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Heather v Harikisun Brothers Limited [1997] CKNZCA 1; CA 2.1997 (17 December 1997)

IN THE COURT 0F APPEAL OF THE COOK ISLANDS
HELD AT AUCKLAND

C.A. 2/97

IN THE MATTER
of the land known as Kiri Part Section 88E Arorangi.

AND

IN THE MATTER
of an appeal against a decision of the High Court
dated 13 September 1996.

BETWEEN

NORRAINE (NO'O) HEATHER
of Arorangi, Businesswoman
Appellant

AND

HARIKISUN BROTHERS LIMITED & OTHERS
of Rarotonga Merchants.
Respondent

Coram: Sir Maurice Casey (Presiding)
Hillyer J
McHugh J

Hearing: 12 November 1997 at the High Court, Auckland

Counsel: Mr. M C Mitchell for the Appellant
Mr. R J Katz and Mrs. T P Browne for the Respondents

JUDGMENT OF COURT
Delivered by McHugh J

Solicitors:
For the Appellant: Stevenson Nelson and Mitchell, Rarotonga
For the Respondents: Clarkes, Rarotonga

1. INTRODUCTION

1.1 References

There is a lengthy record of proceedings filed. References to pages of this record will be abbreviated and shown herein in brackets e.g. (R110). The Cook Islands Act 1915 will also be referred to herein as "the 1915 Act".

1.2 Background

The appellant and her de facto husband operated a store in Arorangi and traded as "Raro Supersave" and also as "Pomani Noo Tangata". The appellant and her husband formed a Company for trading purposes but it is claimed by the respondents that the appellant did not disclose or hold out the existence of the Company to her trade creditors (R59). The store was located on land owned by the appellant, being an area of 2135m2 and being Part Kiri Section 88E Block, Arorangi (hereinafter called "the said land"). The business failed and the appellant became indebted in the sum of $105,774.93 plus interest thereon to four firms for goods and services supplied. The four creditors, who are the respondents in these proceedings, are Turners and Growers Fresh Limited; Harikisun Brothers Limited; Meateo Limited and Tiaki Wuatai. The respondents each obtained judgment in the High Court at Rarotonga against the appellant and then applied to the High Court under s 49 of the Judicature Act 1980-81 and Rules 247-251 of the Code of Civil Procedure 1981 for a charging order and order for sale of the said land. The application was successful and the orders sought were granted by the Court (Justice Dillon) on 13 September 1996 (R36-39).

This appeal emanates from that decision.

1.3 History of Land

On 20 February 1906, following an investigation of title, the land known as Kiri Section 88E, Arorangi District, comprising an area of 363 ars (9 acres 1 rood 2 perches) was vested in two native persons, Tavita Isaia and Willie Isaia. The land was leased to the Seventh Day Adventists Mission for 99 years from 1.1.1910 at a nominal rent. In 1916 an area of 2 acres was excluded from the lease and gifted to the Crown. The title register (R100) shows that on 26 April 1937 and 2 February 1943 succession orders issued vesting the respective interests of Willie and Davida Isaia, then deceased, in their successors. Further successions followed in 1946 and 1951 (R101).

On 28 February 1952 the whole block was taken by the Crown under s 357 of the 1915 Act for a public works site (R106). The lease to the Seventh Day Adventist Church was cancelled. On 22 April 1952 the High Court awarded compensation of £1034.14s.6d for the land taken (R102) and determined the relative interests of the then 21 beneficial owners.

The next important dealing took place on 3 May 1985 when by Deed of Transfer (R108) the Cook Islands Government Property Corporation, following a Cabinet Minute, transferred the said land, comprising 2135m2, to the appellant for the sum of one dollar. The deed recited that the appellant had paid in rental a sum more than the improved value of the said property. The title register (R100-105) does not disclose the existence of a lease to the appellant but presumably she was occupying the said land and the token payment of $1 allowed for rent paid by her to the Crown Corporation.

It should be noted here that the title register discloses that, notwithstanding Crown ownership of Section 88E and the transfer of the said land to the appellant, succession orders continued to be made in 1980, 1988, 1990 and 1993 (R102-105). Although no order determining relative interests has been made since 1952 when the land was taken, a calculation made from the title records reveals that as at 22 February 1993 there were some 125 beneficial owners in Section 88E of whom the appellant was one.

2. SYNOPSIS OF APPEAL

We shall examine shortly and in more detail the various grounds of appeal and the answer of the respondents thereto but it is convenient at this point to state the main issue to be addressed in this appeal. It relates to the validity or otherwise of the charging order made by the lower Court on 13 September 1996.

The Court decided that the said land was European land and therefore available for a charging order and order of sale to be imposed. The principal question to be answered in this appeal is whether the lower Court was correct in deciding the said land was "European land" and not "Native land". It is therefore a question of determining the land status or category of the said land.

The status issue is important because of the wording of s 49 of the Judicature Act 1980-81 and s 491 of the 1915 Act which govern exercise of the Court's jurisdiction to make charging orders and orders for sale against land for payment of debts.

Section 49/1980-81 provides:

"(1) Any judgment of the High Court in its civil jurisdiction for the payment of any sum of money may be enforced by a charging order made by the Court against any real or personal property of the person by whom the money is payable (including debts and other money due or accruing due to that person, but not including the interest of a Cook Islander in any native land). Any such charging order shall be made and have effect in a manner provided by rules of Court.

(2) In this section the term "Cook Islander" means a person belonging to the part of the Polynesian race indigenous to the Cook Islands; and includes any person descended from a Cook Islander." (Emphasis added)

Section 491/1915 states:

"(1) No interest of any person in customary land, and no interest of a Native or descendant of a Native in Native land, shall be capable of being taken in execution or otherwise rendered available by any form of judicial process for the payment of his debts or liabilities, whether in favour of Her Majesty or in favour of any other person.

(2) Nothing in this section shall affect the operation of any charge to which Native land is subject." (Emphasis added).

Native land would therefore appear to be unavailable for the imposition of charging orders for debts or money due nor available to be taken in execution by judicial process. It is important to note that s 49 of the Judicature Act 1980-81 excludes or protects from charging order any interests held by a "Cook Islander" who is defined in s 49(2) as a person of Polynesian blood or descent indigenous to the Cook Islands. However, the definition of "Native" in s 2 of the 1915 Act and as used in s 491 of that Act goes beyond the Cook Islands to embrace "Maoris and persons of any Polynesian race.

In the present proceedings the appellant claims the said land was "Native land" and the respondents argue the land was "European land".

At this point we need to look at the statutory definitions of the various classes or categories of land and persons and also amending legislation relating to those definitions.

3. DEFINITION OF TERMS AND STATUTORY AMENDMENTS

3.1 Definitions

Section 2 of the 1915 Act provides the following relevant definitions:

"Crown land" means any land which has not been alienated from the Crown for a subsisting estate in fee simple other than Native land (emphasis added).

"Customary land" means land which, being vested in the Crown, is held by Natives or the descendants of natives under the Native customs and usages of the Cook Islands.

"European" means any person whatever, other than a Native, and includes a body corporate.

"European land" means any land which has been alienated from the Crown for a subsisting estate in the fee simple other than Native land (emphasis added).

"Native" means a person belonging to any of the Polynesian races (including the Maori race) and includes a half-caste and a person intermediate in blood between a half-caste and a person of pure descent from any such race.

"Native land" means customary land or Native freehold land, as herein defined.

"Native freehold land" means land which is owned by a Native or a descendant of a Native for a beneficial estate in fee simple, whether legal or equitable.

Whilst setting out these statutory definitions, we should also refer to the definition of "Native freehold land" as it appeared in the 1915 Act prior to its amendment in 1950 to the present definition set out above. The original definition read as follows:

"Native freehold land" means land which, or any undivided share in which, is owned by a Native for a beneficial estate in fee simple, whether legal or equitable. Provided that -

(a) European land shall not be deemed to become or to have become Native land, but shall continue to be European land, although it, or an undivided share therein, becomes or has become (whether before or after the commencement of this Act) vested in any manner in a Native for an estate in fee simple.

(b) Crown land the fee simple whereof is or has been, whether before or after the commencement of this Act purchased from the Crown by a Native for a pecuniary consideration shall be deemed to be, and at all times thereafter to remain, European land and not Native land."

Section 11 of the Cook Islands Amendment Act 1950 No 92 (hereinafter called "the 1950 Amendment") inserted the words "or a descendant of a Native" after the words "owned by a Native". This of course widened the class of Native person from the narrower class of a person between pure and half-caste blood.

The amendment also repealed the proviso to the original definition. We shall shortly refer to the relevance of this 1950 Amendment in the present appeal.

There is one further statutory amendment to the 1915 Act namely the Cook Islands Amendment Act 1995-96, hereinafter called "the 1995-96 Amendment", which was legislated on 17 December 1996 and which, although enacted subsequent to the date of Crown transfer viz 13 September 1996 was referred to by both counsel and to which we shall also later advert. The amendment inserts a new s 358A into the 1915 Act as follows:

"358A Transfer of Crown land - Every transfer of Crown land for an estate in fee simple, after the commencement of this Act shall, on the date that the fee simple shall have vested or will vest in the transferee, be deemed to be Native freehold land".

We should perhaps comment that prior to the 1950 Amendment Crown land sold to a Native was deemed to be and to remain European land. The 1995/96 Amendment also seems to make it clear as to the status of Crown land transferred to any person after 19 December 1996. However, in this appeal we are concerned to ascertain the status of the said land in the period between 1950 and 19 December 1996, in particular on the 13 September 1996 when the lower Court exercised jurisdiction.

We shall now turn to counsels' submissions.

4. SUBMISSIONS ON BEHALF OF THE APPELLANT

The appellant presented two grounds of appeal.

1. That the lower Court erred in holding that the said land was "European land" and the orders made were therefore invalid and unenforceable.

2. That alternatively the sale by the Crown to the appellant was invalid in which case all subsequent dealings were invalid and unenforceable.

As to the first ground, counsel for the appellant submitted that the Act should be interpreted in a historical perspective taking into account the 1950 Amendment which widened the definition of "native" to include "a descendant of a Native" thus qualifying the appellant. And further that the 1950 Amendment in repealing the proviso clause in the definition of "Native freehold land" ended the need for any continuing use of the term "European land". Counsel argued that the said land and the appellant's status as a descendant of a Native brought both the said land and the appellant within the definition of "Native freehold land" and thus entitled to the exempting clause in s 49 of the Judicature Act 1980-81 and s 491 of the said Act. Counsel submitted that the 1995-96 Amendment was declaratory of the existing state of affairs namely, that in cases where the Crown took Native freehold land for a public purpose and subsequently disposed of part of it to a descendant of a Native, the status of the land did not change and remained Native freehold land.

As an alternative ground, Counsel submitted that the whole of Part X of the Act, which relates to Crown land and the taking of land for public purposes, precluded the disposal of the fee simple of land by using a deed of transfer procedure. Counsel submitted that the action of the Crown, in transferring portion of the land taken to one owner, established a preferential system which denied rights to other beneficial owners and members of the wider family. Counsel stressed that the action of the Crown subverted the whole purpose of the said Act and that the proper procedure for dealing with land surplus to public requirements was to enact legislation.

5. SUBMISSIONS OF RESPONDENTS

Counsel for the respondents raised as a preliminary point that the charging order made by the Court on 13 September 1996 was made by consent and an Appeal Court should be slow to overturn a consent order. In addressing the appellant's contention that the said land was Native freehold land, counsel advanced several points in support of the respondents' argument that the land was not Native freehold land but European land. These points were as follows:

Firstly: the status of the land prior to acquisition was irrelevant and compulsory acquisition by the Crown, by virtue of s 357 of the 1915 Act, vested the said land in the Crown free from any rights or interest that the former owners might have had. The land upon acquisition became Crown land.

Secondly: the status of the land did not depend upon the status of the transferee. Counsel submitted that the legislature never intended that the status of the land should depend upon the transferee's status and referred to s 444 of the 1915 Act as reinforcing the interpretation that status or ethnic origins of the transferee were irrelevant.

Thirdly: The said land upon transfer ceased to be Crown land. It was not in any sense customary land. If it was originally Native freehold land, it lost that status upon acquisition by the Crown and as it was neither "Crown land" nor "Native freehold land", the land must be "European land". As an additional argument, counsel submitted that the vesting of the land after acquisition in the Cook Islands Government Property Corporation, constituted the land as "European land" at that point. The subsequent transfer to the appellant was therefore of "European land". It therefore had the status of European land after transfer.

Fourthly: The 1995-96 Amendment was not retrospective. Counsel gave references to Hansard debate and submitted this showed the legislation was not intended to be retrospective. Counsel said it could be interpreted as indicating the legislature had enacted the amendment to correct an omission in the 1915 Act rather than as declaratory of the existing law.

Counsel for the respondents strongly rejected the second and alternative ground of the appellant that the transfer of the said land to the appellant was invalid and argued that the clear unequivocal words of s 357 of the 1915 Act, together with the provisions of the Cook Islands Government Property Corporation Act 1969, gave the corporation wide power to sell, transfer, or dispose of property. Counsel further submitted that the procedures for disposal as set out in s 10 of the 1969 Act had been followed. Counsel asserted it was not open to the appellant to attack the validity of the transfer to her nor did the Courts have power to review an executive decision.

6. REVIEW OF GROUNDS AND SUBMISSIONS

Before considering the main issue as to the status of the said land, there are two matters raised by counsel for the respondents which need attention. These relate firstly to the assertion that the charging order, which is now under attack by the appellant, was made with the consent of the appellant and should not now be disturbed. Secondly, that there was no evidence the appellant was a native within the statutory definition of "Native".

Counsel for the appellant did not address the "consent" issue during this appeal but the matter was raised in earlier proceedings before the Chief Justice when a rehearing and stay of proceedings were sought. Although the record of proceedings filed on appeal does not contain a transcript of proceedings before the lower Court when the charging order issued the submissions subsequently filed by counsel for the appellant (R50-54) and counsel for the respondent (R57-62) on the rehearing application are sufficient for this "consent" issue to be resolved.

We are satisfied that the appellant did not have proper legal representation or advice on the issue of whether the said land was "Native freehold land" or "European land". The Solicitor-General was appointed by the Court to assist the Court on the status issue as amicus curiae but the appellant appeared in person without her own counsel and did not address the Court on this relevant and important question. Further, the submission made on behalf of the present respondents indicates that the appellant's consent was conditional upon a guaranteed minimum price being fixed for the sale of the said land - a condition the respondents would not agree to (R60). As was fairly and properly put to us by counsel for the respondents, the Court can set aside a consent order if justice so requires. We consider there are sufficient grounds to do so and find that the qualified consent given by the appellant was not sufficient of itself to bind the appellant.

The second question as to whether the appellant was a "native" with the statutory definition of that term needs only brief attention. The title register for Kiri Section 88E (R102) shows that the appellant succeeded her father on 25 May 1987 and reference back through earlier successions trace her genealogy to Willie Isaia who was one of the two original owners. The appellant is a descendant of a native for the purposes of these proceedings. It is also noted that the respondents have also acknowledged the appellant falls within the statutory definition. (R96 and R98) We find that the appellant comes within the statutory requirement, being a descendant of a native.

We turn now to the principal issue of status and the question of whether the said land was "European land" or "Native freehold" land on 13 September 1996.

There is no disagreement between the parties that the freehold order made on 20 February 1906 following investigation of title changed the status of Kiri Section 88E from customary land vested in the Crown to Native freehold land. Section 424 of the said Act spells out that change in status and also records that the persons named in the order held the land for a legal estate in fee simple in possession.

As we have seen (supra) (para 1.3) section 88E was taken by the Crown by warrant on 28 February 1952 for public works. Section 357 of the 1915 Act provides that the land thereupon becomes absolutely vested in the Crown free from all estates, rights and interests of any other person. Pursuant to s 5 of the Cook Islands Government Property Corporation Act 1969, the said land became vested by operation of law in the Property Corporation without any formal transfer from Her Majesty. Section 8 of the same Act declares the Corporation to be an instrument of the Executive Government and a Government department within the meaning of the Crown Proceedings Act 1950.

The respondents claimed that Section 88 became Crown land upon acquisition by the Crown and remained Crown land consequent upon its transfer to the Property Corporation. As an alternative argument the respondents have also asserted that perhaps Section 88 upon being transferred to the Government Property Corporation became European land at that point and retained that status when later a portion of the land was transferred to the appellant. This submission that the said land became European land upon transfer to the Property Corporation would seem to run counter to the respondent's earlier argument that the status of the land does not depend upon the status of the transferee.

Whether the said land was "Crown land" or "European land" or "Native freehold land" whilst title was vested in the Crown Corporation, it is the status of the land after transfer from the Crown and at the time the charging order was sought, that is the crucial issue in these proceedings. The appellant claims that the said land was "Native freehold land" because the land fell clearly within the statutory definition of that term when ownership passed to the appellant. The respondents assert that the appellant's argument requires the Court to find that the land acquired a status dependent upon the ethnic origin of the transferee. Counsel for the respondents submitted that as the s 2 definition of "Native" included persons of any Polynesian race, including Maoris, application of the appellant's argument would create an absurd situation which the Legislature could never had intended.

We should interpolate here that there is a distinction in definition between a "Cook Islander" as defined in s 49(2) of the Judicature Act 1980-81 and "Native" as defined in s 2 of the 1915 Act. This distinction was not raised by either counsel before us. Counsel for the respondent used the s 2 definition of "Native" to argue the unacceptability of status based on the transferee's ethnic origin. However, s 49 of the Judicature Act refers to the term "Cook Islander" and not "Native" and it is s 49 that gives the Court power to make a charging order. As set out in s 49 supra, "Cook Islander" means a person belonging to or descending from that part of the Polynesian race indigenous to the Cook Islands. We have already found that the appellant was a descendant of a native as that term is used in s 491 of the 1915 Act. Although no argument was presented to us, it is of some importance to determine whether the appellant also falls within the definition of a Cook Islander. The appellant's genealogical tree, as a result of tracing back succession from the title orders (R100-103), locates the appellant as a great grandchild of Willie Isaia. Section 421 of the 1915 Act sets out the law relating to investigation of customary title and s 422 the requirement of the Court to determine interests in customary land according to the ancient custom and usage of the "Natives of the Cook Island". When the Court made its order in 1906, it would have determined that Willie Isaia was entitled to a freehold interest as a native or descendant of a native of the Cook Islands.

We are accordingly of the view that the appellant by virtue of succession falls within the status of a Cook Islander. In any event s 491 of the 1915 Act provides sufficient jurisdiction for the purpose of determining the issue presently before this Court.

We have carefully considered the excellent submissions made by both counsel. We have difficulty in accepting that the transfer of land out of Crown ownership changed the status of the land from "Crown land" to "European land" Although the words "other than Native land" as they appear in the definition of "European land" are difficult to interpret with precision, they could be construed as meaning that "Native freehold land" as also defined in s 2 is excluded from the definition. As a result European status may be limited to land owned by persons outside the class included in the "Native freehold land" class of person.

We prefer, however, to rely upon the unequivocal and straight forward definition of "Native freehold land" which provides no such difficulty as the definitions of "Crown land" and "European land" raise as a result of the inclusion of the words "other than Native lands". The definition of "Native freehold land" fits exactly the position of the appellant and the land itself at the time the appellant acquired a fee simple title in 1985 and also on 13 September 1996 when the charge was imposed. Application of the literal rule of construction adopted by the Courts requires that plain meaning be given to the words of a section when applied strictly to the circumstances falling within that meaning. We are aware of the need for caution in construing status of land by use of the interpretation provisions of an Act. Indeed this point was properly raised before the lower Court in submissions presented by the Solicitor-General (R83). In these proceedings however we are dealing with the term "native land" as it appears in both s 49 of the Judicature Act 1980-1981 and s 491 of the 1915 Act. These two sections are crucial to the validity or otherwise of the orders made by the lower Court. We consider we are entitled to go to the s 2 Interpretation clause, and indeed must do so, to interpret properly what the respective sections mean.

We are also helped considerably in the view we have taken that the said land is Native freehold land by the well established policy of the Legislature as embodied in the 1915 Act and its later amendments to preserve and protect Native lands from erosion by alienation or Crown acquisition. The whole tenor of the land legislation is directed to this end. The 1950 Amendment was enacted to remove law which allowed land sold by the Crown to a native to remain European land. The Hansard report of debate on the 1950 Bill which was presented by counsel for the appellant as part of his submission spelt out the policy of the government to discourage alienation and to widen the definition of "Native freehold land". Although the definition of "native" in Section 2 extends the qualifying class to wider Polynesia, the important matter to bear in mind is that the land has the status of Native freehold land and remains subject to the 1915 Act. The later amendment in 1996 is also a further indication of Government policy to hold fast to and even seek to recover native land holdings.

Having found that the said land is "Native freehold land" on the interpretation of s 49 (1980-81) and 491 (1915) assisted by s 2 (1915), there is no need to consider the alternative argument of the appellant that the status of Section 88E remained "Native freehold land" throughout the period of Crown ownership. An argument in support of that contention may or may not be sustainable but we make no finding thereon. Similarly we have no reason to address the alternate argument of the appellant that the 1985 transfer was void. Strong submissions opposing this ground were presented by counsel for the respondents who raised a stricture concerning possible conflict with an Executive decision. This issue was not raised before the lower Court. We have no need to deal with it further.

7. CONCLUSION

1. It is the finding of this Court that the said land, Part Kiri Section 88E comprising 2135m2, at the time orders were made on 13 September 1996, was "Native land" and as such was not available under s 49 of the Judicature Act 1980-81 and s 491 of the Cook Islands Act 1915 to be charged or taken in execution for payment of debts due by the appellant.

2 There is an order under section 56 of the Judicature Act 1980-81 reversing the judgment of the High Court given on 13 September 1996 and setting aside the charging order and order or sale made by that Court.

3 There is a further order under section 23 awarding costs of $5000 against the respondents in favour of the appellant.

4 There is a direction to the Registrar that the sum of $5000 held by the Registrar as security be refunded to the appellant such sum to be paid to the appellant's solicitors Stevenson, Nelson and Mitchell, Rarotonga, whose receipt shall be a sufficient discharge to the Registrar.

This decision is delivered by the undersigned on behalf of the Court hearing this appeal.

Dated this 17th day of December 1997.

A G McHugh