Ngāti Rārua andNgāti Tama. The Supreme Court accepted that, as plaintiff in the substantiveproceeding, he represents all the descendants of the 1893 list of beneficiaries.162He lodged a caveat against the ACC land to prevent further dealings in it. ACC,already committed to a sale, applied to the High Court for its removal.[161] Is it reasonably arguable that ACC is fixed with the Crown's fiduciaryobligation in respect of its real estate in Nelson?BackgroundThe New Zealand Company purchase[162] The full historical background to this litigation is set out in the substantivejudgment of the Supreme Court in Wakatū. That background is complex, which iswhy it consumed a significant proportion of each of the four opinions comprising the954 paragraphs of the report. For the purposes of this appeal, only the briefest ofoutlines is required.[163] In 1839, the New Zealand Company purported to purchase Te Tauihu.163 Theterms of that purchase included promises to reserve for the customary owners onetenth of the area purchased. The land reserved for those owners came to be known asthe Nelson Tenths, even though, on any assessment, the actual acreage fell well shortof that. There are equivalents in the Wellington and Palmerston Tenths which werealso created out of New Zealand Company purchases.162 Wakatū, above n 159, at [494] per Elias CJ and [807] per Arnold and O'Regan JJ.163 Whether Tauihu iwi thought the transaction was a "sale" according to English law, given it wasentered into (a) before the formal arrival of that law and (b) with communities who lacked both aconception of sale and proficiency in the language used to convey that meaning, is a matter thatneed not detain us here. But see the Waitangi Tribunal's analysis of the meaning of pre-Treatytransactions in Waitangi Tribunal Muriwhenua Land Report (Wai 45, 1997) at ch 3; and, in relationspecifically to Te Tauihu: Waitangi Tribunal Te Tau Ihu o te Waka a Maui: Report on NorthernSouth Island Claims (Wai 785, 2008) vol 1 at [4.8].[164] Following acquisition of British sovereignty in 1840, the Land ClaimsOrdinance 1841 made it clear that land purchases made before the signing of the Treatyof Waitangi were invalid unless confirmed by Crown grant. Such recognition wouldonly be provided if and to the extent that the purchases were made on fair and equitableterms according to the standards contained in sch B to the Ordinance.164 Crowncommissioners were accordingly appointed under the Ordinance to investigate suchpurchases with a view to making Crown grants.165 Charged with investigating theCompany's claims in Te Tauihu was Commissioner William Spain. He issued hisaward in 1845 but because the Company was unhappy with the result, furthernegotiations with the Crown ensued. A Crown grant for 151,000 acres was finallyaccepted by the Company in 1848, although this was for less than the area theCompany actually claimed.[165] In addition to the original promise to reserve to Te Tauihu one tenth of the landacquired, the Crown grant also specifically excluded existing pā, urupā andcultivations (that is, the lands the iwi actually occupied at the time). The Tenths wereto comprise 100 acres of town allotments, 5,000 acres of suburban allotments, and10,000 acres of rural allotments. These reserves became unallocated Crown landunencumbered by any Company interest.[166] The Company failed in 1850 and the Crown took over its obligations to Tauihuiwi. The Tauihu iwi case is that the promises made by the Company to their ancestors,and taken on by the Crown, were not fulfilled.164 Land Claims Ordinance 1841, ss 2–3. The consideration in all pre-Treaty transactions was bartergoods rather than cash. Schedule B provided that the barter goods would be valued at three timestheir Sydney price at the time of the transaction. The Schedule then provided a sliding scale ofdeemed prices per acre depending on when the transaction occurred — for example, the deemedfair price in 1815 was six pence per acre but in 1839 it was eight shillings per acre. But sch B wasnot applied to the New Zealand Company purchases. Instead, by agreement, the Company wasawarded four acres for every pound it had spent on settlement. Even the deemed sch B value ofgoods given to Tauihu iwi would have been a tiny proportion of this expenditure. See WaitangiTribunal Te Tau Ihu o te Waka a Māui, above n 163, at [4.7].165 Section 3.[167] In Wakatū, a majority of the Supreme Court found that the Crown's obligationsto Tauihu iwi were fiduciary in nature and justiciable in the ordinary courts.166 As aresult, the Limitations Act 1950 did not prevent the claim from being tested in theordinary way.167 With that crucial principle established, the proceeding was thenremitted back to the High Court for final determination of liability, loss and remedy.168It is, I think, common ground that only a relatively small portion of the area that shouldhave been reserved to Tauihu iwi, was. Actual proportions are contested, particularlywith respect to the town allotments, but it is unnecessary to enter into that debate hereexcept in one respect to which I will return later in this judgment.The sale of Morrison Square[168] ACC owns a commercial development in Nelson known as Morrison Square.It comprises approximately 5,800 square metres in 11 titles and is situated on MorrisonStreet. It forms a very small part of ACC's multi-billion-dollar investment portfolio.The portfolio is one of the means by which ACC prepares to meet future entitlementsunder the Accident Compensation Act 2001.[169] Morrison Square overlaps with about a third of what was Section 443. Thissection was originally a one-acre lot that was set aside for Tauihu iwi in the 19thcentury as one of the promised town allotments. The rest of Morrison Squarecomprises Section 442 and part of Section 439. These sections had been originallyallocated to settlers in the New Zealand Company scheme. I set out below a diagramof the 11 modern Morrison Square titles superimposed over the three original sections.166 Wakatū, above n 159, at [1], [495] per Elias CJ, [718] per Glazebrook J and [827] per Arnold andO'Regan JJ. Within that majority, Elias CJ and Glazebrook J went further and found the Crownto be an express trustee in relation to the promised reserves: at [393] and [416] per Elias CJ, and[572] and [586] per Glazebrook J.167 At [4], [450]–[454] per Elias CJ, [685] per Glazebrook J and [815] per Arnold and O'Regan JJ.The issue of laches was remitted to the High Court: at [4], [462] per Elias CJ, [691] and [696] perGlazebrook J and [818] per Arnold and O'Regan JJ.168 At [6]–[7].[170] As with all of the Nelson Tenths still in Māori title in 1882, Section 443 wasvested by special legislation in the Public Trustee to be administered on behalf of thecustomary owners. Responsibility was later transferred to the Native Trustee after thatoffice was established in 1920, and the Māori Trustee later sold the part of the propertyoverlapping with Morrison Square in 1970.169 In 2008, ACC acquired that part oncommercial terms along with the other titles forming Morrison Square.[171] On 15 September 2017, ACC entered into an agreement to sell MorrisonSquare to a private commercial property investor.169 The office of the Native Trustee was renamed the "Māori Trustee" in 1947 by s 2(1) of the MāoriPurposes Act 1947.[172] On 26 January 2018, before the sale could be settled and the transfer registered,Mr Stafford lodged his caveat.170 The estate or interest claimed arose from the Wakatūdecision. It was relevantly described in the following terms:1. The Caveator claims a beneficial interest in the RegisteredProprietor's land described in Schedule A attached (the "Land") byvirtue of a trust express or implied in respect of the Land held by theRegistered Proprietor as trustee for the benefit of the Caveator asbeneficiary.2. The Caveator's beneficial interest in the Land is recognised in theSupreme Court judgment of Proprietors of Wakatū et al vAttorney-General [2017] NZSC 17.3. The document attached as Schedule B sets out the connection betweenthe interest claimed by the Caveator and the Registered Proprietor.[173] Schedule B set out in some detail the reasons advanced by Mr Stafford as towhy ACC should be treated as the Crown. These were essentially that it is declared tobe a "Crown agent" and that it is subject to Crown control.[174] On the same day, ACC applied to remove the caveat, arguing that it was notthe Crown and owed no fiduciary or trust-like obligations to Mr Stafford or Tauihuiwi. In the High Court, Collins J held that Mr Stafford did not have a reasonablyarguable basis upon which to sustain the caveat, but purported to exercise a discretionto maintain it for one month to allow the responsible Minister to consider whether toissue a direction to ACC forbidding sale of any land the subject of a claim by Māori.171The Minister had given no such direction by 12 March 2018 when Mr Stafford filedhis appeal against Collins J's decision. Mr Stafford also sought to stay the High Courtorder lapsing the caveat on expiry of the month. Collins J granted the stay.172170 Two forms were initially rejected by Land Information New Zealand on 23 and 28 November2017. After those decisions were upheld by the Registrar-General of Land, Mr Stafford broughtjudicial review proceedings challenging that decision. The proceedings were discontinued whenthe Registrar accepted the caveat on 26 January 2018.171 Accident Compensation Corporation v Stafford [2018] NZHC 218, [2018] 2 NZLR 861 [HighCourt judgment] at [94] and [97].172 The stay was granted in a results judgment: Accident Compensation Corporation v Stafford [2018]NZHC 429. For reasons, see Accident Compensation Corporation v Stafford [2018] NZHC 488.Sale cancelled[175] The agreement for sale of Morrison Square has since been cancelled. In lightof this, on 29 March 2018 the Attorney-General indicated to Mr Stafford that adirection in the terms tentatively suggested by Collins J was no longer necessary butthat he would consider whether a wider direction could or should be made to Crownentities with properties in Te Tauihu.[176] Mr Stafford commenced judicial review proceedings against the Minister on10 May 2018, by which date the Minister had still given no indication of whether hewas prepared to issue a general direction. The thrust of that application was that theMinister had failed within reasonable time to make a direction he was bound byWakatū to make. Mr Stafford subsequently applied to transfer that application to thisCourt so that it could be consolidated with the present appeal.173 The application wasdeclined.174[177] The cancellation of the sale has removed the urgency of this appeal, but theissues remain as to what ACC's position is in relation to Morrison Square, and moregenerally what obligations (if any) are owed by Crown entities with properties in TeTauihu. The same issues are raised by the judicial review proceedings that have yet tobe heard.The High Court judgment[178] In the High Court, Collins J approached the case by posing two questions:175(a) Is it reasonably arguable that ACC properties may be applied to meetthe Crown's liability (if any) under Wakatū?(b) If so, is it reasonably arguable that Mr Stafford has a beneficial interestin Morrison Square?173 Senior Courts Act 2016, s 59.174 Stafford v Attorney-General [2018] NZCA 490 at [42].175 High Court judgment, above n 171, at [3]–[4].[179] The Judge considered that the answer to the first question was yes. Heconsidered that responsible Ministers had sufficient control over ACC by means oftheir powers of direction under ss 103 and 107 of the Crown Entities Act 2004 (CEA)to prevent ACC from selling Morrison Square.176 He noted that directions (bothformal and informal) in relation to the sale of land by Crown entities had been madein the past and ACC had treated them as lawful.177 There was therefore no reason suchdirections could not be made for the resolution of land disputes.178[180] But in relation to the second question, the Judge took the view that, althoughthe relevant Ministers could force ACC's hand if they chose to, Mr Stafford still didnot have an arguable beneficial interest in Morrison Square. Without a ministerialdirection, no equitable interest could be said to have vested in him.179 It was for thatreason that the Judge utilised the discretion in s 143(2) of the Land Transfer Act 1952(LTA 1952) to extend the life of the caveat for one further month even though heanswered the second question in the negative.180 He then invited the relevant Ministersto consider whether they should make the necessary direction.181[181] Finally, the Judge held that in light of the wider public interests at stake in thecase, it was not appropriate to make an award of costs against Mr Stafford.182Appeals[182] Mr Stafford's appeal challenges the High Court's conclusion that in theabsence of a direction from the Ministers, it was not arguable that Tauihu iwi held abeneficial interest in Morrison Square. His primary ground was that the Judge erredin treating the Crown and ACC as divisible insofar as the fiduciary obligations owedto Tauihu iwi are concerned. ACC is, it was argued, an "instrument of executivegovernment", described in the CEA as a Crown agent, and subject to governmentcontrol. It was therefore reasonably arguable that Tauihu iwi had a beneficial interestin Morrison Square.176 At [82].177 At [83].178 At [86].179 At [94].180 At [97].181 At [97].182 At [98].[183] ACC cross-appealed. The main grounds pleaded were that the High Court waswrong to find: 183(a) it was arguable that the relevant Ministers could give the necessarydirection under either s 103 or s 107 of the CEA in the circumstancesof this case;(b) it was arguable that such direction could comply with the restrictionscontained in s 113 CEA;(c) that the Court had a discretion under s 143 of the LTA 1952 totemporarily sustain a caveat that did not disclose an arguable estate orinterest in the land; and(d) that costs should lie where they fall in the context of a contest betweenprivate interests with no true public interest dimension.[184] The Attorney-General was granted leave in the High Court to intervene. Hepresented argument there and in this Court in support of ACC's application to removethe caveat.Submissions[185] ACC is no longer pursuing its costs cross-appeal. The parties have structuredtheir submissions around the following three issues:(a) Is it reasonably arguable that Morrison Square can be applied towardssettling Crown liabilities arising from the Wakatū proceeding?(b) Is it reasonably arguable that Mr Stafford has a beneficial interestsufficient to support the caveat?183 Grounds (a) and (b) are more in the nature of support for the High Court judgment on differentgrounds.(c) Does s 143 of the LTA 1952 confer a discretion to sustain a caveat inthe absence of a reasonably arguable case to support it?(a) Availability of Morrison Square to meet Crown liabilities[186] On this issue, Mr Stafford supported the High Court's determination in hisfavour. He submitted that the determination is consistent with authority, academiccommentary, the principles of the Treaty, the Cabinet Manual, and actual Crownpractice with respect to making land available for Treaty settlements where it is ownedby Crown entities. ACC can be treated as the Crown, and Morrison Square as Crownland, for the purpose of this proceeding because it satisfies the common law controltest.[187] ACC explained that its accounts are "hypothecated"; that is, available only fortheir respective statutory purposes and no other. There is no cross-subsidisationbetween the accounts. Further, ACC submitted the scheme is designed to beself-funding, which is why its operation is kept at arm's length from government. Itwould be a dangerous precedent to allow government to access ACC funds forpurposes unrelated to the scheme. This, it submitted, would impair its investments,decrease the value of its property, and force ACC to change its investment strategy.[188] ACC further submitted that a Wakatū direction cannot be made under eithers 103 or s 107. This it said is because there is no relevant government policy relatingto the land capable of supporting such a direction. And, in any case, Parliament cannothave intended to allow directions that would prevent ACC from carrying out itsstatutory function of managing assets. It also submitted that none of the s 107 purposesapply in this case. Finally, it submitted that s 113 bars any direction that would bringabout a particular result (cancellation of the sale) in respect of a particular person orpersons (customary owners).[189] Finally, ACC submitted that even if it met the control test for some purposes,this did not mean the Crown's liabilities could be merged with those of ACC,particularly in the context of a contest over interests in land. Section 15(b) of the CEAprovides that ACC is a separate legal entity from the Crown. They must thereforehave separate liabilities. That separation is fatal to Mr Stafford's claim becausewhatever the level of the Crown's control over ACC, equity will only fix obligationsin respect of the estates and interests owed by Crown. And ACC is not the Crown.[190] The Attorney-General also emphasised s 15 of the CEA. He argued that s 15meant the obligations of ACC are not the obligations of the Crown and vice versa; andso ACC cannot be liable for the obligations of the Crown. Further, he argued thatunder the Crown Proceedings Act 1950, private law claims against the Crown cannotbe pursued against a Crown entity. Allowing the enforcement of the Crown'sliabilities against ACC by way of caveat would undermine both the CEA and theTorrens system. Finally, the Attorney-General submitted that even if an entity can beconsidered an instrument of the Crown for some purposes, there is no authority thatsuch treatment means the Crown's obligations become that of the entity. ACC is abona fide purchaser for value without notice of the Crown's obligations, and that isthe end of the enquiry.(b) Beneficial interest sufficient to support the caveat[191] This is the issue on which the High Court ruled against Mr Stafford.Mr Stafford submitted that the Judge erred in finding that the lack of a ministerialdirection meant that Mr Stafford had no beneficial interest in the land.[192] Mr Stafford submitted that the Judge set the standard for sustaining a caveattoo high. Rather, the standard is a low one: the caveat should be sustained unless it is"patently unmaintainable".[193] Mr Stafford submitted that his claim to a proprietary interest was not "patentlyunmaintainable". The Crown has sufficient control because it has directive powers;the fact that they have not been exercised is irrelevant. The proprietary interest ariseshere because the land is Crown land located within the Spain award area. Any suchland, it was submitted, is subject to the equitable interests of the customary ownersbecause, as trustee, the Crown cannot reacquire specific land (or indeed acquire anyland) within the award area free from its fiduciary obligations under the award.[194] Finally, Mr Stafford submitted that the Judge erred in holding Mr Stafford'sposition is no better than that of a discretionary beneficiary; rather, it was submittedthat a discretionary beneficiary's rights may vary depending on the context, the overallprinciple being to recognise a proprietary interest where it would be fair, just andreasonable to do so.[195] Relying on its position on the first issue, ACC submitted that Mr Stafford hasno interest derived from ACC as required by s 137(2)(c) of the LTA 1952 because ACCis not the Crown, nor does he have any interest in Morrison Square since it is notCrown land.[196] The Attorney-General went further and argued that there is no basis for Crownliability in respect of Morrison Square in any case. This, he submitted, is becauseSection 443, the part of Morrison Square that was within the Tenths reserves, was infact reserved before being transferred to the Public Trustee in 1882. There is thereforeno basis on which to argue that the Crown breached any duty in respect of that parcelof land. And as for the other titles in Morrison Square, they were never intended to bereserved for Tauihu iwi, so there cannot be any Crown obligation in respect of thatland either.(c) Discretion to sustain a caveat[197] Mr Stafford and ACC agree that this issue is now moot given the Judge's grantof stay pending the outcome of this appeal. However, ACC submitted that it raises animportant question of public interest, and that there is no discretion under s 143 of theLTA 1952 to sustain a caveat where there is no reasonably arguable case for it. It alsosubmitted in the alternative that if there were such a discretion, it should only beexercised where the interests of the registered proprietor will not be prejudiced as aresult.IssuesCaveats and the appropriate standard[198] As a preliminary comment, it is important to remember that this is a caveatcase. That affects my articulation of the issues I consider require resolution. Thecaveat's function is to prevent dealings in the land that may be inconsistent with theinterest claimed, and to give notice of the claim to the registered proprietor and thosewho may search the title.184 Once the registered proprietor makes an application forremoval under s 143 of the LTA 1952, the caveator must convince the High Court thatthey have a reasonably arguable basis for the interest claimed.185 But s 143 providesfor a summary process. The courts will not make final determinations of right in aremoval application unless the caveator's case for an interest in the land is plainlyuntenable.[199] In summary proceedings, where material facts are in dispute or the meaning ofa material agreement or instrument requires a proper understanding of the factualmatrix, the courts generally refrain from coming to any final view of the trueconstruction. On the other hand, where arguability raises a question of law only, thecourts will often be prepared to settle the dispute there and then, especially where theanswer is clear. But this will not always be so. As Elias CJ and Anderson J noted inthe somewhat analogous circumstances of the strikeout application in Couch vAttorney-General, when exercising the court's pre-emptive jurisdiction on a purequestion of law, "[p]articular care is required in areas where the law is confused ordeveloping".186[200] I am of the view that the law in relation to what instrumentalities are to beconsidered the Crown for the purpose of allocating the burden of the Crown's fiduciaryobligations is, if not confused, at least unclear, and certainly developing. Particularcare is therefore required before leaping to any final conclusions at this stage.Six questions[201] Whether Mr Stafford has a caveatable interest in Morrison Square comes downto whether it is reasonably arguable that ACC is the Crown, or sufficiently Crown-like,to be burdened by the fiduciary obligation found to exist in the Wakatū decision. TheHigh Court Judge divided that overarching question into two issues as I have noted:first whether ACC land is available to meet the Crown's obligation, and secondwhether Mr Stafford has a beneficial interest in Morrison Square. The parties also184 See Land Transfer Act 1952, ss 141–142.185 Sims v Lowe [1988] 1 NZLR 656 (CA) at 659–660.186 Couch v Attorney-General [2008] NZSC 45, [2008] 3 NZLR 725 at [33].structured their submissions in that way. For my part, I have found it more useful tosplit the first issue into three, and then to pose the second of Collins J's issues slightlydifferently. My first three issues are preliminary to what then becomes the fourth, butthey are nonetheless important because they focus on how much actual controlrelevant Ministers have over ACC. The fourth issue is the key, but the answer to thatdepends significantly, though not entirely, on the previous three answers. There is thenthe additional issue raised in the Attorney-General's argument; that is, assuming ACCstands in the Crown's shoes, whether it is arguable on the facts that the Crown owesthe obligation contended for. This is the fifth issue.[202] I will deal with the moot issue of discretion under s 143 last. This is the sixthissue.[203] Purely for economy of expression, I refer to a ministerial direction under theCEA that ACC refrain from selling Morrison Square as a Wakatū direction.[204] The issues are therefore as follows:(a) Is it reasonably arguable that the Minister can make a Wakatū directionto ACC under s 103 of the CEA?(b) Is it reasonably arguable that the Minister can make a Wakatū directionto ACC under s 107 of the CEA?(c) Is it reasonably arguable that s 113 of the CEA does not bar a Wakatūdirection?(d) Is it reasonably arguable that ACC is the Crown or fixed with theCrown's fiduciary obligation for the purposes of the caveat?(e) Is it reasonably arguable that the Crown owes a fiduciary obligation inrelation to Morrison Square?(f) Should the Court deal with a moot question in this case, and if so, isthere a discretion under s 143 of the LTA 1952 to sustain a caveat whereno reasonably arguable case was found?[205] Issues (a)–(c) overlap with Mr Stafford's judicial review proceedings currentlybefore the High Court.187 This is unfortunate but unavoidable in light of the view Itake in relation to the applicability of the common law control test.188 I stress,however, that such conclusions as I am required to reach by the issues arising in thiscase are tentative only for the purpose of the arguability test for caveats.[206] Before turning to address the issues, I will begin with an overview of keyaspects of the relevant legislation: the Accident Compensation Act 2001 (AC Act) andits predecessors, and the CEA. I will set out in summary form the statutoryrelationship between relevant Ministers and ACC, with a particular focus on the degreeof ministerial control and ACC accountability. This context will assist inunderstanding the discussion under each of the issues further below.The accident compensation scheme[207] The legislative purpose for New Zealand's accident compensation scheme hasgone through a number of iterations since the enactment of the first AccidentCompensation Act in 1972. All iterations, however, have reflected three corepurposes: the prevention of accidental injury, the provision of rehabilitative treatmentfor injuries when they happen, and the provision of fair compensation for the injured.[208] The current purpose of the AC Act is provided in s 3:3 PurposeThe purpose of this Act is to enhance the public good and reinforcethe social contract represented by the first accident compensationscheme by providing for a fair and sustainable scheme for managingpersonal injury that has, as its overriding goals, minimising both theoverall incidence of injury in the community, and the impact of injuryon the community (including economic, social, and personal costs),through—187 See above at [176].188 I discuss this below at [299]–[307] and [329]–[367].(a) establishing as a primary function of the Corporation thepromotion of measures to reduce the incidence and severityof personal injury:(b) providing for a framework for the collection, co-ordination,and analysis of injury-related information:(c) ensuring that, where injuries occur, the Corporation'sprimary focus should be on rehabilitation with the goal ofachieving an appropriate quality of life through theprovision of entitlements that restores to the maximumpracticable extent a claimant's health, independence, andparticipation:(d) ensuring that, during their rehabilitation, claimants receivefair compensation for loss from injury, including fairdetermination of weekly compensation and, whereappropriate, lump sums for permanent impairment:(e) ensuring positive claimant interactions with the Corporationthrough the development and operation of a Code of ACCClaimants' Rights:(f) ensuring that persons who suffered personal injuries beforethe commencement of this Act continue to receiveentitlements where appropriate.The Accident Compensation Corporation[209] ACC is the primary entity tasked with giving effect to these purposes.[210] When ACC was first established in 1972, it was described as a"commission".189 Its board consisted of members appointed by the Governor-Generalon the recommendation of the responsible Minister.190 In 1980 ACC was expresslydeclared to be a corporation sole by the terms of s 2(1) of the Accident CompensationAmendment Act 1980, and renamed accordingly.191 By 1992, board members wereappointed directly by the responsible Minister.192 The current AC Act continues toprovide for ministerial board appointments.193[211] The broad functions of ACC are set out in s 262(1) of the AC Act as follows:262 Functions of Corporation189 Accident Compensation Act 1972, s 6(1).190 Section 6(2).191 This remained the position until the enactment of the Crown Entities Act 2004 (CEA).192 Accident Rehabilitation and Compensation Insurance Act 1992, s 157(1)(a).193 Accident Compensation Act 2001 (AC Act), s 267(1). See also CEA, s 28(1)(a).(1) The functions of the Corporation are to—(a) carry out the duties referred to in section 165; and(b) promote measures to reduce the incidence and severity ofpersonal injury in accordance with section 263; and(c) manage assets, liabilities, and risks in relation to theAccounts, including risk management by means ofreinsurance or other means; and(d) carry out such other functions as are conferred on it by thisAct, or are ancillary to and consistent with those functions.[212] The s 165 duties referred to in s 262(1)(a) relate to:(a) determining injury cover and other entitlements in individual cases, andadministering the statutory dispute resolution process in respect thosedeterminations;194(b) managing its statutory accounts;195 and(c) collecting levies.196[213] A central feature of the scheme is its system of separate accounts. There arefive accounts: the Work Account,197 Motor Vehicle Account,198 Earners' Account,199Non-Earners' Account,200 and Treatment Injury Account.201 For the most part, eachaccount is funded by levies such that those who derive the primary benefit from thecategory of activities reflected in the account pay for the cover. Motorists pay inrespect of motor vehicle accidents,202 health professionals and patients in respect of194 AC Act, s 165(1)(a), (b) and (e).195 Section 165(1)(c).196 Section 165(1)(d).197 Section 167.198 Section 213.199 Section 218.200 Section 227.201 Section 228.202 Sections 216–217.medical misadventure,203 employers and workers in respect of work-related injuries,204and all income-earners of any kind in relation to non-work-related injuries.205[214] ACC allocates levies to the required account and invests any surplus to enableit to meet the needs of present-day clients who require ongoing support. In this sense,the scheme is a kind of mutual assurance scheme.206 But that is not the entire picture.[215] There is one account that is not funded by levies. That is the Non-Earners'Account. For obvious reasons, that account is funded entirely by the Crown throughappropriations from Parliament.207 Like the levy-funded accounts, the Non-Earners'Account is also designed to operate in surplus. That is, Crown appropriations shouldexceed the present needs of non-earning claimants. The surplus is then invested toprovide for their future needs. Such investments also generate income.[216] As s 275(2) implies, ACC's investments are not siloed as are the five statutoryaccounts. Rather, they are merged into a single comprehensive portfolio. To the extentthat investments are separately managed, this appears to be based on asset class, notfunding source. These classes include, for example, cash, bonds, equities and"Unlisted Property, Infrastructure and Private Equity".208 Morrison Square belongs tothe last-mentioned category. Investment income must then be apportioned to thevarious accounts in accordance with their contribution.209[217] According to the evidence, 9.4 per cent of ACC's $38.9 billion investmentportfolio was attributed to the Non-Earners' Account as at 31 December 2017. The2017 Annual Report indicated that the average for the prior three years was 11.1 percent.210 The three-year average for the 2016–2019 period was 10.7 per cent, while13.8 per cent of the investment portfolio was attributed to the Non-Earners' Account203 Section 228(2). While the Act provides for specific levies in relation to the Treatment InjuryAccount, we were advised in submissions that no levy has been struck with respect to that account.204 Sections 167(2) and 168–168B.205 Sections 221–222.206 Section 166A(1).207 Section 227(2).208 Annual Report/Pūrongo-a-tau 2019 (Accident Compensation Corporation, ACC8053, September2019) at 82.209 AC Act, s 275(2).210 Annual Report 2017 (Accident Compensation Corporation, ACC7811, September 2017) at 64.for the 2018/19 financial year.211 The "Crown share" of investments is therefore notstatic. Meanwhile, Parliamentary appropriations made up approximately 20 per centof ACC's overall revenue for the 2016/17 financial year, and if income frominvestments on Crown funds provided prior to 2017 is added, the proportion grows toapproximately 24 per cent.212 On any analysis, the Crown contribution to ACC'sinvestments is significant.[218] In some aspects of its work, ACC exercises carefully prescribed statutorydiscretions — for example, in individual claim and entitlement determinations213 andin the management of its various accounts.214 In other areas, its discretion is verybroad — for example, in the measures it chooses to promote for the prevention ofpersonal injury,215 and, subject to s 275, any investment strategy it chooses to adoptwith respect to funds it receives into its accounts that are not immediately required tomeet current entitlements under the AC Act.216The extent of ministerial control[219] Prior to the enactment of the CEA and in earlier versions of the accidentcompensation scheme, ACC had its own detailed provisions for ministerial oversight.[220] The Minister of Finance was required to approve any bank in which ACCopened an account or made a deposit, and all individual borrowing.217 By 1992,ministerial banking controls were reduced to approval of borrowing proceduresonly.218 This is the current position under s 276(1) of the AC Act.[221] By an amendment to the scheme in 1996, ACC was required to enter into anannual binding "service agreement" with the responsible Minister in relation to desired211 Annual Report/Pūrongo-a-tau 2019, above n 208, at 82.212 Based on figures from Annual Report 2017, above n 210, at 94 and 100.213 See AC Act, pts 2–4.214 See s 274. ACC may not use an account to meet the needs of a claimant for whom the accountwas not established: s 274(2). Administration costs must also be fairly apportioned among theaccounts: s 274(4).215 Section 263(1).216 Section 275(1) requires ACC to invest account funds "as if it were a trustee" and subject to anyministerial "policy direction" under s 103 of the CEA.217 Accident Compensation Act 1982, s 9(3)(b), (4) and (6).218 Accident Rehabilitation and Compensation Insurance Act 1992, sch 2 cl 17.outcomes and objectives for the performance of its functions, duties and powers,including the performance of each of its accounts.219 This requirement remains in amore detailed form in s 271 of the AC Act.[222] Further, from 1998 ACC was required to prepare a statement of intent whichcomplied with the Public Finance Act 1989.220 It was to set out information relating(among other things) to the allocation of returns generated by subsidiaries,assumptions in assessing the cost of its capital, forecasts of revenue and expenditure,their allocation among the accounts, and the management of those accounts.221 Inaddition, the Minister of Finance could, by written notice, require ACC to providefinancial forecasts or other information in relation to its expectations of Crownfunding.222 These specific requirements have since been replaced by broader reportingobligations: ACC must prepare a statement of intent under s 272(1) of the AC Act, inaccordance with the obligations set out in pt 4 of the CEA.223[223] Section 166B was added to the AC Act in 2015 to provide for greater financialresponsibility and transparency.224 It requires the Minister for ACC to issue a fundingpolicy statement, the terms of which must guide ACC in administering the statutoryaccounts in a manner that achieves long-term sustainability.225 The statement wasissued in 2016 and contains high-level principles and objectives for the administrationof ACC's accounts and levies. It does not appear to contain any constraints that wouldbe inconsistent with a Wakatū direction.Government policy directions[224] Finally, each iteration of the scheme has included provision by which theresponsible Minster may direct ACC to comply with government policy.Section 20(1) of the Accident Compensation Act 1972 required ACC to "give effect tothe policy of the Government" in the exercise of its functions and powers where so219 Section 159AA(4)(a)–(b).220 Accident Insurance Act 1998, s 341(1).221 Section 341(2)(d)–(g).222 Section 342. Presumably, such notice could cover expected Crown contributions to theNon-Earners' Account.223 See CEA, ss 138–149A.224 Accident Compensation (Financial Responsibility and Transparency) Amendment Act 2015, s 5.225 AC Act, s 166B(2)–(3).communicated in writing by the Minister. Although the procedures for making such adirection became more formal over time, the substance of the original direction powerremained in every iteration of the relevant legislation until the enactment of theCEA.226 This was so despite the addition of ministerial strategic control throughstatements of intent and service agreements, which I have discussed above.Crown Entities Act 2004 reform[225] The last quarter of the 20th century saw a proliferation of statutory agenciescarrying out functions mandated by government. The CEA enacted in 2004 was aresponse to this proliferation. Its purpose is concisely set out in s 3 as follows: to reform the law relating to Crown entities to provide a consistentframework for the establishment, governance, and operation of Crown entitiesand to clarify accountability relationships between Crown entities, their boardmembers, their responsible Ministers on behalf of the Crown, and the Houseof Representatives [226] The CEA established a tiered system of classification of statutory agencies,each with different levels of accountability and control. "Crown entity" is the broadestclassification. It comprises five "categories" of entities, one of which is the "statutoryentity" (s 7(1)). Statutory entities are then split into three different "types" (s 7(1)(a)).ACC falls into one of these types of statutory entity.Crown entity-wide accountability and control[227] Crown entities are separate legal entities. According to the Cabinet Manual,the allocation of government activities or functions to such entities indicates anintention that the function should be carried out at "arm's length" from thegovernment.227 They nonetheless remain "instruments of the Crown".228226 See Accident Compensation Act 1982, s 10(1); Accident Rehabilitation and CompensationInsurance Act 1992, s 159(1); Accident Insurance Act 1998, s 339(1); and AC Act, s 270(1) (asenacted).227 Cabinet Office Cabinet Manual 2017 at [3.35].228 At [3.35]. See also State Sector Act 1988, s 2 definition of "State services", para (a)–(b). Tertiaryinstitutions are not considered instruments of the Crown: State Sector Act, s 2 definition of "Stateservices", para (c)(vi).[228] The CEA reform removed most (but not all) control and accountabilitymechanisms from the parent statutes of Crown entities, and consolidated andrationalised them into a single comprehensive regime.[229] The CEA provides five main control and accountability mechanisms in respectof all Crown entities. First, Crown entities must prepare for the responsible Ministera statement of intent at least once every three years.229 A statement of intent must setout (among other things) the strategic intentions of the entity.230 The responsibleMinister may comment on the draft and, if necessary, direct the entity to amend thoseintentions.231[230] Second, Crown entities must prepare an annual statement of performanceexpectations to (among other things) enable the responsible Minister to participate insetting such expectations.232 The focus of these statements is on the goods and servicesthe entity expects to provide in accordance with its statutory mandate.233 The Ministermay comment on any draft and may direct amendments to the statement except inrespect of forecast financial statements.234[231] Third, Crown entities must provide their financial reports and other financialinformation to the Auditor-General for audit, and prepare annual reports.235 Annualreports must be provided to the responsible Minister within 15 working days of receiptof the Auditor-General's report.236 That said, and unlike earlier approaches such asthat applied to ACC when first created, Crown entities have a general discretion withrespect to bank accounts, subject to conditions of varying stringency depending on thenature of the bank.237229 CEA, s 139(3).230 Section 141(1).231 Sections 145(c) 147(1). The Minister may also amend any explanation of the nature and scope ofthe entity's functions and intended operations to meet its strategic intentions: ss 147(1) and141(2)(a)232 Sections 149C(1) and 149B(a).233 Section 149E. See also s 136(1) definition of "outputs".234 Sections 149I(2)(b) and 149J(1).235 Sections 156(1)(a) and 150(1)(a). The annual report includes a statement of performance,statement of responsibility, and annual financial statements: ss 153–155.236 Section 150(1)(b).237 Section 158(1)–(5).[232] Fourth, s 132(1) provides the responsible Minister with a general power toreview the operations and performance of a Crown entity "at any time".[233] Finally, s 107 provides for "whole of government approach" directions to allor any Crown entities. As the name indicates, such directions are to be aimed atmatters affecting the whole or a significant part of the Crown entity sector. They maybe driven by the achievement of economies of scale or efficiencies, for example.238Such directions will be binding on the Crown entities directed.239[234] There is one further relevant accountability mechanism. Section 131 of theCEA provided for Crown entities to be subject to the Ombudsmen Act 1975 and theOfficial Information Act 1982.240Accountability and control of statutory entities[235] The CEA identifies five categories of Crown entity:241(a) statutory entities;(b) Crown entity companies;(c) Crown entity subsidiaries;(d) school boards of trustees; and(e) tertiary education institutions.[236] ACC is a statutory entity.242 In addition to the general pt 4 controls justdiscussed, ACC is therefore also subject to the provisions of pt 2 subpt 1 in respect ofstatutory entities. The subpart begins with important statements about the status of238 Section 107(1)(b).239 Sections 110(1) and 114(1)(b).240 This is provided for by amendment to sch 1 pt 2 of the Ombudsmen Act 1975. See also OfficialInformation Act 1982, s 2(1) definition of "organisation".241 Section 7(1).242 Schedule 1.statutory entities. They are bodies corporate, separate from the Crown.243 They maydo anything authorised by the CEA or parent Act, and anything able to be done by anatural person of full age and capacity, provided it is for the purpose of performing itsfunctions.244[237] It is the task of the responsible Minister to "oversee and manage the Crown'sinterests in, and relationship with, [their] statutory entity", including in relation to thegeneral pt 4 controls.245 They must also manage the appointment and removal ofmembers,246 as well as their remuneration.247 Members, in turn, are accountable totheir responsible Minister in the performance of their duties.248Control of Crown agents[238] There are then three types of statutory entities:(a) Crown agents, which "must give effect to government policy whendirected by the responsible Minster";249(b) autonomous Crown entities, which "must have regard to governmentpolicy when directed by the responsible Minister";250 and(c) independent Crown entities, which "are generally independent ofgovernment policy".251[239] ACC is a Crown agent.252 It must therefore give effect to government policywhenever directed to do so. This requirement is provided by a combination of s 103,which entitles the Minister to direct ACC to give effect to government policy inrelation to its functions and objectives; and s 114(1)(a), which requires ACC to243 Section 15(a)–(b).244 Sections 16–18.245 Section 27(1).246 Sections 28 and 36–41.247 Section 47.248 Section 26(2).249 Section 7(1)(a).250 Section 7(1)(a).251 Section 7(1)(a).252 Schedule 1 pt 1.comply. This subjection to Crown policy is the key characteristic of Crown agents asdistinct from other statutory entities.[240] There is, however, one other important difference. It relates to the carefullycalibrated provisions for removal of members in each category of Crown entity. Bythe terms of s 36(1), the responsible Minister may remove unelected members ofCrown agents "at any time and entirely at his or her discretion". By contrast, unelectedmembers of autonomous Crown entities may only be removed for a reason that in theMinister's opinion justifies removal.253 Elected members of Crown agents andautonomous Crown entities may only be removed by the responsible Minister for "justcause" — an objective standard.254 Members of independent Crown entities, whetherelected or not, may only be removed for just cause by the Governor-General, on adviceof the responsible Minister given after consultation with the Attorney-General.255[241] It was no doubt the foregoing factors that caused Collins J in EarthquakeCommission v Krieger to describe the Earthquake Commission, also a Crown agent,as "an integral part of New Zealand's central government" even though it is not agovernment department.256Preliminary conclusions[242] Before turning to consider the issues, it is useful to identify three relevantthemes in the history of ACC and the Crown entity reform insofar as accountabilityand control are concerned.[243] First, since 1980, ACC has been a separate legal entity distinct from "theCrown". That is no doubt why s 49 of the Public Finance Act provides that the Crownis not liable for the debts of ACC, although it should be noted that this exclusion doesnot apply to any sum the Crown must pay to a creditor of a Crown entity by virtue ofa cause of action the creditor has against the Crown.257 A related point is that the levelof Crown funding to ACC is proportionately less than revenue received directly from253 Section 37(1).254 Section 38(1). See also s 40.255 Section 39(1).256 Earthquake Commission v Krieger [2013] NZHC 3140, [2014] 2 NZLR 547 at [67].257 Public Finance Act 1989, s 49(2)(c).levies or indirectly by way of income from investment of surplus levy funds. But theCrown contribution is nonetheless significant.[244] Second, while ACC was subject to relatively detailed control of day-to-dayoperations at the outset, these controls had been relaxed by 1992, though not removedentirely — borrowing procedures were still subject to ministerial approval and remainso under the CEA. From 1992, the primary foci of control and accountability shiftedto ministerial oversight of strategic and business planning. Statutory levers availableto the responsible Minister include mandatory consultation processes and, if required,direct ministerial control of the terms of relevant planning statements. Thus theflavour of the general formal controls is strategic rather than operational, but, at thatlevel, reasonably comprehensive.[245] Meanwhile, relevant Ministers can control detailed service provision by meansof service agreements with ACC under the AC Act. ACC's decision-making in respectof individual claims remains truly independent and subject only to judicialoversight.258 In practical terms, Ministers also convey their high-level priorities toCrown entities by way of the informal provision of annual Letters of Expectations. Aswith much of the day-to-day business and practice of ministerial control and influenceover the public sector, there is no statutory basis for this procedure.[246] Third, there are two areas in which Ministers have had more direct control ofACC from the beginning: first in relation to the appointment, removal andremuneration of board members; and second in the subjection of ACC to governmentpolicy by ministerial direction. These levers remain in place today. The mostimportant is the second. The fact that such power was expressly provided for in ACC'slegislation prior to the Crown entities reform is probably the reason ACC was made aCrown agent under the CEA.259 Crown agency status makes ACC subject to s 103258 I address below at [280]–[298] the limitations on ministerial reach prescribed by s 113 of the CEA.259 Other examples of Crown agents whose parent Acts also contained express ministerial directionprovisions prior to 2004 include:(a) The Earthquake Commission. Section 12 of the Earthquake Commission Act 1993 (asenacted) relevantly provided:12 Directions by Ministerministerial directions. No other category of Crown entity is subject to this level ofdirect rather than strategic control. This combination of comprehensive strategicministerial oversight, direct control of appointments and the power to direct ongovernment policy is very important in the context of this case.Issue 1: Is it reasonably arguable that the Minister can make a Wakatū directionto ACC under s 103 of the CEA?[247] Section 103 of the CEA provides as follows:103 Power to direct Crown agents to give effect to government policy(1) The responsible Minister of a Crown agent may direct the entity togive effect to a government policy that relates to the entity's functionsand objectives.(2) Sections 114 and 115 apply to the direction.(3) This section is subject to section 113.(Emphasis added)[248] Section 114 makes any such direction binding on Crown agents, including, inthe present case, ACC. Section 115 provides the procedure for directions.The Minister must first consult with ACC and, once given, the direction must be(1) The Minister may from time to time (after consulting, where practicable, thosepersons likely to be affected by the direction) give to the Commission inwriting such directions as the Minister thinks fit as to the policy to be followedby the Commission in the exercise of its functions or powers.(2) The Commission, in the exercise of its functions and powers, shall give effectto any written directions given to it by the Minister under subsection (1) of thissection.(b) The Energy Efficiency and Conservation Authority. Section 23(1) of the Energy Efficiencyand Conservation Act 2000 (as enacted) provided:23 Authority to comply with Government policy and Minister's directions(1) In the performance and exercise of its functions, duties, and powers, theAuthority must—(a) give effect to the policy of the Government as it affects the functionsof the Authority; and(b) comply with any directions relating to the policy of the Governmentthat are given by the Minister to the Authority in writing.(c) Fire and Emergency New Zealand, previously the New Zealand Fire and ServiceCommission. Section 13 of the now repealed Fire Service Act 1975 provided:13 Directions by MinisterThe Commission shall comply with all directions given by the Minister in writingwith respect to the policy of the Government in connection with this Act.published in the Gazette and tabled in the House.260 The heading to s 113 describesits purpose as "[s]afeguarding [the] independence of Crown entities". I address itseffect below under Issue 3.[249] ACC argued that while it is subject to s 103, a Wakatū direction would beunlawful. Whether that is so depends on whether such a direction would "relate to"ACC's functions and objectives.[250] The AC Act does not provide objectives for ACC. Instead, as I have notedabove at [208], it provides for an overall statutory purpose, which is broadly toreinforce the social contract that underpins the accident compensation scheme byensuring that it is fair to injured New Zealanders and sustainable in the long term.[251] Rather than objectives, ACC has core statutory functions. These include (asrelevant):(a) managing the accounts that fund entitlements;261 and(b) managing assets, liabilities and risks in relation to the accounts.262[252] It is fair to infer that ACC must carry out these functions so as to further thestatutory objective. Simply put, ACC's objective must be to run a fair accidentcompensation scheme that has long-term financial sustainability. In support of thatobjective, one of its functions is to invest its surplus resources, whether funded bylevies or government contributions.[253] A Wakatū direction, if given under s 103, must "relate to" that objective andthat function. But "relates to" is an imprecise phrase. It could mean either:(a) only for the purpose of achieving the objective or function; or260 CEA, s 115(1)–(2).261 AC Act, s 165(1)(c).262 Section 262(1)(c).(b) merely affecting the objective or function in some way, irrespective ofpurpose and effect.[254] For example, if my objective is to travel to Auckland for work, a direction frommy employer that I obtain an airline ticket to Auckland is plainly a direction whosepurpose is to achieve my objective (meaning (a) above). On the other hand, a directionfrom my employer that I must stay in Wellington is not for the purpose of achievingmy objective; in fact, its purpose is to defeat it. But in a broader sense, that directionstill "relates to" my objective (meaning (b) above). These examples represent oppositeends of the possible spectrum of meaning.[255] There is, then, a third category that sits between these extremes. Somedirections might be for another purpose entirely, yet still be consistent with achievingthe mandated objective (meaning (c)). If my employer directed me to pick up acolleague in Taupō en route to Auckland, that direction would not be for the purposeof getting to Auckland, but might still be consistent with it. It would merely affect myroute, my mode of transport, and the time my trip will take.[256] Applying that framework to ACC and s 103, a direction in a time of marketvolatility that ACC may invest only in Treasury bills, government bonds and AA-ratedbank securities263 can readily be seen to further ACC's objective of long-term financialsustainability through its investment function (meaning (a) above). Such directionsare obviously contemplated by s 103.[257] On the other hand, a direction that ACC not invest its surplus funds at all wouldaffect the long-term financial sustainability objective but also clearly be inconsistentwith it (meaning (b) above). Such directions are probably not contemplated by s 103because they would cut across one of the AC Act's, and ACC's, core objectives.Without express language, Parliament probably should not be taken to have intendedto vest in the responsible Minister a power to override the statute.[258] A direction that, in order to meet New Zealand's emissions targets, ACC maynot invest in fossil fuels, lies somewhere in the middle. Such direction is clearly not263 See, for example, below n 270.aimed at maintaining the accident compensation scheme's long-term financialsustainability. Its purpose is to promote environmental sustainability and meetNew Zealand's international commitments. But pursuing that need not necessarilydefeat ACC's objectives. Long-term financial sustainability may still be achievedwithout recourse to investment in fossil fuels. A direction along the lines indicatedwould therefore affect ACC's functions and objectives despite its quite separatepurpose. But crucially, it would not be inconsistent with the objects of the AC Act(meaning (c) above).[259] It must be remembered that s 103 is not a new power. It is a consolidation andreplacement of the ministerial direction provisions that were contained in the parentActs of many statutory entities that are now Crown agents under the CEA. Not allthose provisions used the connecting phrase "relates to", but they were uniformly castin very broad terms.264[260] For example, the Earthquake Commission Act 1993 enabled the responsibleMinister to direct the Earthquake Commission as he or she "thinks fit in the exerciseof [the Commission's] functions or powers".265 The Energy Efficiency andConservation Act 2000 empowered the responsible Minister to direct the EnergyEfficiency and Conservation Authority on policy "as it affects" the Authority'sfunctions.266 And the (now repealed) Fire Service Act 1975 enabled the responsibleMinister to direct the New Zealand Fire Service Commission (now Fire andEmergency New Zealand) on government policy "in connection with" that Act.267[261] None of these provisions contained reference to the furtherance of objectivesor purposes either of the parent Act or the entity. There is in my view no good reasonto read those words in. This historically broad approach to the relevant statutorylanguage must have been intentional in each case, including in the case of ACC.Section 103 should not be read as changing that.264 Section 270 of the AC Act (as enacted) did use the phrase "relates to" and may have been themodel for s 103 of the CEA.265 Earthquake Commission Act 1993, 12(1) (emphasis added).266 Energy Efficiency and Conservation Act 2000, s 23(1)(a) (emphasis added).267 Fire Service Act 1975, s 13 (emphasis added).[262] The issue is not whether the direction is aimed at achieving ACC's objectives,but rather whether the effect of the direction is inconsistent with them. The phrase"relates to" may (at least arguably) thus be read to mean "affecting but not inconsistentwith".[263] So, the fact that a Wakatū direction is clearly not aimed at achieving ACC'sobjectives does not necessarily settle whether it is permitted under s 103. That dependson the terms of the direction and whether its effect would be contrary to ACC'sobjectives. For example, a direction that ACC refrain from selling Morrison Squareuntil the Wakatū proceeding is resolved is not necessarily inconsistent with thescheme's long-term sustainability. It is, after all, an investment asset and it is earningincome. Such a direction will not change that even though it limits ACC's investmentchoices. But a direction that ACC must transfer Morrison Square to Tauihu iwi at nocost would probably be inconsistent with long-term financial sustainability for obviousreasons. I come back to that scenario under Issue 4 at [368]–[370] below.[264] It must be at least arguable, therefore, that such directions are permitted by thebroad language of s 103.[265] If the foregoing is the generally appropriate approach to the construction ofs 103, does the fact that the AC Act provides for separate accounts, based on theidentity of the funder, make a difference? The ACC argument was essentially that thisseparation is structurally important to the scheme, and by implication precludesMinisters from interfering in decisions relating to non-Crown-funded accounts.[266] There are a number of reasons why that argument is flawed. I need onlyaddress two of them here.268 First, ACC's annual report treats its investment portfolioas merged. Every investment asset, including, I must assume, Morrison Square, ispartially Crown-funded. Although ACC is right that its primary accounts arehypothecated, its investment portfolio is not. I did not understand ACC to argue anydifferently.268 The remaining reasons I deal with further below at [347]–[360].[267] Second, and more importantly, s 275(1) of the AC Act makes it clear thatinvestment decisions are subject to CEA s 103 directions. This can only mean that theMinister has the power to direct ACC about its investments. It is true that the provisionalso refers to ACC's duty to invest as if it were a trustee, but that duty too is expresslysubject to any policy direction under s 103. It cannot be the case that s 103 may beused only for high-level strategic directions in relation to ACC's investments.Strategic direction is already covered by the Minister's powers of control through theCEA's statement of intent and performance expectations procedures. And the Ministeris entitled to review ACC's "operations and performance" at any time.269 Section 103must, therefore, also permit operational-level directions.270[268] I conclude, therefore, that it is reasonably arguable that the Minister can makea Wakatū direction to ACC under s 103 of the CEA. Whether any particular directionis ultimately lawful will depend on its actual terms.Issue 2: Is it reasonably arguable that the Minister can make a Wakatū directionto ACC under s 107 of the CEA?[269] Section 107 of the CEA provides as follows:107 Directions to support whole of government approach(1) The Minister of State Services and the Minister of Finance may jointlydirect Crown entities to support a whole of government approach bycomplying with specified requirements for any of the followingpurposes:(a) to improve (directly or indirectly) public services:(b) to secure economies or efficiencies:(c) to develop expertise and capability:269 CEA, s 132(1).270 An example of the level of detail contained in actual s 103 directions is the 27 July 2015 directionby the Minister responsible for the Earthquake Commission (EQC), purporting to control EQC'sportfolio composition and expected average annual rate of return. It directed that EQC'sinvestments must comprise any or all of the New Zealand Government and bank securities listedin the direction. Funds invested in bank securities were to be held across a number of banks. Italso required the Minister to be notified whenever fund assets fell below a set sum or EQC wishedto liquidate any part of its investment portfolio to meet expected claims above a set level.Consultation was also required if EQC proposed to cover pre-disaster currency exposure by wayof a hedging strategy. See "Direction by the Minister Responsible for the Earthquake Commissionto the Earthquake Commission Pursuant to Section 103 of the Crown Entities Act 2004 – NaturalDisaster Fund Investment Policies" (6 August 2015) New Zealand Gazette No 2015-go4515.(d) to ensure business continuity:(e) to manage risks to the Government's financial position.ExampleA direction may be given requiring that all Crown entities complywith e-government requirements to improve public services.(2) The direction may be given only—(a) to 1 or more categories of Crown entities (for example, to allstatutory entities, all Crown entity companies, or all schoolboards of trustees); or(b) to 1 or more types of statutory entity (for example, to allCrown agents); or(c) to a group of Crown entities (whether made up of categoriesor types) if—(i) the group is made up of at least 3 Crown entities; and(ii) the entities in the group have in common at least 1significant characteristic that relates to the direction(for example, the characteristic could relate to theCrown entities' asset holdings or presence in aregion).(2A) For the purposes of subsection (2)(a) and (c), companies named inSchedule 4A of the Public Finance Act 1989 may be treated as acategory of Crown entities.(3) No direction may be given under this section to Crown entitysubsidiaries.[270] Section 107 is new in the sense that there existed no Crown entity sector-widedirection power before the CEA.271 Consistent with its whole-of-government purpose,subs (2)(c)(i) prevents a s 107 direction from being made to fewer than three Crownentities at a time. A direction can be made, however, to three or more Crown entitiesthat share a particular characteristic.272 Examples provided in the section are commonforms of asset holdings, or presence in a region.273 Thus a direction relating to allCrown entities in Te Tauihu would be permitted, all other issues aside.271 Public Finance (State Sector Management) Bill 2003 (99-1) (explanatory note) at 36.272 Section 107(2)(c).273 Section 107(2)(c)(ii).[271] Unlike s 103, a direction under s 107 may only be made for one or more of fivewhole-of-government purposes.274 By definition, they are not designed to further thespecific objectives of any particular Crown entity. Their focus is on broadergovernment-wide objectives.[272] But that does not mean Parliament intended s 107 to be the only provision thatallows directions for objectives other than those in the parent statute of the entitydirected. Nor does it imply that my interpretation of s 103 is too permissive.Section 107 has other work to do.[273] First, it allows for a single direction to multiple entities. This is not possibleunder s 103.[274] Second, a s 107 direction can be made to any Crown entities (except Crownentity subsidiaries),275 and once made, it will bind all entities named.276 By contrast,a s 103 direction, though also binding, may only be made to Crown agents.277 Apartfrom s 107, autonomous Crown entities must "have regard" to government policydirections but they are not binding.278 Further, there is no power at all to direct anyother category of Crown entity apart from s 107.279[275] Third, a s 107 direction may be made to the companies listed in sch 4A of thePublic Finance Act, even though they are not Crown entities at all.280[276] Fourth, it may be arguable that s 107 goes further than s 103 in that, inadmittedly rare circumstances, it may allow government to make directions that areinconsistent with a directed entity's statutory objectives. But the point is s 107 has itsown discrete purposes which need not necessarily be subordinated to the purposes ofthe directed entity.281 Given my tentative conclusions with respect to the consistency274 Section 107(1).275 Section 107(2)–(3).276 Sections 110(1) and 114(1)(b).277 Section 103(1).278 Section 104(1).279 See s 105. Section 107 was intended to override s 105, given s 107(2)(a) explicitly refers to Crownentity companies.280 Section 107(2A).281 For reasons that will become apparent below at [283]–[287], I do not consider that s 113 wouldnecessarily prevent such a direction.of a Wakatū direction with the scheme of the AC Act, it is unnecessary to explore thatissue further.[277] Is a Wakatū direction covered by any of the five purposes in s 107? It must bearguable that such direction would assist the government in managing risks to itsfinancial position arising from the Wakatū litigation.282 Its effect would be to create aland bank in Te Tauihu to better enable the Crown to meet any award, should one bemade. I do not consider that "risks to the Government's financial position" relate onlyto existential risks. In any event, given that the claim seeks to hold the Crown to apromise to reserve ten per cent of Te Tauihu, together with pā, urupā and cultivationscirca 1845, it must represent a more than de minimis risk to the government's financialposition. That is all that is required for a direction aimed at better managing this risk.Once again, there seems no particular reason to adopt a narrow construction of thatpurpose.[278] By my count, there are seven Crown agents with a physical presence in theTauihu area. And there will no doubt be a number of other Crown entities in thedistrict. The requirements of s 107(2)(c) could therefore be satisfied if a Wakatūdirection were made to multiple Crown entities.[279] I therefore find it reasonably arguable the Minister could make a Wakatūdirection that is consistent with the purposes in s 107(1) and the multi-agencyrequirements in s 107(2).Issue 3: Is it reasonably arguable that s 113 of the CEA is not a bar to a Wakatūdirection under either s 103 or s 107?[280] Sections 103 and 107 of the CEA are both subject to s 113.283 The purpose ofthat section is to protect the independence of particular functions.[281] Section 113 of the CEA provides:282 CEA, s 107(1)(e).283 Sections 103(3) and 113(3).113 Safeguarding independence of Crown entities(1) This Act does not authorise a Minister to direct a Crown entity, or amember, employee, or office holder of a Crown entity,—(a) in relation to a statutorily independent function; or(b) requiring the performance or non-performance of a particularact, or the bringing about of a particular result, in respect of aparticular person or persons.(2) This Act does not change the way in which the following functionsmust be carried out under an entity's Act:(a) statutorily independent functions in an entity's Act; or(b) functions that are carried out by a person acting judicially inrelation to a particular matter in accordance with an entity'sAct.(3) This section applies to all ministerial directions given under this Act,including directions under section 107.[282] The key provisions are subs (1) and (2). Each provides a separate safeguard.Subsection (1) constrains ministerial directions specifically. Subsection (2) introducesa more broadly applicable rule of interpretation.Subsection (1): protection against ministerial interference[283] Section 113(1) prohibits the responsible Minister from directing any Crownentity:(a) in relation to a statutorily independent function;284 or(b) to act or not act, or bring about a particular result, in relation to aparticular person or persons.285[284] The phrase "statutorily independent function" is not used in its ordinary sense.It is defined in s 10 of the CEA as: any matter in respect of which the entity's Act provides that—(a) the function must be carried out independently; or284 Section 113(1)(a).285 Section 113(1)(b).(b) Ministers of the Crown may not give directions[285] The key point here is that the phrase does not capture all functions specificallydelegated by Parliament to the entity alone, nor even its core functions. The protectionis narrower. The entity's Act must, in express terms, either describe the function asindependent, or prohibit ministerial direction in respect of it.286[286] ACC has one statutorily independent function. Where a claimant disputes adecision on their claim, pt 5 of the AC Act applies. It provides a process for internalreview.287 The AC Act expressly requires that ACC appoint an independent reviewer,and that the reviewer has a corresponding duty to act independently.288[287] The management of ACC's investment portfolio is not a statutorilyindependent function. On the contrary, by the terms of s 275(1) of the AC Act, ACC'sduty to invest "as if it were a trustee" is subject to any policy direction under s 103.This means that the second limb of the definition of "statutorily independent function"also does not apply.[288] But would a Wakatū direction be prohibited by s 113(1)(b)? ACC argued thatit would because it would bring about a particular result (cancellation of the sale) inrespect of particular persons (Tauihu iwi).[289] On the first point, the sale has been cancelled without a direction, but it maynonetheless be said that a Wakatū direction would cause ACC to refrain fromperforming a particular act (sale of the land). But would such forbearance be inrelation to "particular persons"? It is arguable that it would not be, for two reasons.286 Examples of statutorily independent functions in terms of the s 10 definition include:(a) Climate Change Response Act 2002, s 5O(1), which provides that the Climate ChangeCommission "must act independently in performing its functions and duties and exercisingits powers under" the Climate Change Response Act;(b) Broadcasting Act 1989, s 21(5), which provides that the Broadcasting Standards Authority"must act independently in performing its statutory functions and duties, and exercising itsstatutory powers, under" the Broadcasting Act;(c) Public Trust Act 2001, s 10, which provides that the Public Trust, "in managing andadministering estates, and in fulfilling any other fiduciary obligations, is to act in anindependent manner free from any direction or other instruction from the Crown"; and(d) Land Transport Management Act 2003, s 95(2), which lists and designates various functionsof the Land Transport Agency as "statutorily independent functions".287 AC Act, ss 134–148.288 Sections 138–139.[290] First, merely withholding the land from sale is an act in relation to the land,not particular persons. Subject to the view I express below, a direction that ACCtransfer the land to Tauihu iwi might conceivably be said to be a direction in relationto them. But a prohibition on transferring the land to anybody by definition cannotrelate to anybody in particular.[291] Second, even if I am wrong about that, I am of the view that Tauihu iwi are not"particular persons" in the sense intended by the Act. They are a collection of tribalcommunities. Apart from the fact that they are related by virtue of common descentfrom their various eponymous ancestors through the 253 beneficiaries living in 1893,they are no different from community descriptors such as "the residents of Nelson orMarlborough". They are not a collection of a few or even a few dozen people. Theynow number in the thousands.289 The fact that they are all related might make them anarrow, even private class in a Pākehā context. But in a Māori context, being relatedis a pre-condition of membership of any tribal community no matter how large inpopulation or geographic extent.[292] It is true, as Courtney J points out,290 that some descent lines have disappearedfrom the list of shareholders of the Wakatū Incorporation due to alienation of shares— voluntarily or otherwise. As a result, some Wakatū shareholders are not membersof Tauihu iwi. This was partly due to compulsory Crown acquisition through theMāori Trustee of "uneconomic" interests in Māori land between 1955 and 1968;291and partly because prior to the enactment of the Ture Whenua Māori Act 1993, non-iwispouses could succeed to shares in Māori incorporations on intestacy in accordancewith the Administration Act 1969. But these matters are not relevant here. Theimportant point is that Mr Stafford was selected to represent all Tauihu iwi in theWakatū proceeding, not just the shareholders of the Wakatū Incorporation.292Although there was tension between Wakatū and iwi when the latter were negotiating289 "2013 Census iwi individual profiles", above n 161. The 2013 Census recorded 2,301 membersof Te Atiawa, 1,341 of Ngāti Koata, 981 of Ngāti Rarua and 395 of Ngāti Tama. There will besome overlap between membership of these iwi, but the total population of Tauihu iwi willnonetheless be substantial.290 Above at [103].291 Māori Reserved Land Act 1955, s 21. An uneconomic interest was defined as having a value thatdid not exceed £25: s 19. These provisions were repealed by s 130 of the Māori AffairsAmendment Act 1967.292 Wakatū, above n 159, at [2], [494] per Elias CJ and [807] per Arnold and O'Regan JJ.their respective Treaty settlements, in the end none of the Tauihu iwi organisationschallenged Mr Stafford's standing to represent all Tauihu iwi. The Supreme Courttook the view that the Incorporation did not represent Tauihu iwi in that proceeding,but accepted Mr Stafford's mandate.293[293] The law of charities is a useful analogy. It has long been the position in NewZealand that individuals whose common characteristic is descent from a tribal ancestorform a public rather than private class for the purposes of the charities test in TheCommissioners for Special Purposes of the Income Tax v Pemsel.294 It is important tounderstand that iwi membership is a Māori way of expressing membership of acommunity. Section 113(1)(b) cannot sensibly be aimed at prohibiting directionsaffecting such a broad class. If it were, it would also prohibit directions for the benefit(or indeed disbenefit) of other communities such as the residents of a particular districtor town. That this was never the intention of the provision may be seen ins 107(2)(c)(ii) of the CEA where it is contemplated that directions may have a regionalfocus. If directions can relate to a place, they must also be capable of relating generallyto the people of that place, or the efficacy of the direction power would be lost.[294] The use in s 113(1)(b) of the term "particular" makes the point. It suggests thatthe focus in s 113(1)(b) is not on broad classes such as communities, but on narrowprivate classes such as a particular claimant for ACC cover or their family. By way ofcontrast, it is difficult to see how, for example, after an earthquake in Nelson, theMinister would be precluded from directing that ACC must keep its Nelson officesstaffed around the clock to service the needs of the community. The residents ofNelson, who would be the beneficiaries of such a direction, would not be "particularpersons" within the meaning of s 113(1)(b). Tauihu iwi comprise the same sort ofbroad class.[295] I conclude it is arguable that s 113(1) of the CEA does not prohibit a Wakatūdirection.293 At [2]–[3].294 Latimer v Commissioner of Inland Revenue [2002] 3 NZLR 195 (CA) at [38]. See also TheCommissioners for Special Purposes of the Income Tax v Pemsel [1891] AC 531 (HL).Subsection (2): protection against CEA override[296] Subsection (2) provides that the CEA should not be construed as overridingprovisions in an entity's Act about:(a) statutorily independent functions;295 or(b) functions carried out judicially.296[297] I have already addressed the issue of statutorily independent functions, and myconclusions in that regard apply equally here.297 As to the second limb, ACC has anumber of functions that must be carried out judicially. They relate generally toindividual claims for cover and the like. They are not relevant in this case. Investmentdecisions under s 275 are plainly not carried out judicially.[298] I also conclude, therefore, that s 113(2) of the CEA does not apply. It followsthat s 113 does not prevent a Wakatū direction.Issue 4: Is it reasonably arguable that ACC is the Crown or fixed with theCrown's fiduciary obligation for the purposes of the caveat?Introduction[299] We have seen that the Minister may have the power to give a Wakatū direction.Indeed, it may be arguable there is an obligation to do so in light of the Crown'sfiduciary obligation. That is the thrust of the Tauihu case. But does that mean it isarguable that ACC is fixed, in its own right, with the Crown's fiduciary obligation?[300] Both ACC and the Attorney-General submitted that it is not. They pointed tos 15(b) of the CEA which declares that statutory entities are legal entities separatefrom "the Crown". This means, it was argued, that in the context of interests in landunder the Torrens system, the degree of ministerial control over ACC is irrelevant. All295 Section 113(2)(a).296 Section 113(2)(b).297 See above at [284]–[287].that matters is that equity will only fix the Crown's obligations on properties of theCrown, and s 15(b) means ACC's properties do not fit that description.[301] These propositions are enticingly simple, but I do not think s 15(b) assists.What, or who, after all, is the Crown? As Lord Simon quipped in Town InvestmentsLtd v Department of the Environment, the crown "is a piece of jewelled headgear underguard at the Tower of London".298 It is often taken for granted that ministers are "theCrown". But they are not — at least not in the sense argued for by the respondents inthis case. Ministers are separate entities who act as servants or agents of the Crown.299If resolving Issue 4 were as straightforward as the respondents suggest, then no landor other asset vested in a minister in that capacity could be fixed with any "Crown"obligation. But we treat ministers as if they are the Crown in law and practice, and forgood reason.[302] This is a part of the broader point made by Dame Alison Quentin-Baxter andProfessor McLean in their text This Realm of New Zealand.300 They suggest thatdefining the Crown with any precision is difficult because, as a corporation, its exactnature remains "somewhat obscure".301 The work "the Crown" must do and themachinery with which it does it have both changed radically from medieval times ofabsolute personal rule to today's constitutional monarchy and its framework ofparliamentary and bureaucratic government. This transformation, the authors suggest,has made the concept of the Crown itself somewhat elastic.302 As a result, the caselaw on the subject is confusing, and statutory usage inconsistent.303 "The Crown" isdefined differently depending on the particular function and the area of law.304298 Town Investments Ltd v Department of the Environment [1978] AC 359 (HL) at 397. In M v HomeOffice [1994] 1 AC 377 (HL) at 395, Lord Templeman said that "the Crown" consists of themonarch and the executive.299 Town Investments, above n 298, at 393 per Lord Morris. He said: "A minister of "the Crown" isand is constantly referred to as a servant of the Crown. But it cannot be suggested that the ministeris or becomes "the Crown". Even if the grandiloquent description of being an "emanation" of theCrown is applied to him he remains separate from the Crown and is not and does not become theCrown."300 Alison Quentin-Baxter and Janet McLean This Realm of New Zealand (Auckland UniversityPress, Auckland, 2017).301 At 40.302 At 40.303 At 41.304 At 42–43.[303] It is this porous boundary that makes s 15(b) unhelpful in resolving Issue 4.The short point is that while s 15 makes it clear that ACC can enter into contracts inits own right and so forth, it tells us little about whether it is so closely bound to theCrown as to benefit from its privileges or be burdened by its obligations. The controltest by its very nature demonstrates that s 15 cannot be dispositive. It only applieswhen the entity in question is a separate legal entity from the Crown. If separate legalpersonality always resolved the question of whether the entity is the Crown, therewould be no need for the test at all. In this respect I disagree with the approach takenby Gilbert and Courtney JJ.[304] As Lord Diplock reminded us in Town Investments, there is a further pointwhich must be kept in mind: what is the Crown is a question of public, not privatelaw.305 In that case, at issue was whether the Secretary of State for the Environmentwas, as lessee, entitled to the benefit of rent freeze regulations; or whether, aseffectively the Crown, the regulations did not apply. The lease in issue provided thatthe relevant Minister acted "for and on behalf of Her Majesty".306 Lord Diplock'spoint there was that it was not open to the parties to pre-empt the appropriate publiclaw enquiry by private agreement.307[305] The fact that this question must be addressed in the realm of public law meansnotions of private law agency must be set to one side. I am not here concerned withthe apportionment of private law responsibilities between agent and principal, not evenby analogy. Crown agency is a unique legal phenomenon.[306] Determining what Professor Joseph describes as the "Crown's reach"308 istherefore primarily a matter of statutory interpretation. It requires the Court todetermine the intention of the relevant legislation by looking to the form and substanceof the relationships it establishes between the entity and (usually) ministers. As Idiscuss below, there are a number of cases in which the courts, when confronted by anentity distinct from the core Crown, choose for one reason or another to treat the entity305 Town Investments, above n 298, at 380. Lord Edmund-Davies joined Lord Diplock's reasons andLord Simon wrote separately but agreed on this point at 397.306 At 378.307 At 382.308 Philip A Joseph Constitutional and Administrative Law in New Zealand (4th ed, Brookers,Wellington, 2014) at [17.2.6(1)].as if it is the Crown. The cases sometimes apply terms such as emanations orinstrumentalities of the Crown as a shorthand for the proposition that for the relevantpurpose, the entity is to be treated as the Crown even when it plainly is not. The lawmakes that possible because the Crown has never been a static concept.309[307] Sometimes the relevant legislation resolves the issue explicitly by declaringthe entity to be an agent of the Crown for some or all purposes.310 Where Parliamenthas not seen fit to provide an express answer, the inquiry required is into whether thelegislation provides for effective control of the entity by the Crown or its Ministers;that is, by the government.311 This is the common law control test. I turn now toconsider, first, the express provisions of the CEA as to ACC's status; and then, in thealternative, whether ACC satisfies the common law control test."Crown agents" under the CEA[308] As I have said, the CEA designates ACC a "Crown agent". According to s 7,the distinguishing feature of Crown agents is that they may be directed to act inaccordance with government policy when performing any of their functions, unlessthe function is to be exercised judicially or is "statutorily independent".312 In thecontext of ACC, this means the Minster may not interfere in individual decisions as toclaimant cover and the like, but all other ACC functions may be the subject ofministerial direction.313[309] Professor Joseph suggests that an "express statutory stipulation" that an entityis or is not either the Crown or "an instrument of the Executive Government of New309 As Lord Simon suggested in Town Investments, above n 298, at 400, it is best to think of the Crownas a "corporation aggregate".310 See, for example, R v Eldorado Nuclear Ltd [1983] 2 SCR 551 (SCC) and Nova Scotia Power Incv R 2004 SCC 51, [2004] 3 SCR 53. In Eldorado Nuclear, the Canadian Supreme Court placedsignificant weight on the fact that the relevant legislation declared Eldorado to be a Crown agent"for all its purposes". In New Zealand the CEA does not go that far. But the relevant legislationin the subsequent Canadian Supreme Court decision, Nova Scotia Power, was similar to s 7 of theCEA in that it provided only that the Nova Scotia Power Corporation was an "agent of Her Majestythe Queen". The Court found this was sufficient to make the corporation a Crown agent for all itspurposes. See also generally: Peter W Hogg, Patrick J Monahan and Wade K Wright Liability ofthe Crown (4th ed, Carswell, Toronto, 2011) at [16.3].311 See Joseph, above n 308, at [17.2.6(1)]; and Hogg, Monahan and Wright, above n 310, at [16.2(a)].312 See the discussion above under Issues 1 and 3.313 See above at [284]–[287] and [297].Zealand" will be conclusive either way.314 The authors of Liability of the Crown gofurther and accept that such stipulation is conclusive even if the entity is not subjectto ministerial control and so would not meet the common law control test.315 AsDenning LJ said in Tamlin v Hannaford:316When Parliament intends that a new corporation should act on behalf of theCrown, it as a rule says so expressly. In the absence of any such expressprovision, the proper inference, in the case, at any rate, of a commercialcorporation, is that it acts on its own behalf, even though it is controlled by agovernment department.[310] The fact that in New Zealand Parliament saw fit to establish a separatesub-category of Crown entity called "Crown agents" and then to place ACC withinthat sub-category can be seen as significant. The drafters must be taken to have beenaware of the foregoing propositions articulated as they are by preeminentcommentators in this field, citing leading authorities from across the Commonwealth.For this reason, Professor Joseph comments on Crown agents in these terms:317Crown agents are the only Crown entities that fall squarely under the Crown'sumbrella. The responsible minister may direct a Crown agent to give effectto government policy, and the entity is under a statutory duty to comply. Thispower and correlative duty subject Crown agents to the degree ofgovernmental control needed to satisfy the common law control test.(Footnotes omitted)[311] It must be noted that s 15 of the CEA did not deter Professor Joseph from thisconclusion. He also rightly, with respect, acknowledges that this designation may notbe conclusive for all purposes.318 It may be overridden by express provisions tocontrary effect in the entity's parent legislation or by specific legislation applicable todiscrete contexts.319 I turn now to consider that possibility.314 Joseph, above n 308, at [17.2.6(1)], citing Miller v New Zealand Railways Corp [2011] NZAR 21(HC) at 24.315 Hogg, Monahan and Wright, above n 310, at [16.3(a)], citing Eldorado Nuclear, above n 310, at576 and Nova Scotia Power, above n 310, at [12]–[13].316 Tamlin v Hannaford [1950] 1 KB 18 (CA) at 25.317 Joseph, above n 308, at [17.2.6(2)].318 At [17.2.6(2)].319 CEA, s 4(1)(b) and (2).(i) The AC Act[312] The AC Act contains no general express override. There are, as already noted,two areas in which the Minister has no direct control over the exercise of ACC'sdiscretions: functions that are either statutorily independent or to be exercisedjudicially in relation to particular persons. When carrying out these functions, ACC isnot an agent of the Crown. By the same token, ACC is the agent of the Crown whencarrying out all other functions. This includes its investment function under s 275 ofthe AC Act. If there were any doubt about ACC's Crown agency for this particularpurpose, such doubt is removed by s 275(1) which, as I have said, expressly providesthat investment decisions are subject to ministerial directions.(ii) Other Crown definitions[313] Other legislation defines "the Crown" or "instruments of the Crown"differently depending on the purpose of the definition.[314] The Public Finance Act (PFA), for example, provides that "Crown" or "theSovereign" includes "all Ministers of the Crown and all departments", but excludesCrown entities.320 This, however, is specific to the purposes of the PFA, which relate(among other things) to accountability for Government expenditure, effectivemanagement of public financial resources, and the reporting obligations of variousCrown-related entities.321 These purposes are not relevant to the issues before thisCourt.[315] Both the Attorney-General and ACC submitted that it is relevant s 49 of thePFA provides that the Crown is not liable for the debts of any Crown entity. I do notconsider this to be relevant either. Section 49 of the PFA says nothing about theobverse — a Crown entity's liability for the obligations of the Crown.[316] On the other hand, the State Sector Act 1988 defines "state services" to mean"all instruments of the Crown in respect of the Government of New Zealand, whether320 Public Finance Act, s 2 definition of "Crown" or "the Sovereign", paras (b) and (c)(ii).321 Section 1A(2).departments, corporations, agencies, or other instruments".322 When the CEA wasenacted, this definition was amended to include Crown entities.323 This definition isspecific to the purposes of the State Sector Act, which are to promote (among otherthings) service to the community, integrity, political neutrality, good-employerobligations, and a culture of excellence among the state sector.324 Once again, thesematters are not relevant to the present case.(iii) Crown Proceedings Act[317] The Attorney-General submitted that the Crown Proceedings Act wasinconsistent with Crown agency for the purpose of ACC's investment functionbecause burdening ACC with the Crown's obligations "seriously undermined" theregime in that Act. Such approach, it was argued, would defeat the rules governinghow proceedings by or against the Crown may be brought, the relief available againstthe Crown, and options for enforcement.325[318] I do not see this inconsistency. Section 3(2)(a) of the Crown Proceedings Actallows any person to sue the Crown for breach of trust. Section 14(2)(a) provides thatthis may be done by bringing civil proceedings against "the appropriate governmentdepartment in its own name" if the "department" can be sued apart from that section— that is, if it is a corporation sole separate from the Crown. Section 24 provides theprocedure for enforcing orders against the Crown, Attorney-General or "anygovernment department". "Government department" or "department" is defined ins 2 of the Act to include "every instrument of the Executive Government of NewZealand".326 But is ACC an "instrument of the Executive Government of NewZealand"? That, of course, is the question in this case. Thus, rather than beinginconsistent with Crown agency for the purpose of investments, the CrownProceedings Act simply leaves the question open.322 State Sector Act, s 2 definition of "state services", para (a).323 Section 2 definition of "state services", para (ab). See also State Sector Amendment Act (No 2)2004, s 4(3).324 Section 1A.325 Those are found in Crown Proceedings Act 1950, ss 14, 16–17 and 24.326 Section 2(1) definition of "government department" or "department", para (a). Compare Krieger,above n 256, at [67] in relation to the narrower definition in the State Sector Act.(iv) Crown land[319] Turning now to treatment of the Crown in relation to land, the Land Act 1948defines "Crown land" generally as "land vested in Her Majesty which is not for thetime being set aside for any public purpose or held by any person in fee simple".327As the authors of Land Law in New Zealand note, this is a very narrow definition notof general application.328 It excludes all reserves (which are administered by theDepartment of Conservation under the Reserves Act 1977), all farmland (which isadministered by Landcorp as a State-Owned Enterprise (SOE)), and all land owned bystate departments.(v) Indefeasibility[320] In substance, both ACC and the Attorney-General argued that the LTA 1952expressly overrides s 7 of the CEA: as a registered proprietor legally distinct from theCrown, ACC's title is indefeasible as against the whole world, including "the Crown".That is, whatever is meant by s 7 CEA, it cannot be construed as subjecting ACC landto Crown obligations.[321] The first point to be made is that land owned by a private person is nonethelesscapable of obtaining the immunities of the Crown for certain purposes. In TheHornsey Urban District Council v Hennell, the commanding officer of a battalion ofarmy volunteers bought land in his own name on which to establish the battalionheadquarters.329 Section 25 of the Volunteer Act 1863 (UK) specifically provided thatland of a volunteer battalion "shall vest in the Commanding Officer". The land wasmortgaged to the Public Works Loan Commissioners for a sum equal to the purchaseprice, plus capital costs, and the commanding officer was repaid. The Public HealthAct 1875 (UK) exempted Crown land from liability for expenses incurred by a localauthority in providing services to the land because the Act did not bind the Crown.330The Court held that the land was effectively Crown land for the purposes of the PublicHealth Act and therefore that Colonel Hennell was not liable to pay for the Council'sexpenses.327 Land Act 1948, s 2 definition of "Crown land".328 D W McMorland and others Land Law in New Zealand (online ed, LexisNexis) at [2.017].329 The Hornsey Urban District Council v Hennell [1902] 2 KB 73 (CA).330 At 80.[322] I address below at [336]–[342] the question of whether the principle in Hennellapplies to Crown burdens as well as benefits. For present purposes it is sufficient tonote only that the courts seem more readily prepared to attribute Crown burdens toindependent entities than they are Crown benefits.331 Assuming that to be the case,the question at this point is whether, in New Zealand, indefeasibility of title makesimpossible this extended distribution of burden in relation to land.[323] The LTA 1952 provides a registered proprietor with an immediatelyindefeasible title subject only to the express exceptions contained in ss 62 and 63; theerror correction mechanisms in ss 80, 81 and 85; and other correction mechanisms inss 77, 89A–E and 199.332 Otherwise, the register is said to be a complete mirror of theinterests in the registered land. The registered proprietor's title may be defeated onlyby that person's actual fraud or the fraud of their agent.333[324] Those are the express exceptions. The single implied exception toindefeasibility is in personam claims against the registered proprietor. As the HighCourt of Australia put it in Bahr v Nicolay (No 2), the Torrens system is "designed toprotect a transferee from defects in the title of the transferor, not to free him frominterests with which he has burdened his own title".334 In personam trust and fiduciaryclaims against the registered proprietor are therefore exceptions to indefeasibility, andwill survive registration whether the interest in question arises before or after thatregistration.335[325] Could any interest claimed by Tauihu iwi be said to derive from ACC as theregistered proprietor?336 Or, put another way, has ACC arguably burdened its title withthe Crown's fiduciary obligation? This depends on whether it holds Morrison Square331 Courts are generally reluctant to extend the Crown's privileges further than is necessary. SeeHogg, Monahan and Wright, above n 310, at [16.2(b)].332 There are also exceptions expressly provided in other statutes such as the Property Law Act 2007and the Property (Relationships) Act 1976.333 Assets Co Ltd v Roihi [1905] AC 176 (PC) at 210. See also Nathan v Dollars & Sense Ltd [2008]NZSC 20, [2008] 2 NZLR 557.334 Bahr v Nicolay (No 2) (1988) 164 CLR 604 at 653.335 Congregational Christian Church of Samoa Henderson Trust Board v Broadlands Finance Ltd[1984] 2 NZLR 704 (HC) at 716–717; Smith v Hugh Watt Society Inc [2004] 1 NZLR 537 (HC)at [80]–[86]; and Unwin v Kennard HC Christchurch CIV-2004-409-1097, 17 June 2005 at [103]–[104]. See also Duncan v McDonald [1997] 3 NZLR 669 (CA) at 683.336 Land Transfer Act 1952, s 137(2)(c).as the Crown's agent. That is not a question of consistency or inconsistency betweenCrown agency and indefeasibility. As I have said, the leading authorities are clear thatwhether an entity has the relevant attributes of the Crown is a question of public law.It therefore logically precedes the application of the Torrens system. If ACC is aCrown agent, it may arguably be treated, in law, as if it is the Crown.337 It cannot beinconsistent with Torrens indefeasibility for ACC's title to be burdened by what, inlaw, is its own obligation. If that is right, then it makes no difference that ACC did notexist when the relevant obligations were accepted by the Crown, just as a governmentdepartment such as the Ministry of Business, Innovation and Employment would bebound even though it did not exist at the time either. On the other hand, if ACC is nota Crown agent in relation to Morrison Square, then to sustain the caveat would beinconsistent with its indefeasibility; it would not be the Crown and would owe noCrown obligations.[326] The authorities require more than just the establishment of a validcounter-interest in the title. It must be unconscionable for the registered proprietor totake advantage of registration before the owner of a counter-interest can impeach theirtitle.338 In other words, a higher level of culpability on the part of the registeredproprietor is required, although it need not amount to actual dishonesty. It is arguablethat ACC's reliance on registration in this case would be unconscionable. First, as Ihave said, the law (arguably) treats ACC as if it were the Crown in relation to its titleto Morrison Square. Second, even if ACC were to be considered entirely separatefrom the Crown in terms of assessing unconscionability, it now plainly has notice ofthe Tauihu iwi interests in Te Tauihu — they are set out fully in the Wakatū decision.Third, to sell or attempt to sell the land would be to knowingly act (as a Crown agent)to defeat a Crown obligation owed to Tauihu iwi. This would be to breach the Treatyitself.339 In light of the constitutional significance of Treaty obligations, the courts arelikely to consider such action to be unconscionable.337 See, for example, Wanganui Borough v Wanganui Education Board [1923] NZLR 524 (SC);Territorial and Auxiliary Forces Association of the County of London v Nichols [1949] 1 KB 35(CA); Bank voor Handel en Scheepvaart NV v Administrator of Hungarian Property [1954] AC584 (HL); Hamlet of Clyde River v Petroleum Geo-Services Inc 2017 SCC 40, [2017] 1 SCR 1069;Chippewas of the Thames First Nation v Enbridge Pipelines Inc 2017 SCC 41, [2017] 1 SCR 1099[Chippewas SCC]; and Hornsey Urban District Council v Hennell, above n 329.338 Duncan v McDonald, above n 335, at 683–684.339 See below at [361]–[366].(vi) Conclusion[327] It is of course unnecessary for me to reach any concluded view on these mattersat this stage. Indeed, given the novel character of the substantive proceeding, it wouldbe unwise to do so.340 But I have no difficulty in concluding that it is reasonablyarguable that ACC is an express agent of the Crown (in the public law sense referredto by Lord Diplock) in carrying out its investment function. It is then also arguablethat ACC holds Morrison Square as if it were the Crown and subject to the Crown'sobligations.[328] In case I am wrong in these conclusions, I turn now to apply the common lawcontrol test.The control test[329] An entity controlled by government will be treated as an agent of the Crowneven if there is no declaration in the statute as to its status.341 The control test is easyto state but not so easy to apply. There is a continuum between the two extremes offull control and no control at all, and (as this case demonstrates) there can be controlfor some purposes but not others. A broad assessment is required in which multipleand often competing factors must be weighed. That is why context is so importantwhen applying the control test.[330] Here, there are four contextual questions to be considered:(i) Does the fact that this case relates to Crown obligations rather thanprivileges or immunities make a difference?(ii) How much statutory control does the government have over ACC?(iii) How much control has the government exercised over ACC in practice?(iv) Is the Treaty of Waitangi relevant?340 See the discussion above at [198]–[200].341 Hogg, Monahan and Wright, above n 310, at [16.2(b)].(i) Privilege vs obligation[331] A distinctive aspect of this case is that its focus is a Crown obligation. Mostof the control test authorities are about whether the entity is entitled to the benefit ofsome kind of Crown privilege, such as priority as a creditor in a liquidation;342 orexemption from income tax,343 local authority charges344 or consent requirements,345rent controls,346 or the effect of limitations.347 The courts have been parsimonious indispensing these privileges, usually because the privilege creates some unfairadvantage for the entity as against private sector competitors. That is why, as noted inLiability of the Crown, any substantial measure of independent discretion will sufficeto deny the status of Crown agent even if the entity is subject to some measure of directcontrol.348[332] For example, in Metropolitan Meat Industry Board v Sheedy, the Minister hadrelatively extensive powers of direction of what was essentially a state-run meatbusiness that charged and kept its own fees. The Privy Council found it was notentitled to the creditor priority of a Crown agent.349 Similarly, in Townsville HospitalsBoard v Council of the City of Townsville, the responsible Minister controlledappointments of board members, the chief executive and key medical staff.Furthermore, all budgets, loans, and plans and tenders for capital works requiredministerial approval. Nonetheless the High Court of Australia considered that:350All persons should prima facie be regarded as equal before the law, and nostatutory body should be accorded special privileges and immunities unless itclearly appears that it was the intention of the legislature to confer them.[333] The Board could not, therefore, avoid the obligation to obtain local authorityplanning consents for its proposed building work.342 Metropolitan Meat Industry Board v Sheedy [1927] AC 899 (PC).343 Commissioner of Inland Revenue v Medical Council of New Zealand [1997] 2 NZLR 297 (CA);Bank voor Handel, above n 337; and British Broadcasting Corp v Johns (Inspector of Taxes)[1965] 1 Ch 32 (CA).344 Wanganui Education Board, above n 337; Southland Boys' and Girls' High Schools Board vInvercargill City Corp [1931] NZLR 881(SC); and Hornsey Urban District Council v Hennell,above n 329.345 Townsville Hospitals Board v Council of the City of Townsville [1982] 149 CLR 282.346 Territorial and Auxiliary Forces Association, above n 337.347 Administrator of Austrian Property v Russian Bank for Foreign Trade (1931) 48 TLR 37 (CA).348 Hogg, Monahan and Wright, above n 310, at [16.2(b)].349 Metropolitan Meat Industry Board, above n 342, at 905–906.350 Townsville Hospitals Board, above n 345, at 291.[334] These examples show that the courts are reluctant to extend Crown privilegesany further than absolutely necessary, particularly in relation to state-ownedcommercial enterprises.[335] Examples of successful privilege cases are Wanganui Borough v WanganuiEducation Board,351 Territorial and Auxiliary Forces Association of the County ofLondon v Nichols,352 and Bank voor Handel en Scheepvaart NV v Administrator ofHungarian Property.353 I need not deal with them in any detail. For the most part, itis not difficult to reconcile these cases with the control test. At least in the way theyare described in the judgments, the entities were subject to thoroughgoing ministerialcontrol, and it would not have been difficult to conclude that they were so closelyassociated with the Crown that they ought to be entitled to its privileges. It helped inthe view of Chapman J in Wanganui Education Board that the provision of educationwas a core state function in New Zealand.354 And, like Hennell, the Territorial andAuxiliary Forces Association and Bank voor Handel cases both related to nationaldefence issues in some way, a function which the courts have always attributed to theCrown. Nonetheless, the control test was plainly met.[336] Two Canadian decisions deal with independent entities said to owe Crownobligations rather than to enjoy Crown privileges. These are particularly relevant inthe present context not just for that reason, but also because they relate to Crownobligations to aboriginal people in Canada, both Inuit and First Nations.[337] Hamlet of Clyde River v Petroleum Geo-Services Inc concerned an oil and gasexploration licence.355 The Supreme Court was required to consider whether theNational Energy Board (NEB), a federal administrative tribunal and regulatoryagency, was an agent of the Crown for the purpose of discharging the Crown'sobligation to consult with Inuit communities before granting the licence.351 Wanganui Education Board, above n 337.352 Territorial and Auxiliary Forces Association, above n 337.353 Bank voor Handel, above n 337.354 Wanganui Education Board, above n 337, at 526.355 Clyde River, above n 337.[338] The Court found unanimously that it was. Strikingly, the Court accepted thatthe NEB was "not strictly speaking" either the Crown or even an agent of theCrown.356 In fact, it had an obligation to act independently of the Crown's ministers,who exercised no control over it.357 But the duty to consult was constitutional in natureby virtue of s 35 of the Constitution Act 1982 (Canada).358 It was grounded in the"honour of the Crown".359 The Court cited with approval the following principleexpressed by Rennie JA (dissenting) in the Federal Court of Appeal in Chippewas ofthe Thames:360The duty [to consult], like the honour of the Crown, does not evaporate simplybecause a final decision has been made by a tribunal established byParliament, as opposed to Cabinet.[339] A second decision issued by the Canadian Supreme Court at the same timeconcerned an appeal from the Federal Court of Appeal decision in Chippewas justcited. The case involved an authorisation to modify an existing oil pipeline.361 Again,the Court affirmed that NEB was the agent of the Crown for the purpose of dischargingthe Crown's consultation obligation.362 In this case the respondents conceded thepoint.363 Were it not for a procedural exemption granted by NEB, the approval soughtcould only have been given by the Governor in Council. The exemption meant thatthe decision fell to NEB rather than the Governor. The Court found that, provided theregulatory agency had the power and capacity to do what the Crown obligationrequired in the circumstances, it could be required to discharge that obligation despiteits structural independence.364[340] The context of these decisions explains why the Court was prepared to go muchfurther than the privilege cases. The obligations in issue were of constitutionalimportance. As I have noted, they related to the constitutional rights of Canadianindigenous peoples guaranteed by s 35 of the Canadian Constitution Act. The356 At [29].357 At [29].358 At [36].359 At [29]. The section guarantees aboriginal and treaty rights of Canada's Aboriginal peoples.360 At [29], citing Chippewas of the Thames First Nation v Enbridge Pipelines Inc 2015 FCA 222,[2016] 3 FCR 96 at [105].361 Chippewas SCC, above n 337.362 At [29].363 At [31].364 At [32].Canadian Supreme Court has said repeatedly that the honour of the Crown requiresthe courts to take a broad and purposive approach to the interpretation of legislationaffecting the rights and interests of indigenous peoples,365 and that the purpose of thisapproach is to promote reconciliation between those peoples and the wider Canadiancommunity.366 These values mandate a non-technical approach.367[341] The parallels between those cases and the present appeal are significant. Theysuggest that the courts should take a broad, non-technical and less restrictive approachto defining the Crown in the New Zealand context too. It is true, of course, that s 35of the Canadian Constitution Act is higher law. But that is not necessarily a materialdistinction. Though the Treaty of Waitangi is not recognised as higher law in the samesense in New Zealand, it is nonetheless an important and potentially powerful aid tointerpretation even where not expressly incorporated into the relevant statute.368 I willturn separately to that question further below.[342] In light of these authorities, it is at least arguable that the strict approach takenwith respect to Crown privilege cases should not apply in the same manner to casesconcerned with Crown obligation. As a general proposition, a more generousapproach may be appropriate to enable the Crown or its agents to discharge Crownobligations. This is likely to be particularly so where the obligation is owed toindigenous communities.(ii) Statutory controls[343] I have already covered this material, but briefly summarise it as follows. TheAC Act empowers ACC to exercise a quasi-judicial role in respect of individualclaims.369 It also confers on ACC a broad discretionary power in respect of its365 See, for example, Rio Tinto Alcan Inc v Carrier Sekani Tribal Council 2010 SCC 43, [2010] 2SCR 650 at [43] and [46]; Minister of Forests v Council of the Haida Nation 2004 SCC 73, [2004]3 SCR 511 at [17]; and Ringstad v Taku River Tlingit First Nation 2004 SCC 74, [2004] 3 SCR550 at [24].366 Taku River Tlingit, above n 365, at [24].367 At [24].368 Huakina Development Trust v Waikato Valley Authority [1987] 2 NZLR 188 (HC);Barton-Prescott v Director-General of Social Welfare [1997] 3 NZLR 179 (HC); and New ZealandMaori Council v Attorney-General [2007] NZCA 269, [2008] 1 NZLR 318.369 See the AC Act, ss 54 and 63–66.investments.370 The CEA then provides for high-level ministerial control in respect ofACC's business and strategic planning.371 It also gives the Minister relativelyunfettered power over the appointment, removal and remuneration of ACC's boardmembers.372 ACC is exempt, however, from the restrictions in ss 161–164 of the CEAconcerning financial products, borrowing, guarantees, indemnities and derivatives;and from the s 165 power of the Minister of Finance to require it to pay its net surplusesto the Crown.373[344] ACC's discretion in respect of its investments is subject to government policydirections, whether under s 103 or s 107.374 Such directions may be made even wherethey are not in furtherance of ACC's statutory purpose.375 The only area over whichthe Minister cannot exercise directive control over ACC is its quasi-judicial decisionsaffecting individual claimants.376 Finally, ACC is subject to the Official InformationAct, the Ombudsmen Act and the PFA.377 Keith J considered the application of theseActs had some significance in Commissioner of Inland Revenue v Medical Council ofNew Zealand, noting that there had been a systematic attempt to ensure that entitiesassociated with executive government in a reasonably close way were subject to anappropriate public accountability regime.378[345] The CEA provides the potential for a high level of ministerial control of allACC functions except those affecting individual claimants and involvingquasi-judicial decisions. That the Minister has not in the past chosen to exercise thatpower is not relevant; it is the degree of control that the Minister is legally entitled tothat matters.379370 Section 275(1).371 See above at [229]–[233].372 See above at [237] and [240].373 CEA, sch 1 pt 1.374 AC Act, s 275(1).375 See discussion above under Issues 1 and 2.376 Decisions in relation to claimants are made both judicially and in respect of particular persons:see CEA, s 113(1)(b) and (2)(b). Reviews of such decisions must be made independently: seeCEA, s 113(1)(a) and (2)(a), and AC Act, s 138.377 See above at [234].378 Commissioner of Inland Revenue v Medical Council of New Zealand, above n 343, at 331; but seeJoseph, above n 308, at [17.2.6(3)].379 Bank voor Handel, above n 337, at 617.[346] I therefore do not agree with the High Court's conclusion that no obligationfixes on ACC until a ministerial direction is made. In my view, the direction power isnot the trigger for the obligation. Rather, it is part of the context that makes it arguablethat ACC is already subject to the obligation because it is a Crown agent.(iii) Control in practice[347] In practice, the government has demonstrated a willingness to access land heldby Crown entities and SOEs for broader government purposes. These de facto controlsare relevant despite the principle I refer to above in Bank voor Handel that the test ishow much control the government can assert in law, not how much it exercises in fact.This is because in Bank voor Handel, legal powers of control existed but were notexercised. The point in Bank voor Handel is there is no "use it or lose it" principle.The present case is different. Here, ministers and Cabinet are using their powers inareas relevant to this case, and ACC is complying. This context may not be conclusive(there is no "use it to prove it" principle either), but it is hardly irrelevant thatgovernment asserts controls over ACC land in fact, and that ACC complies or iswilling to comply.[348] There are three relevant policies or processes in practice.[349] First, in 2007, Cabinet issued its "permanent process" for the disposal of Landof Potential Interest (the LPI process).380 This process applied to "all Crown land soldby Crown agencies". These covered all Crown entities, SOEs, Crown ResearchInstitutes, District Health Boards, and departments. Under this process, if ACC wasconsidering disposing of "land of potential interest", it had to notify Land InformationNew Zealand (LINZ) "as a matter of priority". LINZ would then assess the "potentialvalues" of the land to determine whether steps should be taken for its protection. Suchsteps included withholding the land from disposal. The relevant values included:(a) conservation, ecological and biodiversity value;(b) heritage value and historical ownership;380 Prior to 2007, the process was interim only.(c) Māori historic and cultural values;(d) recreational values; and(e) potential for use in an historical Treaty settlement.[350] If protections were required, ministers would, in consultation with the Ministerof Finance, determine the appropriate compensation to the Crown agency.[351] The then responsible Minister wrote to ACC on 28 September 2007 confirmingthat this process would apply to ACC's land holdings. On 28 November 2007, thethen chief executive of ACC replied that "ACC will be complying with the newrequirements".381[352] The LPI process was discontinued in 2009. In its place, Cabinet introduced apolicy known as the "Protection of Values on Crown-owned Land". This policyremains current. Again, it is intended to apply to all "Crown agencies," including allCrown entities and SOEs.382 Under it, Crown agencies are expected to ensure:383that any values that may be present on the land are properly identified,appropriately managed and protected if necessary before the land is disposedof.If significant values are identified or issues arise during management ordisposal of the land, the relevant oversight agency or Minister should benotified as soon as possible.[353] Values to be considered include potential use in a future Treaty settlement.384Suggested protections for any values identified include, depending on the nature ofthe value, "transferring the land to another Crown agency".385381 The reply referred to the Minister's letter of "15 October", rather than 28 September. This appearsto have been a mistake.382 Protection of values on Crown-owned land (Land Information New Zealand, April 2010) at 1.383 At 1384 At 3.385 At 3.[354] According to LINZ, ministers have written to all agencies advising them of thisexpectation.386 There was no suggestion in the evidence that ACC opposed thisexpectation.387[355] Second, in the Treaty settlement area, there is a system called the "Protectionof Māori Interests in Surplus Crown-owned Land", otherwise known as the ProtectionMechanism. It is a process "for the Crown to consult with Māori when it wishes tosell surplus land".388 If after consultation the Crown agrees to retain the land forpossible use in a future Treaty settlement, the Office of Treaty Settlements (nowTe Arawhiti) will purchase the property and hold it in a landbank.389 The ProtectionMechanism applies to surplus land owned by the Crown and its departments, CrownResearch Institutes, District Health Boards, and Crown entities as agreed to by Cabineton a case-by-case basis, including school boards of trustees.390[356] In his affidavit, Mr Healy noted that there has been no Cabinet directionsubjecting ACC to the Protection Mechanism. This, however, is beside the point.What is important is the implication, apparently accepted by Mr Healy, that if Cabinetchose to apply the Mechanism to ACC, it would be binding.[357] Finally, there are actual controls in place in relation to investment management.All departments (as defined by the PFA), statutory entities, Crown entity companies,and companies listed in sch 4A of the PFA are subject to Cabinet's expectationsregarding investment management.391 These are expressed in the Cabinet OfficeCircular entitled "Investment Management and Asset Performance in the StateServices". In particular, Crown entities are to treat the circular as an expression ofgovernment policy.392386 At 1.387 I note that in his affidavit of 19 January 2018, John Healy, head of business performance andplanning at ACC, suggested there had been no ministerial direction to ACC, but this seems to beinconsistent with the comprehensive terms of the LINZ factsheet exhibited to his affidavit, and itmay be he was mistaken.388 Protection of Māori Interests in Surplus Crown-Owned Land: Information for Crown agencies(Office of Treaty Settlements, June 2006) at 2.389 At 2.390 At 4.391 Cabinet Office Circular "Investment Management and Asset Performance in the State Services"(10 October 2019) CO 19/6 at [1].392 At [4.2].[358] The circular sets out a system of detailed rules in relation to investmentmanagement. For example, ACC is a Tier 1 investment-intensive agency; that is, ithas asset portfolios valued at more than $1 billion.393 This means it is to be given anInvestor Confidence Rating by Treasury, pursuant to which controls may be imposedor relaxed in relation to its investment decisions.394 Furthermore, in relation toinvestments by Crown entities, public private partnership investments and disposal ofhigh risk or high value investments require Cabinet consideration and consultationwith the responsible Minister before disposal.395 What "high risk" or "high value"means is assessed by the Treasury.[359] To summarise, ministers and Cabinet have intervened in respect of the disposalof land assets of Crown entities, generally using the more informal mechanism ofletters of expectation. While Treaty land banking has not been applied to ACC, itseems to be accepted that such application would not be inconsistent with thelegislation. The slightly more formal mechanism of Cabinet Office Circular has beenimposed on investment management and performance, with an indication thatTreasury may impose stringent controls on the disposal of ACC's investmentsdepending on its Investor Confidence Rating.[360] From a practical point of view, therefore, government can and does exerciseoperational control over land investment and disposals by Crown agencies wherewider government policy is considered to require it.(iv) The Treaty[361] ACC submitted that the proceeding brought by Tauihu iwi is a private lawaction involving no wider public interest. Ordinarily, an action in relation to privateland based on an alleged fiduciary obligation could be accurately described in thatway. But as the Supreme Court noted in Wakatū, the context in this proceeding is thelong unfulfilled rights of the original indigenous owners of Te Tauihu.393 "Investment Intensive Agencies" (23 February 2017) Te Tai Ōhanga: The Treasury<www.treasury.govt.nz>.394 CO 19/6, above n 391, at [65] and [67].395 At Annex 1 Table 2. This may be required even if the agency has decision rights in legislation: atn 20.[362] The way in which the Crown deals generally with indigenous owners inrelation to their customary lands has, for more than a generation now, been seen inNew Zealand as giving rise to fiduciary obligations,396 or at least obligationsanalogous to that of a fiduciary.397 These obligations are, as the Canadian SupremeCourt pointed out in Guerin, sui generis in nature.398 They are not merely private lawobligations. Indeed, in the Canadian context, they are constitutional.[363] The fiduciary obligation accepted by the majority in Wakatū was of the suigeneris Guerin kind.399 In Canada, one of the sources of the fiduciary obligation isthe Royal Proclamation of 1763, issued following the defeat of France in the SevenYears' War. It proclaimed the Crown's intention to protect the lands of NorthAmerica's indigenous peoples west of the Appalachian Mountains from acquisitionby persons other than the Crown. The New Zealand equivalent of the RoyalProclamation is the Treaty of Waitangi in 1840. As Elias CJ noted in Wakatū, theassumption of a Crown fiduciary duty in New Zealand began with the Treaty, and wasalso reflected in the Charter of 1840.400 This assumption of responsibility was thenrepeated in the Royal Instructions and in extensive official correspondence on thesubject.401 The Treaty is therefore plainly relevant to the issues in this appeal.[364] That is not, however, because this is a Treaty claims case as that phrase hascome to be understood in New Zealand since the establishment of the WaitangiTribunal, the New Zealand Māori Council litigation of the 1980s and the subsequentcreation of the Crown's Treaty settlement infrastructure. Rather, the Treaty is relevantbecause the obligation upon which this proceeding is based is reflected and to someextent sourced in the Treaty. As with Canada, that means there is a constitutionaldimension to this case. There is of course no equivalent in New Zealand of s 35 of the396 Te Runanganui o Te Ika Whenua Inc Society v Attorney-General [1994] 2 NZLR 20 (CA).397 New Zealand Maori Council v Attorney-General, above n 368, at [80], discussing the decision ofCooke P in Te Runanga o Wharekauri Rekohu Inc v Attorney-General [1993] 2 NZLR 301 (CA).As the Supreme Court noted in a minute issued following withdrawal of the application for leaveto appeal to that Court, the parties agreed that the Court of Appeal's restriction of the fiduciaryduty to the category of "analogous" only was strictly obiter: New Zealand Maori Council vAttorney-General SC 49/2007, SC 50/2007, 4 November 2008. See also the extensive discussionon this subject by Elias CJ in Wakatū, above n 159, at [381]–[387].398 Guerin v R [1984] 2 SCR 335 at 385.399 Wakatū, above n 159, at [345]–[354], [366], [382]–[390] and [392] per Elias CJ, and [771]–[779]and [784] per Arnold and O'Regan JJ.400 At [380].401 At [100]–[103], [116] and [380] per Elias CJ.Canadian Constitution Act, but such provision is not necessary to give this case aconstitutional character. Rather, that character is inherent in the Treaty itself.[365] The provisions of the CEA ought, if possible, therefore, to be interpreted so asto enable the Crown to discharge its obligations to Tauihu iwi in a manner consistentwith the Treaty partnership. It would not be consistent with the Treaty partnership forthe Crown, thus burdened by its fiduciary obligation, to fail to protect the Tauihuinterest pending final disposition of the substantive Wakatū proceeding.402 Therelevant Treaty principle in this context is the right to a remedy for breach.403 Norwould it be consistent with the Treaty partnership to allow the Crown's agent to benefitfrom that failure by obtaining the proceeds of the sale of Morrison Square freed of anypotential Crown obligation.[366] In my view, it is perfectly possible to construe the CEA in a manner consistentwith the Treaty partnership and Tauihu iwi's right to a remedy. It is at least arguable,therefore, that a Treaty-consistent construction ought to be adopted.(v) Conclusion[367] I consider therefore that it is reasonably arguable that the relationship betweenthe government and ACC satisfies the common law control test. That conclusionreinforces my view earlier expressed that the effect of s 7 of the CEA is to make ACCa Crown agent (in the public law sense) for all relevant purposes. In other words, it isreasonably arguable that the express intention of Parliament on this question and thewider context are both consistent with ACC's status as a Crown agent in relation toMorrison Square.Shared responsibility[368] I have concluded that it is arguable the Minister has the power to prevent anysale of Morrison Square, and that ACC is sufficiently closely associated with theCrown to be burdened by the Crown's obligation. Might that mean, if Tauihu iwisucceed in their substantive Wakatū proceeding, that ACC will then be obligated, as402 See New Zealand Māori Council v Attorney-General [1987] 1 NZLR 641 (CA).403 At 693 per Somers J.an institutional constructive trustee in its own right, simply to transfer MorrisonSquare to them at no cost? It could be argued to the contrary that ACC is not permittedto do so because to transfer an investment asset without consideration would beinconsistent with its function as an investment manager tasked with protecting thelong-term sustainability of the scheme.[369] If ACC were the only party involved and the burden fell on ACC alone, thenthis argument might have some force. But that is not the reality. ACC does not standalone; it is part of a "corporation aggregate" as Lord Simon described it in TownInvestments.404 There are therefore many ways in which the obligation it shares withthe rest of the Crown can be discharged, some lawful and some not. How the transferis to be effected (if that is the result) is a matter for the entities bearing the obligation,provided it can be done lawfully. In this case, the Minister along with the Minister ofFinance may simply agree a compensation package to facilitate the transfer. This isanalogous to the way the Treaty claims Protection Mechanism works. Such outcomewould protect the integrity of the investment function and discharge the Crown'sfiduciary obligation at the same time. These arrangements are really to be seen asinternal matters for the corporation aggregate. It must be assumed that both ACC andthe Ministers will behave in accordance with the honour of the Crown and consistentlywith its fiduciary obligation. It is not to be assumed that the Crown (whether theMinisters or ACC) would behave in a manner which breached either statutory orfiduciary duties. The question is therefore not whether any obligation is owed, buthow it might be discharged.[370] I am aware that the parties in this proceeding do not include theAttorney-General on behalf of the Minister, but I do not see that, at this stage, hisabsence from the intitulments is problematic. First, the Attorney-General intervenedand was heard in the High Court and this Court. Second, he can still be formally joinedto these caveat proceedings and any subsequent substantive proceedings in the eventthe caveat is sustained.405 Third, with the benefit of hindsight, it might have beenbetter to consolidate this appeal with Mr Stafford's judicial review application as was404 Town Investments, above n 298, at 400.405 Court of Appeal (Civil) Rules 2005, r 48(2); and High Court Rules 2016, r 4.56(1)(b)(ii).initially sought by Mr Stafford. And fourth, the Attorney-General is the defendant inthe substantive Wakatū proceeding.Floodgates?[371] ACC argued that holding it to the Crown's obligations in relation to land wouldimpair the value of its investment portfolio in the following ways:(a) it would decrease the value of its property portfolio by making it moredifficult to sell in a timely way;(b) it would "seriously reduce" the attractiveness of property as aninvestment;(c) it would "compromise" ACC's ability to perform successfully in acompetitive property market; and(d) ACC would need to look to less attractive investment options whichwould have a negative effect on its investment returns.[372] According to the evidence, ACC's only investment property in Te Tauihu isMorrison Square. It is not otherwise exposed in the context of this claim. Insofar asthe Wakatū form of fiduciary obligation is concerned, therefore, this floodgatesargument is overstated.[373] As to risks in relation to Treaty claims generally, these are creatures of policythat do not give rise to rights justiciable in the ordinary courts outside the legislativeand policy framework of historical Treaty claims. Almost all land alienated from itscustomary owners in the colonial period by virtue of Crown Treaty breach wasalienated in accordance with the law of the time. For the most part, the problem wasthe law itself was Treaty-breaching. It is true that some transfers were unlawful forvarious often technical reasons, but where this was the case, retrospective legislationwas invariably enacted to render the transfers lawful.406 The circumstances will be406 See, for example, The East Coast District Land Titles Validation Act 1871.rare indeed where Treaty claimants other than Tauihu iwi will be able to establish ajusticiable Crown fiduciary obligation in relation to their former lands.407[374] Might there be other kinds of equitable Crown obligations outside the Treatyclaims sphere that would fall on ACC? The possibility cannot be entirely discounted,but it is certainly difficult to conceive of the circumstances where such obligationsmight be found. If they are found, the circumstances are likely to be compelling. Icannot accept that a finding in favour of Mr Stafford in this appeal will lead to thesorts of catastrophic consequences about which ACC warns.Issue 5: Is it reasonably arguable that the Crown owes a fiduciary obligation tohold Morrison Square for Tauihu iwi?[375] Even if ACC is a Crown agent and subject to the requisite control, theAttorney-General argued that the Crown owed no obligation to Tauihu iwi with respectto Morrison Square. Rather, the Crown, he submitted, discharged its obligation byretaining Section 443 as a native reserve and later transferring it to the Public Trustee.He pointed out that there was in fact no claim in the Wakatū proceeding in relation tolands that were reserved; only in relation to lands that were not. He thereforesubmitted there is no arguable case that the Crown breached any duty in relation to theparts of Morrison Square within the original Section 443. Further, theAttorney-General argued that the two thirds of Morrison Square that compriseSections 442 and 439 were never part of the reserves, and so no obligation attached tothose parts either.[376] I do not agree that the claim is unarguable on its facts if ACC is a Crown agent.In Wakatū, Elias CJ and Glazebrook J suggested that the town and suburban reservesselected in 1842 did not exclude all cultivations and occupations within those areas.408Tauihu iwi alleged that 12 acres of town reserves were in fact already occupied by the407 The Wakatū proceeding in relation to the Nelson Tenths continued despite the enactment ofthe Ngāti Kōata, Ngāti Rārua, Ngāti Tama ki Te Tau Ihu, and Te Ātiawa o Te Waka-a-Māui ClaimsSettlement Act 2014 because it was preserved by s 25(6) of that Act: see Wakatū, above n 159, at[487]–[488] per Elias CJ, [712]–[714] per Glazebrook J and [824]–[825] per Arnold andO'Regan JJ. The same savings provision does not appear in either of the Settlement Acts coveringthe Wellington and Palmerston North reserves: see Port Nicholson Block (Taranaki Whānau ki TeUpoko o Te Ika) Claims Settlement Act 2009, s 10; and Rangitāne o Manawatu Claims SettlementAct 2016, s 15.408 Wakatū, above n 159, at [134] and [548].customary owners as their kāinga and cultivations but were still counted as Tenths.409The extent and effect of this is a matter of contention410 and will be resolved on theevidence. But it is certainly arguable that up to 12 additional town sections shouldhave been but were not reserved. As a result, it is also arguable that the unreservedlands transferred to the New Zealand Company were subject to a continuing obligationto set those 12 sections aside. This includes Sections 442 and 439. As Glazebrook Jsuggested in Wakatū, it would be a novel view of the law that trust obligations can beextinguished by breach, on-sale and reacquisition.411[377] There is then the further question of the 47 town acres that were initiallyreserved but subsequently withdrawn due to low settler demand for their own townsections.412 The Supreme Court in Wakatū accepted that this reduction may have beenin breach of the Crown's fiduciary obligation.413 The Court left open the question ofwhether Tauihu rights engaged by the 47-acre reduction could only be vindicated bythe provision of those 47 town sections identified at the time, or whether the fiduciaryobligation remained at large and could be satisfied by any 47 acres within the townarea. If the latter, then it is arguable that Sections 439 and 442 are subject to thatobligation also.[378] As noted, Section 443 was in fact reserved. The Crown's fiduciary obligationwas thus discharged in that respect. The land was on-sold by the Māori Trustee in1969 and 1970. The question then is whether, despite the initial reservation, thefiduciary obligation may be re-enlivened over Section 443, in light of the Crown'sarguable failure to meet its overall obligations in respect of town sections generally.[379] Mr Stafford relied on the "swollen assets theory" of tracing to establisharguability. One version of this theory posits that where a trustee has misappropriatedtrust assets, the beneficiary is entitled to an equitable charge over all of the trustee's409 At [34].410 At [36].411 At [586].412 At [168] per Elias CJ and [529] per Glazebrook J.413 At [443]–[444] per Elias CJ, [587] per Glazebrook J and [788]–[789] per Arnold and O'Regan JJ.assets so long as the trustee continues to be enriched by the misappropriation.414 Theapplicability of this theory is uncertain,415 but it may not be necessary to go that far.[380] Here, ACC owns assets within an already-encumbered asset class — that is,town sections. For the same reasons set out above at [377], it is at least arguable thatthe Crown's obligation applies to town sections generally, so that it must continue tomake available any assets it may own in that asset class until the obligation is satisfied.If that is right, then the fact that Section 443 was originally in the beneficial ownershipof Tauihu iwi will arguably be irrelevant. What is important is that the Crowncurrently owns Section 443 and remains in overall breach of its obligations to Tauihuiwi.[381] I conclude, therefore, that it is reasonably arguable that Tauihu iwi have aproprietary interest derived from the Crown (and therefore ACC) in Morrison Square.Issue 6: Should the Court deal with a moot question, and if so, is there a discretionunder s 143 of the LTA 1952 to sustain a caveat where no reasonably arguablecase was found?[382] Whether a court should deal with a moot issue is a question of judicial policy,not jurisdiction.416 Generally, courts will not decide issues where a decision will haveno practical effect on the rights of the parties involved.417 There are three rationalesfor this general policy:418(a) the adversarial nature of the judicial system and the need for fullargument;(b) scarcity of judicial resources; and(c) the need for courts to show proper sensitivity to their constitutionalrole.414 Simon Evans "Rethinking tracing and the law of restitution" (1999) 115 LQR 469 at 492–494.415 See Re Goldcorp Exchange Ltd (in rec) [1994] 3 NZLR 385 (PC) at 408–409.416 Gordon-Smith v R [2008] NZSC 56, [2009] 1 NZLR 721 at [16].417 At [16].418 At [18], citing Borowski v Canada (Attorney-General) [1989] 1 SCR 342 at 358–362.[383] Nevertheless, a court may exercise its discretion to decide a moot issue inexceptional circumstances where consideration of these three rationales warrants adeparture from the general approach of restraint.419[384] Since both Mr Stafford and ACC accepted the issue is now moot, little wasmade of this point at the hearing. The submissions understandably focused on thecontested issues discussed above. While the particular issue may be novel andimportant, those attributes are not necessarily decisive.420 In any event, I rather doubtwhether it is of sufficient importance. I am of this view for three reasons.[385] First, as far as I can tell, the decision of Collins J in this case is the only exampleof a purported exercise of such discretion; otherwise the consensus appears to be thatsuch discretion does not exist.421 There does not yet appear to be a real controversyaround the question.[386] Second, and more importantly, the provision upon which Collins J relied hasbeen replaced by s 142 of the Land Transfer Act 2017 which is quite differentlyworded. Even if there was a debate about the meaning of s 143 of the LTA 1952 thatneeded to be resolved, the utility of doing so is greatly reduced by its recent repeal.[387] Finally, from a practical point of view, I have concluded there is a reasonablyarguable case to sustain the caveat in this proceeding. Whether or not it exists,Collins J's purported exercise of a s 143 discretion therefore falls away.[388] I am therefore of the view that the present case does not warrant a departurefrom the usual policy of avoiding moot issues. The question whether there is adiscretion to sustain a caveat without a reasonably arguable case would be betterconsidered in relation to s 142 of the new Land Transfer Act and with the benefit offull argument on the issue in a properly adversarial setting.419 Baker v Hodder [2018] NZSC 78, [2019] 1 NZLR 94 at [33].420 Borowski v Canada, above n 418, at 362.421 Bishop Warden Property Holdings Ltd v Autumn Tree Ltd [2018] NZCA 285, [2018] 3 NZLR 809at [24], citing Bank of New Zealand v McLachlan HC Christchurch CIV-2009-409-2545, 7December 2009. See also McMorland and others, above n 328, at [10.020(b)].Summary[389] I conclude as I started. This is a caveat case. It is sufficient for Mr Stafford todemonstrate that his case is not completely untenable. I consider he has done that. Itis also to be remembered that this is a unique case arising in a difficult and developingarea of the law. This context suggests Mr Stafford should be given a reasonablemargin of appreciation at this preliminary stage.[390] I have concluded it is reasonably arguable that the relevant ministers have thepower to direct ACC not to sell Morrison Square, whether under s 103 or as part of awider direction under s 107 to Crown entities with land in Te Tauihu.[391] I have further concluded that it is reasonably arguable ACC holds MorrisonSquare as an agent of the Crown and therefore subject to the Crown's obligations toTauihu iwi, if any. I consider that neither the CEA nor the LTA 1952 precludes such aconclusion. On the contrary, it is appropriate to construe the relevant provisions in amanner that enables the Crown, through its agent ACC, to protect Tauihu iwi's rightto a remedy, and to enable such remedy in the event the Tauihu claim is upheld.[392] I do not consider it to be a barrier to the sustainability of the caveat, or theimposition of the Crown's obligations on ACC, that the discharge of such obligationswould require the Minster and ACC to cooperate if necessary, pursuant to theMinister's formal powers of control. Cooperation within the corporation aggregate isthe means whereby any rights of Tauihu iwi may be vindicated without underminingthe long-term sustainability of the scheme. Resort in argument to reliance on the factthat the Crown and ACC are separate legal entities so as to avoid responsibility for theprotection of Tauihu iwi rights is inconsistent with the honour of the Crown and theway Treaty partners should behave towards each other.[393] Finally, since it is now moot, I do not consider it is appropriate to address thequestion of the Court's discretion under s 143 of the LTA 1952 in the context of thisparticular case.Conclusion[394] I would allow the appeal and dismiss the cross-appeal.[395] I would therefore order that the caveat not lapse until further order of the HighCourt.Solicitors:Pitt & Moore, Nelson for AppellantAccident Compensation Corporation, Wellington for RespondentCrown Law Office, Wellington as Interveners