29 Te Waipounamu MB 48
IN THE MĀORI LAND COURT OF NEW ZEALAND
TE WAIPOUNAMU DISTRICT
A20130011189
UNDER
Section 20, Te Ture Whenua Māori Act 1993
IN THE MATTER OF
Part Section 3 Block XIII Tautuku Survey
District, Section 15 Block XIII Tautuku Survey
District, Section 6A Block XIII Tautuku Survey
District, Section 2 Block XIV Tautuku Survey
District, Section 14 Block XIII Tautuku Survey
District – Recovery of Māori Freehold Land
BETWEEN
TRUSTEES IN THE SECTION 14 BLOCK
XIII TAUTUKU TRUST, SECTION 15
BLOCK XIII TAUTUKU TRUST, SECTION 2
BLOCK XIV TAUTUKU TRUST, SECTION 3
BLOCK XIII TAUTUKU TRUST, and
SECTION 6A BLOCK XIII TAUTUKU TRUST
Applicants
AND
ELIZABETH PATRINE CAIRNS and
RICHARD DAVIS CAIRNS
Respondents
Hearing:
7 July 2014
(Heard at Invercargill)
Appearances:
J P Forsey for the applicants
Respondents in person
Judgment:
16 March 2015
RESERVED JUDGMENT OF JUDGE S F REEVES
Copies to: Jonathan Forsey, Duncan Cotterill, PO Box 5, Christchurch, [email protected]
Rex Chapman, Cruickshank Pryde, PO Box 857, Invercargill, [email protected]
Elizabeth and Richard Cairns
29 Te Waipounamu MB 49
Introduction
[1]
This application concerns several Tautuku ahu whenua trusts seeking orders
pursuant to s 20 Te Ture Whenua Māori Act 1993 (TTWMA) for recovery of lands leased
to the respondents Elizabeth and Richard Cairns.
[2]
The applicants who are trustees of the blocks involved say that the lease entered
into including the renewal period has now ended, and they have not consented to further
renewal or a periodic lease. They now seek recovery of the lands.
[3]
The Cairnses’ position is that they are entitled under the lease to further renewal
periods and they wish to exercise this right and remain in occupation of the blocks.
The blocks subject to this application
[4]
The blocks that are the subject of this application, are known as the Heads Block,
the Hayes Block and Yorkes Block, and are located in the Catlins area of South Otago.
[5]
The Heads Block consists of three sections of land: Section 14 Block XIII Tautuku
Survey District, Section 15 Block XIII Tautuku Survey District, and Section 2 Block XIV
Tautuku Survey District. These blocks are Māori freehold land. Each block is subject to an
ahu whenua trust bearing the same name as the block.
[6]
The Hayes Block consists of Part Section 3 Block XIII Tautuku Survey District,
and Yorkes Block consists of Section 6A Block XIII Tautuku Survey District. These two
blocks have the status of General land, and are administered by the Tautuku Waikawa
Lands Trust.
[7]
From 1999-2003, the Heads Block was leased by Richard and Elizabeth Cairns on
an informal basis. In 2003 the Cairnses entered two formal lease agreements to lease the
Heads Block and the Hayes Block from the relevant trusts. The Yorkes Block was later
incorporated into the Hayes Block lease and rent payments were adjusted accordingly.
29 Te Waipounamu MB 50
[8]
It appears that both leases were initially for a period of five years, contained a right
of renewal clause, and had a renewal period of five years. Although there is some
disagreement regarding the process followed to bring the renewal period into effect, it
appears that the right of renewal was exercised in relation to both leases with the renewal
period ending on 31 October 2013.
[9]
Subsequently, the Cairnses have attempted to renew the leases a second time.
However, the applicants have declined to grant any further rights of renewal and do not
consent to a periodic tenancy. They claim that the Cairnses are not entitled to continue to
occupy the property and do so without right, title or licence.
[10]
At the hearing on 7 July 2014 all evidence was presented by affidavit and oral
submissions were made. I granted leave for the Cairnses to respond in writing to legal
submissions made by the applicants, with a subsequent right of reply to the applicants.
Background
The Leases
[11]
There are two lease agreements in place between the Cairnses and the relevant
trusts. Richard Manning, as an authorised agent and approved signatory for the trustees of
the sections involved, entered into a formal lease agreement with the Cairnses in respect of
the Heads Block. Mahara Te Aika, as a trustee for the Hayes and Yorkes Blocks, appears to
have signed the lease agreement for the Hayes Block.
[12]
The central issue in this application is that the parties do not agree which
documents correctly reflect the agreements to lease. Multiple versions of both the Heads
Block lease and the Hayes Block lease have been submitted with the parties’ affidavits.
[13]
The most significant difference for the purposes of these proceedings is the form of
the right of renewal clause included in each lease. However, there are also other differences
between the submitted versions, such as the inclusion of a provision for the payment of
rates and a termination clause.
29 Te Waipounamu MB 51
The previous hearing
[14]
In 2010 the Heads Block lease was the subject of a hearing in the Māori Land Court
before Judge Coxhead.1 In that hearing, the issue for the Court was whether the Cairnses
had fulfilled their obligations to undertake improvements to the property in lieu of payment
of rent.
[15]
Whereas the form of the right of renewal clause was not specifically at issue in that
case, in reaching its conclusion, the Court identified and considered the lease document
and the construction of the terms that related to payment of rent.
[16]
There are statements regarding the terms of the lease (including the right of renewal
clause) recorded in the evidence of the parties, the transcript of the hearing, and the
decision itself. Included in the Court record is the signed affidavit of Elizabeth Cairns
which identifies the version of the lease before the Court as correctly representing the lease
agreement for the Heads Block.
[17]
In the subsequent 2012 judgment, in discussing the lease Judge Coxhead stated:2
As noted, the Cairns have occupied the trust lands since 1999. At first this was
pursuant to an informal agreement with the trustees. In November 2003, a formal
lease was entered into by Richard Manning, on behalf of Tautuku Waikawa Lands
Trust (as it was then), and Richard and Elizabeth Cairns. The lease was for a term
of five years and contained a right of renewal. It was renewed by the respondents
for a period of five years through to November 2013.
Submissions of the applicants
[18]
Mr Forsey for the applicants submitted that the correct version of the Heads Block
lease is the document referred to in the 2012 decision. In these proceedings this document
was identified as exhibit “GN2” to Graham Nutira’s affidavit of 27 June 2014. The relevant
clauses from this document are as follows:
SCHEDULE
[…]
Renewal Period
1
2
5 years
5 Te Waipounamu MB 298 (5 TWP 298).
Tautuku Block XIII Section 14 Trust, Tautuku Block XIII Section 15 Trust and Tautuku Block XIV Section 2
Trust v Cairns (2012) 16 Te Waipounamu MB 63 (16 TWP 63) at [14].
29 Te Waipounamu MB 52
[…]
TERMS AND CONDITIONS
[…]
RIGHT OF RENEWAL
5.1 If the Lessee had first fulfilled the Lessee’s obligations under the Lease the
Lessee will have the right to renew it for the Renewal Period.
The Lessee must give the Lessor written notice of intention to renew at least 2
months before the end date.
[…]
[19]
It is submitted that the correct version of the lease contains a term of five years with
a commencement date of November 2003 and a right to renew the lease for a single
renewal period of five years, expiring on 31 October 2013.
[20]
Counsel relies on the principle of res judicata as set out by the High Court in May v
May,3 and submits that because the Heads Block lease has already been considered by the
Māori Land Court and the correct lease document identified, that matter cannot be relitigated before this Court.
[21]
Counsel submits that the finding as to the terms of the Heads Block lease is binding
on the Cairnses and they are prevented from putting forward a different version of the lease
to that which they accepted as the proper version at the earlier hearing.
[22]
The applicants also point out that Elizabeth Cairns previously provided a sworn
affidavit identifying this version of the Heads Block lease as being correct. The version
submitted by the respondents during the current proceedings is materially different from
the lease previously accepted by them.
[23]
It is therefore submitted that the document exhibited as “A” to Elizabeth Cairns’
affidavit is not the correct lease document in respect of the Heads Block, that it is
misleading, and that no weight can be placed on it.
3
May v May HC Hamilton FP312/91, 17 July 1991.
29 Te Waipounamu MB 53
[24]
In response to the Cairnses’ subsequent written submissions, counsel for the
applicants does not accept that the finding in the previous hearing was merely part of the
narrative, and says it was an implicitly necessary part of the determination. Furthermore,
he submits the principle in Henderson v Henderson applies, which operates to prevent a
litigant from raising an issue or defence which could have been raised in previous
proceedings between the parties, relating to the same issues, but was not.4
[25]
In relation to the Hayes Block lease, the applicants submit that the document
attached as exhibit “F” to Mr Nutira’s affidavit of 19 December 2013 correctly reflects the
agreement between the parties. The right of renewal clause in this document is similar to
that contained in the Heads Block lease set out above at paragraph [18]. In support of this
submission, the applicants refer to handwritten notes by Mahara Te Aika made during the
process of drafting the lease which confirm a five year term plus a single five year renewal
was intended for the Hayes Block lease.
[26]
Regarding the Cairnses’ submission that a 15-20 year lease was intended, the
applicants submit there was no reference in any of the lease documents to a lease of this
duration. In her affidavit, Mahara Te Aika has rejected the proposition that a lease for this
duration was intended and she states that she had made it clear to the Cairnses that it was
not a lease in perpetuity. Furthermore, at the earlier hearing the Cairnses did not suggest
that the lease was for a 15-20 year period.
[27]
In summary, the applicants submit that the leases before the Court clearly record
that the term of the leases for the Heads and Hayes/Yorkes blocks was for five years plus a
five year renewal period and no further right of renewal. The terms of the leases have now
expired and the applicants are entitled to an order that the respondents vacate the leased
land without further delay.
Submissions of the respondents
[28]
The Cairnses submitted in response that the version of the Heads Block lease
identified by the applicants is not correct, and that the agreed form of the lease allows for
multiple renewal terms. The Cairnses submitted it was their understanding of the lease
4
Henderson v Henderson (1843) 3 Hare 100, 67 ER 313.
29 Te Waipounamu MB 54
term that they would have the right to renew the lease for successive terms of five years for
at least a term of between 15 and 25 years in order that they may make a return on the
capital sums they had spent on the property.
[29]
It was submitted that the correct form of the lease contains the following right of
renewal clause. This document was identified as exhibit “A” to the affidavit of Elizabeth
Cairns dated 17 June 2014. The clause states:
[…]
RIGHT OF RENEWAL
5.1 If the Lessee has first fulfilled the Lessee’s obligations under the Lease
The Lessee will have the right to renew it for further Terms.
The Lessess [sic] must give the Lessor written notice of intention to renew at least
2 monthe [sic] before the end date….4 years and ten months from the start date of
November 2003.
[…]
[30]
This right of renewal clause is also included in the document which the respondents
have submitted as being the correct lease for the Hayes and Yorkes blocks. Elizabeth
Cairns states that this version is consistent with their agreement with the trustees that they
would have more than one right of renewal.
[31]
Elizabeth Cairns states that there was no doubt that in all of the discussions with the
trustees that the intention of the parties was to have a long term lease. In support of this
position, the respondents refer to a letter written by Richard Cairns in 2002 which refers to
a right of renewal period of at least 15 to 20 years. Also a letter from Richard Manning,
written in 2002, is referred to in which Mr Manning states that he is “comfortable with a
long term lease”.
[32]
The Cairnses made further written submissions in response to the argument that
they are estopped from bringing an action in relation to the Heads Block lease regarding
the terms of the lease based on the application of res judicata.
[33]
It was submitted that res judicata cannot apply in this case because the claim in the
previous hearing was different – that the Cairnses were in breach of the lease agreement
29 Te Waipounamu MB 55
regarding rental payments. The issue in the current proceedings is the term of the lease, and
rights of renewal and expiry.
[34]
It was also submitted that the description of the lease included in the 2012 decision
was part of the narrative of that decision and did not constitute a determination as to the
terms of the lease. The terms of the lease were not at issue in the earlier proceedings and
the Court did not have to make a decision on it. Applying the tests for establishing res
judicata as set out in May v May,5 the requirement that the previous judicial decision
involved a determination of the same question is not met in this case.
The Law
[35]
Section 20 of TTWMA provides:
20 Jurisdiction in actions for recovery of land
Notwithstanding anything to the contrary in the District Courts Act 1947, the Court
shall have jurisdiction to hear and determine any proceeding for the recovery of
Maori freehold land in the following cases:
(a)
Where—
(i)
The term and interest of the lessee of any Maori freehold land has
ended or been terminated, either by the lessor or by the lessee, and
whether the lessee is or is not liable for the payment of any rent;
and
(ii)
The lessee or any other person in occupation of the land or part of
the land neglects or refuses to quit and deliver up possession of the
land:
[…]
(d)
Where any person without right, title, or licence is in possession of any
Maori freehold land.
Discussion
Jurisdiction
[36]
Section 20 of TTWMA provides the Māori Land Court with jurisdiction in certain
circumstances to hear and determine any proceeding for the recovery of Māori freehold
5
May v May, above n 3.
29 Te Waipounamu MB 56
land. This explicit reference to Māori freehold land and the repeated references in the s 20
subsections suggest that under this section, jurisdiction does not extend to General land.
Neither does the case law demonstrate the application of this section to land other than
Māori freehold land.6
[37]
Given that the Hayes and Yorkes blocks are not Māori freehold land but have the
status of General land, I consider that this Court does not have jurisdiction to hear and
determine proceedings for the recovery of these blocks under s 20. This decision will
therefore consider the application for recovery of land only in respect of the Heads Block
which is Māori freehold land.
Res judicata
[38]
The applicants have submitted that the principle of res judicata applies to prevent
the respondents from claiming that the correct version of the Heads Block lease is other
than that previously before the Court in the 2010 proceedings. This principle means that
the merits of a decision cannot be disputed in subsequent litigation.7 It is the respondents’
position that the question before the Court in this case is different from that of the previous
proceedings and that the principle of res judicata does not apply.
[39]
The applicants have referred to May v May,8 and the principle in Henderson v
Henderson,9 in support of their argument. Res judicata, often also referred to as “cause of
action estoppel,” requires that the cause of action sought to be estopped must be exactly the
same as that adjudicated in previous proceedings.10
[40]
That is not the position here as the previous proceedings concerned breach of lease
for failure to pay rental, as opposed to the right of renewal. But both proceedings have
involved the interpretation of the terms of the lease, and it was necessary for the Court to
identify the lease agreement in question. In these circumstances an “issue estoppel” has
arisen. This concerns the prior resolution of issues in a proceeding and does not require
6
For example see Henry v Wood – Part Whakanekeneke 1B (2014) 85 Taitokerau MB 175 (85 TTK 175);
and Ross v Te Moni – Otumoko B4 (2010) 2 Waikato Maniapoto MB 243 (2 WMN 243).
7
Laws of New Zealand Estoppel (online ed) at [2].
8
May v May, above n 3.
9
Henderson v Henderson, above n 4.
10
Joseph Lynch Land Co Ltd v Lynch [1995] 1 NZLR 37 (CA) at 40-41.
29 Te Waipounamu MB 57
that the causes of action be the same.11 The principle underlying issue estoppel was stated
in Blair v Curran:12
A judicial determination directly involving an issue of fact disposes once for all of the
issue, so that it cannot afterwards be raised between the same parties or their privies.
[41]
While the cause of action before the Court is different from that in 2010, there is a
fundamental connection in that the terms of the lease were integral to both sets of
proceedings. The 2012 decision required the Court to consider the terms of the lease and in
doing so, it was necessary as a matter of fact to identify the lease document that
represented the agreement between the parties.
[42]
To now accept in this case that the right of renewal clause contained within that
document is incorrect and that the document does not represent the Heads Block lease
agreement, would raise a serious challenge to the integrity of the previous decision.
[43]
Because the terms of the lease are fundamental to both decisions, I consider that the
Cairnses are prevented from submitting that a different version of the lease is correct on the
basis of issue estoppel.
[44]
Furthermore, I consider that during the previous hearing the respondents had
sufficient opportunity to raise any issues regarding the form of the right of renewal clause
or to clarify its meaning. This is because as recorded in the transcript of that hearing, the
right of renewal clause was discussed during the hearing and the respondents stated that
they understood that the lease would end in three years’ time.13
[45]
I am therefore of the opinion that, as submitted by the applicants, the principle in
Henderson v Henderson would also apply in this case and operate to preclude the
respondents from claiming that the right of renewal clause is other than previously
submitted.
11
Joseph Lynch Land Co Ltd v Lynch, above n 10, at 41.
Blair v Curran (1939) 62 CLR 464 at 531.
13
5 Te Waipounamu MB 298 (5 TWP 298) at 302.
12
29 Te Waipounamu MB 58
Reference to the Court record
[46]
It is well established that this Court is entitled to rely on its own knowledge of
lands and owners and on the court record as gleaned from earlier proceedings.14
[47]
My review of the Court record of the previous proceeding establishes that the
Cairnses previously gave evidence to the Court about the lease document representing the
agreement between the parties which directly contradicts their evidence in this proceeding.
[48]
In my view this raises an issue of credibility in relation to the evidence they have
given about the lease agreement in the present proceedings, and in my assessment the
earlier evidence is more reliable and therefore to be preferred.
Right of renewal
[49]
The task of this Court is therefore to interpret the right of renewal clause contained
in the Heads Block lease as previously relied on by this Court and as quoted at paragraph
[18] above.
[50]
As stated in the Laws of New Zealand, the intention for a lease to be perpetually
renewable must be made clear.15 Generally, even a statement that a grant of a new lease
that contains the same covenants as the current lease does not entitle the tenant to a
perpetually renewable lease.16
[51]
By contrast, an example of a clause found to confer a perpetual right to renew was
set out in Caerphilly Concrete Products Ltd v Owen.17 In that case, the right of renewal
clause provided that:18
… the landlord will on written request of the tenant made six months before the
expiration of the term … grant to him a lease of the said demised land for a further
term of five years from the expiration of the said term hereby granted at the same
rent and containing the like covenants and provisos as are herein contained
14
Biel v Hall – Opepe Farm Trust [2011] Māori Appellate Court MB 535 (2011 APPEAL 535); Murupenga
– Re Proprietors of Te Hapua 42 Incorporation (1972) 2 Taitokerau Appellate MB 72 (2 APWH 71).
15
Laws of New Zealand Lessor and Lessee (Reissue 1) (online ed) at [80].
16
Laws of New Zealand, above n 15, at [78].
17
Caerphilly Concrete Products Ltd v Owen [1972] 1 WLR 372 (CA).
18
At 373.
29 Te Waipounamu MB 59
(including an option to renew such lease for a further term of five years at the
expiration thereof) …
[52]
Clearly, the renewal clause in the Heads Block lease falls short of the express
statement required to create a perpetually renewable right to renew as it simply states that
the “Lessee will have the right to renew it for the Renewal Period”. In Wilson v Holland
the High Court did not accept that a perpetual right to renew had been created where the
renewal clause provided:19
[…]
(c) Right of renewal: A further term of 3 years to be exercised by notice in
writing at least two months prior to the expiration of the term hereby created.
[…]
Result
[53]
I agree with the applicants that the right of renewal clause in the Heads Block lease
provides for a single renewal period of five years. As this right has been exercised, the
renewal period has ended, and the trustees have not consented to a further renewal or a
periodic lease. I accordingly conclude that the Cairnses are in possession of the Heads
Block lands without right, title or licence.
[54]
However, for completeness I also consider the alternate form of the right of renewal
clause submitted by the Cairnses that provides for “renewal terms” rather than a renewal
“term”. It is the Cairnses’ position that the wording and the intention of the parties operate
to create a right to multiple renewal periods – essentially a perpetual right of renewal. As
discussed above, a very clear expression of intention to create a perpetual right to renew is
required. It seems unlikely in this case that a reference to “terms” would be sufficient to
meet this threshold.
[55]
I also note that given that the Cairnses have occupied the block since 1999, at the
time of this application they would have been in occupation for around 14 years and that in
any event, this is close to their expressed intention as to term of occupation.
19
Wilson v Holland HC Tauranga CP32/95, 1 April 1996 at 3.
29 Te Waipounamu MB 60
[56]
I therefore conclude that even if the alternate form of renewal clause as submitted
by the respondents had been accepted, that it could not be construed as conferring a
perpetual right to renew.
Conclusion
[57]
I determine that the applicants are entitled to possession of the Māori freehold land
known as the Heads Block under s 20 of TTWMA.
[58]
The applications in relation to the Hayes Block and the Yorkes Block fail through
lack of jurisdiction and are dismissed.
[59]
The parties are invited to make further submissions on whether it is necessary for
an injunction to be issued under s 19 of TTWMA in order for the trustees to recover the
Heads Block lands.
[60]
Costs are reserved.
Pronounced in open Court at 10am in Invercargill on the 16th day of March 2015.
SF Reeves
JUDGE