Ihaka v Nicholas [1985] CKCA 3; CA 04.1985 (14 October 1985)

IN THE COURT OF APPEAL OF THE COOK ISLANDS
HELD AT RAROTONGA
CA. 4/85

IN THE MATTER
of section 50 of the Cook Islands Amendment Act 1946

AND

IN THE MATTER
of the land known as RUAPUAUTU SECTION 105C, AVARUA

BETWEEN

ITINGA IHAKA
a landowner of Rarotonga
APPELLANT

AND

TEREPUAPII NICHOLAS and
AKAITI NICHOLAS
both of Rarotonga
RESPONDENTS

Coram: Sir Thaddeus McCarthy (presiding)
McMullin J.
Sir Clinton Roper

Counsel: Mrs T.P. Browne for appellant
Mr J.G. McFadzean for respondents

Hearing: 27 August 1985
Judgment: 14 October 1985

JUDGMENT OF THE COURT DELIVERED BY McMULLIN J

This appeal is brought from a judgment of Dillon J given in the High Court on 18 March 1985 granting an Occupation Right to the respondents and dismissing the appellant's application for a like right.

The history of the two applications can, for the purposes of this appeal, be stated quite briefly. On 30 September 1982 the appellant applied for an Occupation Right over an area of 1045 sq.m. being part Puapuautu Section 105C, Avarua. In support of her application she filed a form of consent to the granting of the right and signed by a number of owners holding shares in the land. On 22 April 1983 when her application came before the Court for hearing it was adjourned to enable certain questions as to the rights of the two of the signatories to the consent who signed it on behalf of their respective families to be clarified. On 21 March 1984 the application again came before the Court. The applicant then gave evidence herself. She was aged 63 and had been living in New Zealand for the previous 41 years, returning to Rarotonga every three years for a visit. She now wished to build on the site. One of the respondents, Terepuapii Nicholas, objected to the grant. He himself had filed an application for an Occupation Right on 21 March 1984 over the same piece of land and claimed to have the approval of the majority of the owners. The appellant herself produced a second form of consent. This contained the names of some of the owners now residing in New Zealand. The hearing was adjourned. In an endeavour to settle the matter counsel agreed on 5 October 1984 that the owners should have a further meeting at which counsel should not attend, and that whoever had the support of the majority of the owners at that meeting would be entitled to the grant of the Occupation Right for the site. Notice of the meeting was given to all the owners of Puapuautu Section 105C, Avarua, living on Rarotonga. The notice calling the meeting said:

The purpose of the meeting is to decide whether an occupation right is to be given to Tere and Akaiti Nicholas or Itinga Ihaka, because both have an application for the same section of land in Court on Tuesday 9^th October 1984.

This meeting was held on 8 October 1984. At it the appellant obtained the backing of owners holding a majority of shares in the land but the respondents obtained the backing of a majority in numbers of the owners. Mr Tylor, who appeared before the High Court on behalf of the respondents, submitted that the relevant majority was a numerical one of the owners of the block irrespective of their shareholding. He referred to s. 50(1) of the Cook Islands Amendment Act 1946 which provides:

In any case where the Land Court is satisfied that it is the wish of the majority of the owners of any Native land that that land or any part thereof should be occupied by any person or persons (being Natives or descendants of Natives) the Court may make an order accordingly granting the right of occupation of the land or part thereof to that person or those persons for such period and upon such terms and conditions as the Court thinks fit.

Mrs Browne on behalf of the present appellant submitted that where the shares were not defined the relevant majority was a numerical one, but where the shares were defined the relevant majority referred to in s. 50(1) was a reference to the majority of the shareholding.

By virtue of an Order for Investigation of Title made on 21 June 1905 the land was vested in six persons in equal shares. We were told that the appellant is entitled to 3/28^ths of the six shares whereas the respondent Terepaupii is entitled to 1/280^th of the six shares. At the meeting of owners on 8 October 1984 there was a representation of 57 owners holding 3.0643 shares of the total of six in the section. Of these 40 persons (including proxies) holding .79 shares supported the respondents and 16 (including proxies) holding 2.28 shares supported the appellant. The appellant concedes that the respondents had the support of the majority in numbers of the owners represented at the meeting.

On 9 October 1984 when the results of the meeting were disclosed to the High Court, Dillon J invited counsel to make submissions in writing as to the meaning of "majority" for the purposes of s. 50(1). In written submissions made in response to this invitation Mrs Brown submitted that the term "majority" in s. 50(1) meant "a majority of the shares". She sought to invoke s. 47(1) (a) of the Land (Facilitation of Dealings) Act 1970 which deals with the system of voting at a meeting of assembled owners under that Act. Under s. 47 the size of the shareholding of owners voting personally or by proxy is material where the relative interests of the owners have been defined. Mrs Browne submitted that if s. 50(1) of the Cook Islands Amendment Act 1946 were to be read in the light of s. 47 of the Land (Facilitation of Dealings) Act 1970 the appellant could be said to have the consent of the majority of owners. The contrary argument advanced by Mr Tylor was that the Land (Facilitation of Dealings) Act 1970 applied only to meetings falling within the provisions of that Act and had no relevance to applications or Occupation Rights; that in any case counsel had agreed that whoever gained the consent of the majority of the owners present at the meeting would proceed with an application and that the other applicant would withdraw; that while in the present case neither the appellant nor the respondents had the consent of the majority of owners by numbers (there were 105 owners in all 11 of whom were dead, leaving 94, of whom a majority was 48) the respondents did have the backing of a clear majority of persons present at the meeting.

On 18 March 1985 Dillon J expressed the view that the majority in number of owners present at a meeting called to see who had the backing of the majority supported the application of the respondents and he declined the application of the appellant and granted that of the respondents.

In this Court Mrs Browne did not contend that it was not open to this Court or to Dillon J in the special circumstances of this case to construe the word "majority" as being the numerical majority rather than a majority of the shareholding. Moreover, she accepted that a majority of the persons present or represented at the specially convened meeting on 8 October 1984 for the purposes of ascertaining whether an occupation right was to be granted to the applicant on the one hand or the respondents on the other, had expressed their views in favour of the respondents.

It is, therefore, strictly unnecessary for this Court to express any final views on the interpretation of s. 50(1). The proper construction to be given to that section was the subject of discussion not only in this appeal but in other appeals heard in the recently completed sittings of this Court at Rarotonga. However, in no case was the matter ever fully argued.

The reference in s. 50(1) is to the "majority of the owners" and not "the owners holding the majority of the shareholding". On a normal reading the phrase would mean the majority in numbers, and not in shareholding. However whether that always must be so does not fall to be determined here authoritatively, as Mrs Browne accepts that when they called the meeting counsel contemplated that the matter would be determined by numbers. That was their agreement. Nevertheless, as we noted earlier, she did at the hearing of this appeal draw our attention to the rules governing voting at meetings of "assembled owners" laid down by s. 47 of the Land (Facilitation of Dealings) Act 1970 and suggested that they might have some bearing on the question we are discussing here. But it seems to us that those rules relate only to meetings called pursuant to the provisions of that Act and in respect of the limited class of resolutions set out in s. 5 thereof.

An even more difficult question appears to us to be whether the majority, when one is dealing with s. 50, is the majority of owners of the land wherever resident at the time their views are sought. We are told that the High Court as a practical means of overcoming the difficulty caused by the residence of many Cook Islanders overseas, particularly in New Zealand, has taken the view that it can be satisfied in terms of s. 50(1) if 90% of the owners resident in the Cook Islands consent to the granting of an Occupation Right. While we appreciate that there may be good sense in taking such a view as a practical means of overcoming a real difficulty, we are doubtful whether the Legislature of the Cook Islands ever had this view in mind when it enacted s. 50 (1) in 1946. At that time the number of Cook Islanders living in New Zealand was relatively few and it would have been comparatively easy then to ascertain the view of all the owners or almost all of them because the majority would have resided in the Cook Islands. But the number of Cook Islanders residing in New Zealand now far exceeds the number residing in the Islands themselves. In the result a situation has arisen which the Legislature in 1946 could not have had within its contemplation, and a very real question which arises now is whether the views of the owners residing outside the Cook Islands is to be excluded. There is nothing in s. 50(1) which would expressly admit of such a view. For these reasons we respectfully draw this matter to the attention of the Cook Islands Legislature and suggest that the time has now come for s. 50(1) to be reviewed and possibly re-enacted in some form which makes it clear what "majority" means in s. 50(1) and whether that majority is to be a majority of all persons, wherever resident, or merely those resident at the time of the giving of consent in the Cook Islands. If it is to be the latter, then any amending legislation might possibly need to be retrospective to give statutory recognition to the practical solution adopted by the Courts in the past in an endeavour to overcome a real impasse.

In dealing with this appeal it is sufficient for us to observe that s. 50(1) contemplates two stages. The first provides that if a certain prerequisite is established to the satisfaction of the Court, namely that it is the wish of the majority of the owners of the land that a person or persons shall occupy that land, then the second stage of the section comes into operation, namely the Court may make an Occupation Order in favour of the person or persons whose occupation is supported by a majority of the owners. In short, the first part of the section imposes a threshold test; the second part confers a discretion, once the threshold test has been satisfied, allowing the Court to grant an Occupation Right. But the discretion is a general one and is not fettered by reference to any particular considerations. What matters will be relevant to its exercise and, if found to be relevant, what weight should be given to them, will depend upon the circumstances of each case. The mere fact that it is the wish of the majority of owners that the land should be occupied by a particular person, while permitting the Court to exercise its discretion in accordance with that wish, does not oblige the Court to do so. There may be other considerations to persuade the Court to the opposite conclusion.

Mrs Browne's principal contention on this appeal was that Dillon J had rather assumed that an Occupation Right should be made in the respondents' favour once the consent of the majority of the owners had been obtained, and that he had given no or insufficient weight to various matters which were relevant to the exercise of his discretion. She mentioned, as some of the relevant matters, the family history, the relatively short period the respondents' family had occupied the land, the fact that one of the respondents holds an unrevoked Occupation Right, now 13 years old, in respect of a piece of land in another area.

We note that some of these matters at least were mentioned in the appellant's evidence, and we think that by their very nature all of them would have been known to the other owners at the time that consent was given. What is more important, and, we think, decisive of this case, is that counsel who appeared in the High Court were agreed that the Occupation Right would be granted to the applicant who obtained the agreement of the majority of the owners and that the other applicant would then withdraw. The history of the proceedings indicates that this was the live issue in the case and the notice calling the meeting of owners confirms it. That, too, was how counsel saw the issue, how the case was conducted in the High Court, and the Judge was invited to decide the case on that basis.

In view of this, this Court considers that it would be quite wrong to allow the appellant now to introduce matters the relevance of which were at best only peripheral when the case was before the High Court.

In our view Dillon J has not been shown to have exercised his discretion wrongly. The appeal is therefore dismissed and the grant of the Occupation Right to the respondents confirmed. The respondents are entitled to costs in the sum of $400.

McMULLIN J

Solicitors: Clarkes, Rarotonga, for appellant
Short & Tylor, Rarotonga, for respondents