In one of our firm’s success stories in litigation, our client, Negara Developments Limited (Negara) was awarded compensatory damages in trespass, as well as exemplary damages, against Hikurangi Forest Farms Limited (Hikurangi). Trespass was established on the grounds that Hikurangi had harvested pine trees on Negara’s land without right to do so.
Background
Hikurangi, a large subsidiary in the Malaysian-owned Samling Group at the time, committed trespass in February 2015 when they attempted to harvest 1.3 ha of pine trees growing on Negara’s land. Hikurangi claimed that they were entitled to do so because they planted the trees there in 1984 under an unwritten give-and-take arrangement with the previous owners, giving them an unregistered interest over the pine trees.
Negara, a small, New Zealand-owned forestry company, and its director, Mr Scott Funnell, issued a written warning to Hikurangi to stay off their land and made it clear that harvesting any trees would amount to trespass. Hikurangi ignored this and began harvesting anyway. Mr Funnell, in response, issued a trespass notice on Hikurangi, who responded by suing Negara in the High Court.
Legal Proceedings
Hikurangi brought six causes of action against Negara in their legal proceedings. These actions included:
- fraud under the Land Transfer Act 1952;
- equitable estoppel;
- constructive trust;
- breach of the give-and-take arrangements; and
- a declaration that the issued trespass notices by Negara were invalid.
These claims were made on the basis that Mr Funnell was aware of the unregistered interest at the time he purchased the land through SB Developments Limited (SB Developments), who later transferred ownership of the land to Negara.
Negara, represented by Tamina Cunnigham-Adams and Thomas Bloy of Evolution Lawyers, defended these claims in Court. Their defence was that ownership of the trees passed to Negara when SB Developments Limited purchased the relevant land in 1996 and transferred ownership to Negara. Evidence was given by Mr Funnell that he had no prior knowledge of the give-and-take arrangement by Hikurangi to the pine trees.
He explained that when the land was purchased by SB Developments, a company which Mr Funnell was the sole director and significant shareholder of, there was a belief that all trees within the legal boundary of the land were included in the purchase. Mr Funnell gave evidence in Court that he had no prior knowledge that Hikurangi claimed any interest in Negara’s pine trees under a give-and-take arrangement.
In response to the above actions, Negara also filed a counterclaim for the tort of trespass against Hikurangi. The focus was on the actions committed by Hikurangi in 2015 when they entered Negara’s land and began harvesting the pine trees. Negara contends that Hikurangi’s actions caused Negara to lose the value of the felled trees and that due to the damage caused by the harvesting process, the land that the trees were on is now unusable.
To compensate for their losses, Negara sought:
- compensatory damages for $45,000 for the lost opportunity to harvest the pine trees; and
- exemplary damages of an unidentified sum.
Hikurangi defended this counterclaim on the grounds it was entitled to enter Negara’s land and harvest the trees under its give-and-take agreement.
Court’s Findings
In Her Honour Justice Duffy’s judgement, it was found that prior to SB Developments and later Negara becoming the registered owners of the land, Mr Funnell did not know that Hikurangi had an unregistered interest in the trees on Negara’s land and was not wilfully blind to said interest. Being the registered owners of the land and the trees growing on it, Negara defeated any unregistered interest that Hikurangi had prior to their ownership.
Mr Furnell’s actions after Negara becoming the registered owners of the land also did not create any new interest in the trees, either in equitable estoppel, constructive trust, or contract.
On the counterclaim for the tort of trespass, Her Honour found that since Hikurangi’s claim to an unregistered interest on the land had been rejected, there was no defence to the trespass claim.
Decision
Compensatory damages were awarded at $45,000 for the loss of the trees due to Hikurangi’s harvesting.
Exemplary damages were also awarded at $7,500. Her Honour found Hikurangi acted outrageously and subjectively recklessly based on the facts. It was accepted that Mr Furnell had always rejected Hikurangi’s rights to harvesting the trees on Negara’s land and that, despite same day objection from Negara to harvesting, Hikurangi continued anyways and only stopped when issued with a trespass notice. Hikurangi also acted recklessly in continuing to claim ownership of the trees on Negara’s land up until the time the trespass notice was issued.
Conclusion
This case revolved around an unwritten give-and-take agreement with the previous owner of the land, an agreement which Negara was not bound by. Hikurangi’s unregistered interest in Negara’s land was defeated by Negara’s registered ownership, resulting in Hikurangi having no enforceable rights to harvest the trees. As a result, Hikurangi had no defence to Negara’s counterclaim for trespass due to not having a right to harvest trees on Negara’s land. Compensatory damages were awarded due to loss of the trees. Exemplary damages were awarded on the grounds that Hikurangi acted outrageously and recklessly in pursuing their unregistered interest in Negara’s land.
We successfully defended our client’s interests in their land and their trees from the above actions and helped to achieve a favourable outcome in this complex legal matter.