WAITAKERE FARMS LTD v MAWHINNEY [2023] NZHC 993

WAITAKERE FARMS LTD v MAWHINNEY [2023] NZHC 993 [28 April 2023]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2022-404-1499[2023] NZHC 993BETWEEN WAITAKERE FARMS LIMITEDPlaintiffAND PETER WILLIAM MAWHINNEY ANDSIXTY-SIX AUCKLAND LIMITEDDefendantsAND AUCKLAND COUNCILThird Party/Counterclaim DefendantHearing: 20 April 2023Appearances: AAH Low for plaintiffP W Mawhinney for himself and second-named defendantSCM Waalkens and R E Argyle for third party/counterclaimdefendantJudgment: 28 April 2023JUDGMENT OF PETERS JThis judgment was delivered by Justice Peters on 28 April 2023 at 4.45 pmpursuant to r 11.5 of the High Court RulesRegistrar/Deputy RegistrarDate: ...................................Solicitors: Cook Morris Quinn, AucklandRice Speir, AucklandCounsel: AAH Low, AucklandCopy for: DefendantsIntroduction[1] This judgment determines two applications:(a) An application by Auckland Council ("Council") of 15 November 2022in CIV-2022-404-1499 ("CIV-1499"). By this application the Councilseeks an order striking out a counterclaim against it and setting aside athird party notice.(b) An (amended) application of 24 February 2023 by Mr Mawhinney andSixty-Six Auckland Ltd ("Sixty-Six"). By their application,Mr Mawhinney and Sixty-Six seek orders that CIV-1499 andCIV-2023-404-137 ("CIV-137") be heard together, and either stayedpending determination of CIV-2019-404-36 ("CIV-36"), or heard at thesame time as that proceeding. Mr Mawhinney also seeks to be joinedto CIV-137.[2] The director of Sixty-Six is Mr A M Mawhinney and Mr W P Mawhinney isits sole shareholder. Neither has sworn an affidavit regarding these applications, andnor was Sixty-Six represented by counsel at the hearing before me. I shall acceptMr Mawhinney's submissions as made for himself and on behalf of Sixty-Six.However, as Mr Mawhinney knows, a company must appear by counsel unless leaveotherwise is given. Mr Mawhinney did not seek leave from me but to be fair to himnor did I raise the point. As it turns out, nothing particularly turns on this given theview I take of the applications. That said, I draw Mr Mawhinney's attention to thepoint as Sixty-Six may require representation on future appearances.[3] I record that I have received extensive submissions from the parties. At thecommencement of the hearing, Mr Mawhinney sought an adjournment which Ideclined. I did, however, allow him until 5 pm, 27 April 2023 to file and serve anyadditional submissions he wished and I received those submissions on 26 April 2023.[4] It is necessary to say something about each proceeding before considering theapplications.CIV-2019-404-36[5] CIV-36 is an appeal by Mr Mawhinney and "trustees of the Forest Trust"against a decision of the Environment Court delivered in 2018.1 The trustees of theForest Trust are not named in the intituling. From the evidence before me, it appearsthe trustees change frequently. However, in an affidavit sworn on 20 March 2023,Mr Mawhinney states the trustees "include" Dokad Trustee Ltd and Milton Milan Ltd.The director of each of these companies is Mr A M Mawhinney. The shareholder inMilton Milan is Mr W P Mawhinney, and the shareholders in Dokad Trustee Ltd areMr W P Mawhinney as to 99.9 per cent with Mr Mawhinney holding the balance.[6] The Environment Court decision was in respect of an appeal by Mr Mawhinneyin his capacity as trustee of Waitakere Forest Land Trust and the Forest Trust.[7] The Council is the respondent to the appeal in CIV-36.[8] The matters before the Environment Court concerned an application byMr Mawhinney (and possibly other parties) for consent to subdivide. Mr Mawhinneytook issue with the manner in which the Council, or its predecessor, had assessed theapplication and matters consequential thereon, including the nature of conditions theCouncil had imposed when it granted the consent ("conditions"). Mr Mawhinney'scase before the Environment Court was that the Council had erred in assessing theapplication as one for a discretionary activity rather than a controlled activity or arestricted discretionary activity, and that some of the conditions imposed were ultravires as a result.[9] The Environment Court upheld the Council's decision to treat the applicationas one for a discretionary activity and it also ruled on the various other matters beforeit.[10] On 7 January 2019, Mr Mawhinney and the trustees of the Forest Trust,whoever they may have been at the time, lodged their notice of appeal to theHigh Court against the Environment Court's decision. An appeal to the High Court1 Mawhinney v Auckland Council [2018] NZEnvC 239.against a decision of the Environment Court may be brought on a question of law. Thenotice of appeal lists 11 such questions, or at least what are said to be questions of law.[11] CIV-36 has been in abeyance since an order by Wylie J of 11 April 2019.2 Thebackground to that order is as follows. On 28 February 2019, pursuant to s 166 SeniorCourts Act 2016, Hinton J made an order restraining Mr Mawhinney "in any capacity from commencing or continuing any civil proceeding (or matter arising out of acivil proceeding)" relating to identified parcels of land.3 As a result, Mr Mawhinneyrequired leave to continue the appeal. Wylie J declined leave. Although Hinton J hadimposed the maximum period of restraint of five years, the Court of Appealsubsequently reduced this to three years, and that three years expired at the end ofFebruary 2022.4[12] In the course of their submissions during the hearing, the Council, WFL andthe trustees (these latter two being defined below) submitted that Wylie J's order, or atleast its effect, was to strike out or dismiss the appeal. In his minute of 11 April 2019,Wylie J said:[11] ... In my judgment, Mr Mawhinney should be restrained fromcontinuing with his appeal against the Environment Court's decision.[12] Accordingly, leave to continue with the appeal is declined.[13] It is apparent from the minute that Wylie J considered the appeal unmeritoriousbut whether his order had the effect alleged is a different matter. As it happens, I amable to determine the applications before me without resolving that issue. Theimportant point for present purposes is that the appeal has not progressed at all in thelast four years and there is some real doubt about whether it will ever be heard, giventhe Council's submissions.CIV-2022-404-1499[14] CIV-1499 is a claim by Waitakere Farms Ltd ("WFL") against Mr Mawhinneyand Sixty-Six commenced in late-August 2022.2 Mawhinney v Auckland Council HC Auckland CIV-2019-404-36, 11 April 2019.3 Auckland Council v Mawhinney [2019] NZHC 299 at [160].4 Mawhinney v Auckland Council [2021] NZCA 144.[15] WFL is the registered proprietor of the land in record of title identifier1050478, North Auckland Registry. The land is subject to an encumbrance in favourof Mr Mawhinney and Sixty-Six, and they are also the holders of a Forestry Rightunder the Forestry Rights Registration Act 1983 ("Right"). The encumbrance confersrights ancillary to the Right. Both the encumbrance and Right were originally grantedor created on 28 September 2010.[16] By its first cause of action, WFL seeks orders under s 339(1)(c), alternatively339(1)(a), Property Law Act 2007 ("PLA"). Section 339, set out below, permits theCourt to make orders in respect of property owned by "co-owners", as defined in s 4PLA, which is also set out below. I have reservations about whether WFL on the onehand, and Mr Mawhinney and Sixty-Six on the other, are co-owners within thedefinition but it may be that I have overlooked some relevant matter.[17] By its second cause of action, and in the alternative, WFL seeks variousdeclarations and other relief regarding the Right and encumbrance. Its case is thatneither serve any useful purpose or confer any practical benefit.[18] Mr Mawhinney and Sixty-Six have counterclaimed and issued a third-partynotice against the Council, resulting in the application by the Council for the ordersreferred to in (a) above. I should record a caveat, however, that Ms Low, for WFL,submits that there is in fact no counterclaim against WFL. If that is so, then therecannot be a counterclaim at all, as the plaintiff is a necessary party to a counterclaim.[19] As matters stand, CIV-1499 has a two day hearing on 10 and 11 May 2023. Itwill be necessary to adjourn the hearing if the Council fails in its application.CIV-2023-404-137[20] CIV-137 is an originating application of 14 November 2022 by Peter and LindaAlderton as trustees of the Peter Alderton Family Trust ("trustees") against Sixty-Six.The trustees are the registered proprietors of a 9/10th share of the land in record of titleidentifier 645960. Sixty-Six is the registered proprietor of the remaining 1/10th share.The land in the record of title comprises Lot 309, DP 210991 being 4.28 ha, and a 1/8thshare in each of Lot 200, DP 210991 and Lot 9, DP 166619, both being access lotsshared by other owners of land in the vicinity.[21] Aside from their ownership interest, the trustees are also the lessees of all theland to which I have referred, with the exception of Lot 200, for a term of 999 years,commencing 1 July 1997.[22] The trustees are seeking an order under s 339(1)(c) PLA that they acquire the1/10th share held by Sixty-Six.[23] Sixty-Six opposes the trustees' application on various grounds.Section 339 Property Law Act 2007[24] As I have said, s 339(1) PLA, relevant to both CIV-1499 and CIV-137, permitsthe Court to make orders affecting land owned by co-owners. Relief is discretionaryand may only be granted after consideration of matters provided for in s 342, which itis unnecessary for me to include. Section 339(1) provides:339 Court may order division of property(1) A court may make, in respect of property owned by co-owners, anorder—(a) for the sale of the property and the division of the proceedsamong the co-owners; or(b) for the division of the property in kind among the co-owners;or(c) requiring 1 or more co-owners to purchase the share in theproperty of 1 or more other co-owners at a fair and reasonableprice.[25] Co-owner is defined in s 4 PLA as "a tenant in common or a joint tenant".Application by Mr Mawhinney and Sixty-Six[26] I have set out in (b) above the orders sought by Mr Mawhinney and Sixty-Six.WFL and the trustees oppose the making of the orders. The Council abides thedecision of the Court.[27] The application as to the order in which the proceedings should be heard ismade pursuant to High Court Rules 2016, r 10.12, which provides:10.12 When order may be madeThe court may order that 2 or more proceedings be tried at the same time or may order any of them to be stayed until after the determination of anyother of them, if the court is satisfied—(a) that some common question of law or fact arises in both or all of them;or(b) that the rights to relief claimed therein are in respect of or arise outof—(i) the same event; or(ii) the same transaction; or(iii) the same event and the same transaction; or(iv) the same series of events; or(v) the same series of transactions; or(vi) the same series of events and the same series of transactions;or(c) that for some other reason it is desirable to make an order under thisrule.[28] The grounds Mr Mawhinney and Sixty-Six have specified are that:(a) the three proceedings relate to the same general area of land; and(b) it is desirable and a more efficient use of Court resources to determineall the proceedings at the one time but, in any event, with CIV-36resolved in advance.[29] The application that Mr Mawhinney be joined to CIV-137 is made pursuant tor 4.56, which provides:4.56 Striking out and adding parties(1) A Judge may, at any stage of a proceeding, order that—(a) the name of a party be struck out as a plaintiff or defendantbecause the party was improperly or mistakenly joined; or(b) the name of a person be added as a plaintiff or defendantbecause—(i) the person ought to have been joined; or(ii) the person's presence before the court may benecessary to adjudicate on and settle all questionsinvolved in the proceeding....[30] Mr Mawhinney seeks to be joined on the basis that he and Sixty-Six are bothtrustees of Sixty-Six Auckland Trust, that the trustees are obliged to act unanimously,and that Sixty-Six has entered into an agreement to with Mr Mawhinney to transferpart of its interest in the land in issue in CIV-137.[31] I decline to stay CIV-1499 and CIV-137, or to require that they be heard at thesame time as CIV-36, for the following reasons.[32] First, for the reasons I have given there is no prospect of a prompt hearing ofCIV-36, even if it is able to be pursued. That there is no prospect of a prompt hearingis in contrast to CIV-1499, as I propose to grant the Council's application (see (a)above). In all likelihood, CIV-137 will also be ready for trial well before CIV-36.Although CIV-137 does not yet have a hearing date, counsel for the trustees, Ms Low,thought it possible there could be a hearing of the matter before year end. Given thepleadings, and subject to Court availability, in my view that is realistic.[33] Secondly, WFL and the trustees are private litigants. They have no interest inMr Mawhinney's longstanding dispute with the Council regarding his proposal tosubdivide. I am not persuaded there is any good reason why they should be delayedbecause of that dispute, or that the dispute is even relevant. If it is relevant, there willbe scope, admittedly limited, for Mr Mawhinney and Sixty-Six to inform the trialJudge determining CIV-1499 and CIV-137.[34] The interests of justice require me to have regard to the trustees' position inCIV-137 and WFL's.[35] In support of the trustees' originating application, Mr Alderton swore anaffidavit on 25 October 2022. The trustees purchased the property in 1997 and, onMr Alderton's evidence, understood that in the fairly short-term they would be able toacquire the remaining 10 per cent that is now held by Sixty-Six. Some 26 years later,the ownership shares remain as they were at the outset.[36] Sixty-Six may have a different perspective on matters but, as I have said, thereis no affidavit evidence from its director or its shareholder. Moreover, Sixty-Six is nota party to CIV-36. Mr and Mrs Alderton, now in their 60s, are entitled to have aresolution of the issue they have put before the Court, so that they know where theystand and can structure their affairs accordingly.[37] As to WFL, it is seeking to dispose of its land but the evidence of its director,Mr Duncan, is the state of the title is a deterrent to purchasers. Mr Duncan's evidenceis that the Right and encumbrance bring no ongoing advantage to their holders. Therights and wrongs of that contention will be a matter for the imminent trial.[38] As to Mr Mawhinney's application to be joined to CIV-137, this too isdismissed. There is nothing to be gained by joining Mr Mawhinney. Sixty-Six iscapable of putting all relevant matters before the Court.[39] To conclude, I do not consider it necessary to make any order that mightinterfere with the prompt determination of CIV-1499 and CIV-137, and I am notpersuaded there is any disadvantage to Mr Mawhinney and Sixty-Six in keeping thevarious proceedings separate.[40] Accordingly, I decline the application referred to in (b) above.Council's application to strike out and dismiss[41] The grounds on which the Council relies in support of its application to strikeout and set aside are:(a) Mr Mawhinney is seeking to relitigate matters already determined;(b) The counterclaim/third party notice and application to consolidate arelikely to prejudice or delay the substantive claims;(c) The relief sought against the Council in the counterclaim in CIV-1449is not related to or connected with the original subject matter of theproceeding — see r 5.57.(d) The third party notice does not meet the criteria in r 4.4(1) and shouldbe set aside accordingly, pursuant to r 4.16.(e) The claim against the Council is frivolous, vexatious and an abuse ofprocess.[42] WFL abides the decision of the Court on the Council's application.Discussion[43] It is sufficient for me to address the grounds in [41](c) and (d) only, which inturn require consideration of rr 4.4, 4.16 and 5.57. These provide:4.4 Third parties(1) A defendant may issue a third party notice if the defendant claims anyor all of the following:(a) that the defendant is entitled to a contribution or an indemnityfrom a person who is not a party to the proceeding (a thirdparty):(b) that the defendant is entitled to relief or a remedy relating to,or connected with, the subject matter of the proceeding froma third party and the relief or remedy is substantially the sameas that claimed by the plaintiff against the defendant:(c) that a question or issue in the proceeding ought to bedetermined not only between the plaintiff and the defendantbut also between—(i) the plaintiff, the defendant, and the third party; or(ii) the defendant and the third party; or(iii) the plaintiff and the third party:(d) that there is a question or an issue between the defendant andthe third party relating to, or connected with, the subjectmatter of the proceeding that is substantially the same as aquestion or an issue arising between the plaintiff and thedefendant.(2) A third party notice must be issued within—(a) 10 working days after the expiry of the time for filing thedefendant's statement of defence; or(b) a longer time given by leave of the court.(3) A third party notice may be issued only with the leave of the court ifan application for judgment is pending under rule 12.2 or 12.3.4.16 Setting aside third party notice(1) A third party may apply to the court to have a third party notice issuedand served with the leave of the court set aside.(2) A party to a proceeding served with a third party notice issued andserved without leave of the court may apply to the court to have thenotice set aside.(3) In either case, the court may—(a) set the third party notice aside and dismiss the defendant'sstatement of claim against the third party—(i) on the merits; or(ii) without prejudice to the right of the defendant topursue that claim against the third party in anindependent proceeding; or(b) give other directions.5.57 Counterclaim against plaintiff and another person(1) A defendant who has a counterclaim against the plaintiff along withany other person (whether a party to the proceeding or not) for anyrelief relating to or connected with the original subject matter of theproceeding may, within the time allowed for filing a statement ofdefence, file a statement of the counterclaim and serve a copy on theplaintiff and that other person (to be referred to as a counterclaimdefendant)....(6) The court may at any time order that a counterclaim to whichsubclause (1) applies be struck out, upon such terms as it thinks just,if it appears—(a) that, by reason of the counterclaim, the plaintiff is likely to beunduly delayed in obtaining relief; or...(c) that the relief sought in the counterclaim is not related to orconnected with the original subject matter of the proceeding.[44] I propose to put to one side Ms Low's submission that WFL is not a party tothe counterclaim.Relief sought in the counterclaim[45] By their counterclaim, the defendants seek a declaration that Sixty-Six is a"co-owner" of the land in issue. Whether Sixty-Six is a co-owner of the land is not amatter in which the Council has any interest or on which it can make a meaningfulcontribution.[46] The defendants also seek a declaration and orders that the conditions arenullities and void; that Sixty-Six obtain a survey plan consistent with the consent tosubdivide; and orders consequent upon the deposit of that plan.[47] As Mr Waalkens for the Council submits, this relief is entirely unrelated to thesubject matter of WFL's proceeding. That there is such a relationship is required byboth r 5.57 in respect of a counterclaim and rr 4.4(1)(b) and (d) as regards the issue ofa third party notice. Nor are any of the other grounds on which a third party noticemay be issued satisfied, these being rr 4.4(1)(a) or (c).[48] It follows that the defendants' third party notice and counterclaim are outsidewhat is permitted by the High Court Rules 2016. Given that, I grant the Council'sapplication of 15 November 2022.Result[49] I grant Auckland Council's application of 15 November 2022 to set aside thecounterclaim/third party notice against it in CIV-1499.[50] I dismiss the defendants' (amended) application of 24 February 2023.Costs[51] The parties may file submissions on costs, not to exceed three pages in length,if they are unable to agree.Peters J