Decision by former A.G. “unwise” but “not in breach” of his duties

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Aumua Ming Leung Wai.

Aumua Ming Leung Wai.

JUDGEMENT OF THE COURT 

Introduction:

1. This is an appeal against a decision of Aitken J in which the plaintiff’s claim against the Attorney General in his personal capacity was struck out. The case concerns the removal of a caveat in February 2014. The first defendant Mrs Drake, is sued for alleged professional negligence when acting for the plaintiff in an endeavour to maintain the caveat. The third defendant, the Ministry of Natural Resources and Environment, is sued in relation to actions of the Registrar of Land in removing the caveat. These claims remain afoot. 

2. A proceeding commenced in 2002 forms the background to this case. The plaintiff and her brother sued another brother, Molio’o, alleging that he had acquired land by gift from their father through undue influence. The caveat was lodged to protect the plaintiff’s claimed interest in the subject land. Coincidentally, the underlying claim, which was heard in the Supreme Court in 2003 but is still not finally resolved, is the subject of another judgment from the February 2016 session of the Court – see Pune v the Administrators of the Estate of Molio’o Noeluaga, CA 16/15, judgment 19 February 2016.

 

The background in brief

3. In 1989 the father mortgaged the land to Samoa Breweries. In July 1998, some 2 ½ months before his death, the father transferred the land to his son, Molio’o, by way of gift. 

Molio’o remortgaged the land to Samoa Breweries. 

 

4. In 2002 Mrs Pune and her brother commenced a proceeding in which they challenged the transfer to their brother for undue influence. They also lodged a caveat to protect their alleged interest in the land. The claim was heard in 2003 and decision reserved. 

5. In 2004 Molio’o died. Subsequently, the mortgage he had granted to Samoa Breweries fell into arrears and, in 2013, the Brewery exercised its power of sale as mortgagee. The purchaser was Samoa Stationery and Books Ltd (SSBL). The Attorney-General’s wife owned and controlled this company. In December 2013, Samoa Breweries requested the Registrar of Lands to send a notice to the caveators advising them that in instrument (a transfer to SSBL) was awaiting registration and that the caveators needed to “apply to (the) court to verify their caveat within the notice period”. This triggered a number of actions to which we will refer in a moment. 

6. Returning to the underlying proceeding, the trial judge issued what was labeled an “interim decision” in July 2014. It stated that the conveyance to Molio’o by way of gift was “fraudulent”, but no reasons were given. Nor was relief ordered in favour of the plaintiff’s because the judge required submissions concerning any “Third party mortgage”. Despite further steps taken by the plaintiff’s, a final resolution of the land case has not eventuated. The decision of this Court (in CA 16/15) contains directions intended to assist in reaching a conclusion to the proceeding. But the appeal itself was adjourned to the next session of the Court. 

7. This claim against the former Attorney-General, Ming Leung Wai, is based upon emails exchanged from December 2013 when Samoa Breweries sought removal of the caveat to February 2014 when the caveat was removed. Curiously the emails were not before Aitken J when she heard the strike-out application in October 2015. Instead, Mr Leung Wai provided an affidavit in which he deposed that “at no point did I provide legal advice to, instruct or direct the Registrar of Lands or the Ministry of Natural Resources and Environment to remove caveat 837x”. He then annexed an affidavit sworn by his Assistant Attorney-General and another affirmed by the Assistant Chief Executive Officer of the Ministry. 

8. The annexed affidavits referred to the contents of a letter and various emails, but the documents themselves were not produced, save for an initiating letter dated 13 December 2013 from Samoa Breweries solicitor to the Registrar, requesting that the caveators be put on notice (see back at [5]). In particular, the Assistant Attorney-General deposed that Mr Leung Wai did not “direct” any officer of the Ministry to remove the caveat, although he did on 19 December 2013 request a Ministry officer to ensure notification was given to the caveators. 

Further, she said that when the Ministry sought legal advice concerning whether the caveat had lapsed Mr Leung Wai disqualified himself from involvement on account of a “conflict” and delegated responsibility to her. 

9. In similar vein, the Ministry witness affirmed that Mr Leung Wai did not “direct” anyone to remove the caveat and that she did not “understand the email to be legal advice from Mr Leung Wai to the Ministry, but simply for the Ministry to initiate its usual notices to activate the processes which, ultimately, determine whether a caveat is maintained or activated”. She added that subsequent legal advice provided to the Ministry was from Muriel Lui, the Assistant Attorney-General, not Mr Leung Wai “because he had a conflict.”

10. The manner in which this evidence was introduced in direct support of the strike out application was improper. The supporting affidavits made it plain that a number of emails were of importance. The best evidence was the emails themselves. Documents, if produced, speak for themselves. Here they were not produced. Instead two deponents gave secondary evidence as to the contents, and their interpretations, of the emails. 

11. Unsurprisingly, the approach excited suspicion and uncertainty. Time was wasted in the Supreme Court with argument concerning what the emails may, or may not, convey. The task of the Judge was made more difficult than it needed to be had a normal straight-forward approach been taken. And, this occurred against the background of Aitken J’s legally correct self-direction that in a strike out context facts pleaded by the plaintiff are to be accepted as capable of proof, unless there is undisputed evidence presented to the Court. To avoid dispute the first step required of the second defendant was that he table the contemporaneous documents upon which he sought to rely. 

12. These issues prompted a response in this Court. Two days before the hearing we required production of the emails or that an affidavit be filed explaining why they could not be provided. Mr Leung Wai filed an affidavit annexing the emails as exhibits. This proved to be of considerable assistance to counsel on both sides and to the Court. Various concerns raised in the Notice of Appeal fell away and argument became more focused. 

13. We also received an affidavit filed by the plaintiffs. It was sworn by a Samoan academic who has experience of not only her home country’s customary practices and expectations, but also those of other cultures, including New Zealand. She provided insights into how Samoan female subordinates in particular respond to requests from males in positions of power. We decided to receive this evidence because of its relevance to the interpretation of the email evidence while acknowledging that we, the New Zealand based judges, enjoyed the benefit and advantage of having Nelson J in our midst when evaluating these aspects.

The email evidence 14. The first email was from Herman Kruse, the Samoa Breweries solicitor, to the Ministry dated 12 December 2013. It contained this:  “Please accept our enclosed application pursuant to s57 of the Land Titles Registration Act 2008 for the removal of the caveat from the land above referenced. We would be grateful if you would initiate the usual notice to activate this process.” The application was the letter of the same date which sketched the history of the matter (as in [3] to [5]). Including that the Brewery had sold the land to SSBL and wished to register a transfer to the purchaser. 

15. At the same time Mr Kruse sent a cryptic email to Mr Leung Wai at his workplace saying with reference to the removal of the caveat "FYI". We infer that at least the email to the Ministry was copied to Mr Leung Wai. 

16. On 15 December 2015 the CEO of the Ministry died, unexpectedly. This, it seems, was a cause of significant distraction to Ministry staff. 

17. Seven days after Mr Kruse first wrote to the Registrar Mr Leung Wai sent the key email dated 19 December to a Ministry officer. It read:  “Dear Sala Please accept my condolences on the untimely passing away of your CEO. But I am emailing you for a favour please. We are trying to buy the land that Herman wrote to you about below but there is a caveat on it. I would appreciate it if you can assist with the matter by notifying the caveators soon as per Herman's request. Thank you and kind regards, Ming." 

18. The next morning, 20 December, the recipient replied: “Thank you for your sympathies Aumua I have copied Filisita here to attend to it as per your request.” Later Mr Leung Wai acknowledged the reply and wished Sala a Merry Christmas and a Happy New Year.  19. On 23 December a Ministry officer gave notice to SSBL’s solicitor, Mrs Drake that an application for removal of the caveat had been lodged and that the caveators had 21 days within which to obtain an order of the court extending time or the caveat would lapse. 

20. During January and early February 2014 there were a number of developments. Mrs Drake, that an application for removal of the caveat had been lodged and that the caveators had 21 days within which to obtain an order of the court extending time or the caveat would lapse. 

21. In late January the Ministry wrote to Mrs Drake advising that the 21 day time period would expire on 3 February (we assume that time did not run while the Court was closed over the Christmas holiday period). On 4 February a Court order extending the caveat was made. Mrs Drake telephoned and advised the Ministry of this and confirmed the advice by a letter on 5 February. 

22. Those developments spurned a further email exchange. On 7 February Mr Leung Wai wrote to the same female Ministry officer:

 “Hi Sita

I just met with Herman regarding his request for the removal of the caveat. It appears that legal assistance is required to be provided by my office to you. Since I clearly have a conflict of interest, I will delegate this matter to Muriel to handle. Can you please pass on the relevant file to Muriel asap? Thank you, Ming”

23. Within the hour Sita replied:

 “Malo Aumua

Sorry for the late response to your email, regarding the above matter because we were trying to go through the process, we took started from December last year and found out that Herman emailed (the CEO) on 12 December and (the CEO) passed away on 13 December, and asked to give notice regarding section 57, but we sent the notice using section 55 and the request from you, sorry of misunderstanding because Fala just sent me the email and asked for my assistance for your request and I asked Fala straight away to prepare the letter to the caveator, thinking that the request was straight from you, section 55 was then used, so it can quickly go out and lapse if an Order has not yet been received I apologise Aumua for this, we will prepare these things to pass on to Muriel, Ruby (Drake) does not rest but writes every day and also they sent us an Order from the Court for the caveat to remain until further notice. 

Have a nice day, Sita

 (emphasis added as these words have been translated from Samoan)

24. Next, on 10 February Sita emailed Muriel the Assistant Attorney-General:

 “Ok, Muriel we are compiling stuff for the file, then we will contact you. Thanks 

Sita

 (emphasis added: translated)

On 11 February, Muriel replied:

“Hi Sita, 

Just following up on the file pls is it ready? Your urgent attention is needed. 

Thanks”

25. An hour later Sita emailed back:

“Muriel 3.30pm would be nice for us to meet and hand over the file and good to talk as well so we are clear about the matter. 

Thanks 

Sita”

 (emphasis added: translated)

26. Finally, on 24 February the caveat was removed by the Ministry on the grounds that s55 of the Land Titles Registration Act 2008 applied and that a Court order was not served before the lapse of the 21 day time limit. The plaintiff’s claim against all defendants that as a result they have lost valuable land, family graves have had to be relocated and houses demolished, and that they have been put to great expense.  They seek punitive damages of $1 million tala and a similar amount in general damages.      27. We have set out the email exchanges in some detail because of their importance to the outcome of the strike out application, particularly those written by Mr Leung Wai himself. Whether he was guilty of misconduct of some kind sufficient to give rise to a cause of action of the kind alleged against him is the central issue. The emails had on the conduct of others. 

28. We also note the claim against the Ministry includes causes of action for breach of statutory duty and contempt of a Court order. The plaintiff’s allege that due to the favourable treatment of Mr Leung Wai, the Brewery, and/or SSBL, correct process was not followed. 

The strike out principles

29. The principles are well settled and were not in dispute. The party seeking an order must show that the claim against it is certain to fail. The jurisdiction to strike out is to be used sparingly and only in a plain and obvious case. Where a cause of action is relevantly in a developing area of the law this may weigh further against making a strike out order. It may be appropriate in some cases for the court to extend to plaintiff the opportunity to amend or replead their case if an unpleaded cause of action appears to be available. 

30. With regard to evidence, the facts pleaded in support of the claim are assumed to be capable of proof. But the court may receive affidavit evidence which, if undisputed and critical to some element of the causes of action, justify an order in favour of the applicant. 

The claim against the second defendant

31. The amended statement of claim pleads one cause of action, breach of fiduciary duty, against the second defendant. However, Mrs Woodroffe in papers headed “Proposed further amendments to statement of claim” amplified the particulars relating to the fiduciary claim and indicated her intention to add causes of action for misfeasance in public office and breach of statutory duty. 

32. We consider that the better course is to consider all actual and potential causes of action. Aitken J approached the application in a similarly broad manner. 

33. Mr Lithgow supported the reasoning of the Judge below and challenged the actual and proposed claims arguing that they were bound to fail for a variety of reasons. One argument was common to all three, namely that Mr Leung Wai was not involved in any conduct which as a matter of law could found the suggested causes of action. 

34. We shall consider this contention first. Not only does it go to the heart of the case, it is also an aspect in relation to which we have an advantage over the Judge at first instance. We have seen, and hear argument concerning, the content of the emails. 

 

Evaluation of the conduct evidence.

35. Aitken J concluded:

“[87] Nothing is the pleadings or the material before the Court suggests that the Second Defendant has done anything other than send this email. If the email contained a direction…it was to do what the Third Defendant was already required to do as expeditiously as possible”

We agree. However, having seen the email we now know there was no direction from Mr Leung Wai, rather he sought a “favour please”, namely he would “appreciate it” if the caveators were notified “soon”. This followed Mr Kruse’s application on 12 December to have the caveators put on notice of the need to obtain a Court order or the caveat would lapse. 

36. Mr Leung Wai’s subsequent email of 7 February 2014 is of no relevance. By then the Ministry was in need of legal advice from his office and being conflicted, he put in place a process to avoid his personal involvement. Nor does Sita’s immediate response to that email (para [23]) affect matter. It records how Ministry officers had responded to Mr Kruse’s application, which may be relevant to the claim against the Ministry, but not to Mr Leung Wai’s position. In short, he did no more than request that the Ministry do something it was already required by law to do. There was no actionable misconduct. 

37. Is there any possibility that the situation may change at a substantive hearing as a result of cross-examination? Counsel did not suggest as much, and we are satisfied that there is no realistic possibility of this happening. We see this undisputed factual conclusion as fatal to the pleaded and proposed causes of action, as we will briefly explain. 

38. The most that can be said of Mr Leung Wai’s conduct is that he was unwise to send the 19 December email particularly in the form of an office email and to people in the Ministry he obviously knew personally. The much better course would have been for him to have abstained from all involvement given his official position and obvious conflict of interest. 

The relevance of the conduct finding to the claims 

39. In the circumstances of this case a breach of fiduciary duty required proof that the Attorney-General was in a fiduciary position, and that he used that position to obtain a personal advantage. It is idle to suggest that Mr Leung Wai obtained a personal advantage by requesting that a statutory obligation already triggered by Mr Kruse be carried out “soon”. Hence there was no conduct capable of constituting a breach. 

40. Aitken J was also persuaded that Mr Leung Wai was not shown to be a fiduciary in the circumstances of this case. She gave extensive reasons for this conclusion, with which we provisionally agree, although we need not express a concluded view. There is no need to do so. 4. If a misfeasance claim were added it would require proof: a. that being in public office Mr Leung Wai acted deliberately and unlawfully in the exercise of a duty; b. knowing that his conduct was unlawful and likely to cause injury; and c. damage was caused to the plaintiff: See Garrett v Attorney-General [1991] 2 NZLR 332 (CA). The relevant conduct here does not even come close to meeting the requirements of this cause of action. 

42. Cases in which the tort of breach of statutory duty are considered often hinge on whether the statute relied upon both imposes a public duty and confers a private law remedy upon a section of the public in the event of the breach or non-performance of that duty. Here, Mrs Woodroffe relies on very general duties imposed by s19 of the Public Service Act 2004 to comply with a code of conduct which requires, for example, that officials act with honesty and impartiality, avoid conflicts of interest and not use their position to obtain a benefit for themselves or another.  43. Mr Leung Wai’s conduct, although unwise, was not in breach of any of these duties. We also seriously doubt that the statute is one intended to confer a private law remedy on a section of the public, but there is no need to consider that aspect. 

Conclusion: 44. The appeal is dismissed and the strike out order made by Aitken J confirmed. The second defendant is entitled to costs in the sum of $3,000.00 with reasonable disbursements. The costs award reflects that to a degree the second respondent brought the appeal upon himself through the failure to produce the crucial email evidence at first instance.

45. We draw attention to the Court’s observation in the adjournment decision in the related proceeding. CA 16/15, at [37] to [39]. These observations show that there is a pressing need for the two proceedings to be rationalized and carefully case managed. 

Honourable Robert Fisher

Honourable Justice Panckhurst

Honourable Justice Nelson

 

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