The Supreme Court’s decisions late last year in A, B and C v D and E Limited as Trustees of the Z Trusti (the Alphabet case) and Whakatōhea Kotahitanga Waka (the Edwards case) v Ngāti Ira O Waiowekaii (the Edwards case) offer a striking study in contrasts.
Both decisions have drawn attention for appearing to resist judicial overreach. But closer examination reveals a more complex picture. One showed genuine restraint in the face of compelling facts. The other demonstrated unprecedented judicial activism.
As previously discussed in this column, the Supreme Court’s recent track record reveals two forms of judicial overreach. The first is the Court’s radical approach to judge-made law, reshaping it to match the judges’ views of changing societal values. Secondly, it has adopted a creative approach to statutory interpretation, loosely interpreting or even rewriting Parliament’s clear words.iii
The Alphabet and Edwards appeals presented the Court with fresh opportunities to continue down both activist paths. The Alphabet case invited judicial creativity with judge-made law. Edwards offered scope for expansive statutory interpretation.
The Court’s responses proved dramatically different. It exercised uncharacteristic restraint in the Alphabet case. But this fleeting orthodox inclination was more than offset by an approach in Edwards that challenges basic constitutional norms.
Alphabet case
The Alphabet case asked the Court to unwind asset transfers made by the appellants’ father to a family trust. The appellants argued for ongoing fiduciary duties into adulthood. These claims were based on their father’s grievous breaches of trust during their childhood. The appellants claimed his transfer of assets to defeat potential claims breached those duties.
At the heart of their claim lay a history of horrific physical and sexual abuse. But the legal question was whether courts should reconstruct fiduciary principles to provide a remedy decades later.
The Court’s rejection of this novel fiduciary duty claim simply upholds foundational principles of trust and equity law. These principles should never have been in doubt. The Court correctly recognised that fiduciary duties flow from relationships, not remedial needs. Courts cannot reverse-engineer fiduciary relationships to provide remedies. The Court held that personal property rights remain personal, absent a clear legal basis for restriction.
The Court, nevertheless, acknowledged the “great wrong” done to the children. But it concluded that reconstructing fiduciary principles to provide a remedy would require “reworking fundamental concepts of fiduciary relationships which is disconnected from their doctrinal underpinnings.”iv
Barrister Anthony Grant, writing in Law News, has questioned how a court that found novel remedies through tikanga in Ellis could not find one here.v This critique highlights the fundamental problem with the Supreme Court’s recent jurisprudence. It has created the expectation that established legal boundaries should yield whenever a hard case presents itself.
But not every wrong finds its remedy in equity. Nor should it. Criminal law exists to deal with violent abuse. So does the civil law’s exemplary damages regime. The reaction to the Alphabet case shows how the Supreme Court’s ‘anything goes’ mentality in cases like Ellis v R and R v Fitzgerald has done grave harm to the rule of law.vi
Edwards case
Initial reports on the Supreme Court’s Edwards decision suggested it, too, marks a return to orthodoxy.
The case – which is ongoing – involves an appeal over the interpretation of the Marine and Coastal Area (Takutai Moana) Act 2011 (MACA). The dispute centres on multiple overlapping applications under section 58 of the Act for customary rights in the harbours, river mouths, beaches, and seascape of the eastern Bay of Plenty.
Section 58 sets out the test for recognising customary marine title. It has two distinct limbs. First, applicants must prove they hold the area in accordance with tikanga. Second - and notably without any reference to tikanga - they must prove they have exclusively used and occupied it since 1840 without substantial interruption.
The Court of Appeal (and, before it, the High Court) had adopted an interpretation of Section 58 of the Act that made it easier for groups to gain customary marine title by effectively reading down MACA’s statutory requirements.vii This threatened to upset Parliament’s careful balancing of interests. On appeal, the Supreme Court needed to determine whether the novel interpretation by the lower courts could stand.
The Supreme Court’s decision initially appeared to provide much-needed correction to the Court of Appeal’s problematic approach. The Supreme Court rightly rejected the Court of Appeal’s majority’s view that only statutory authorisations could constitute ‘substantial interruption’. But this superficial correction masks a deeper problem.
Parliament structured section 58 to involve two distinct legal inquiries. Parliament included tikanga in the first limb but omitted it from the second. The differing approach signals clear intent: exclusive use and occupation in the second limb should be assessed without reference to tikanga considerations. Yet the Supreme Court effectively read tikanga considerations back into this second limb, undermining Parliament’s statutory design.viii The Court’s approach will enable concepts like ‘shared exclusivity’ that Parliament’s careful drafting appears designed to preclude.
The Court attempted to justify this approach by characterising MACA as ‘reconciliatory’ legislation requiring a ‘Treaty rights-preserving lens’.ix But this justification cannot withstand scrutiny. While MACA certainly aims to recognise legitimate customary interests, it does so through a carefully structured statutory test - not through open-ended Court-supervised ‘reconciliation’.
This Supreme Court’s concerning departure from Parliament’s statutory scheme was compounded by its extraordinary procedural manoeuvres. The Court’s judgment was delivered with unprecedented haste - just 17 days after hearing complex arguments from 19 parties.
The judgment was issued on December 2, just as Parliament was preparing to consider the Marine and Coastal Area (Takutai Moana) Amendment Bill before the Christmas recess.
Instead of providing a complete judgment resolving the appeals, the Court issued what it called a ‘first judgment’ to ‘state the test afresh’, with a second judgment to follow addressing the actual appeals and other issues.x
This unusual two-stage appellate process, coupled with its timing, suggests the Court was more focused on influencing legislative deliberations than resolving the specific disputes before it. It suggests a court that sees itself less as an arbiter of disputes than a political actor.
In late December, the government understandably deferred consideration of its MACA amendment bill pending Crown Law advice on the implications of the Supreme Court’s judgment. While this reflects appropriate process, it should not deter Parliament from exercising its sovereign power to correct the Court’s departure from Parliament’s statutory scheme.
Indeed, the Court’s unprecedented procedural manoeuvres and apparent attempt to influence the legislative process make it all the more important that Parliament act decisively to reaffirm its constitutional supremacy.
The broader implications
The Edwards judgment exemplifies a broader pattern of judicial activism that has drawn increasing criticism. Last year, Jack Hodder KC delivered a powerful critique of the Supreme Court’s jurisprudence in his Legal Research Foundation lecture, One Advocate’s Opinions - The “Least Dangerous Branch”? Predictability and Unease.xi My report for The New Zealand Initiative, Who makes the law? Reining in the Supreme Court, raised similar concerns about judicial overreach.xii
The two critiques document a Court increasingly willing to supplant established legal principles or clear statutory language with its own preferences.
Ellis v R introduced unprecedented uncertainty around tikanga’s role in common law, effectively creating a parallel legal system without clear principles for its application.xiii Fitzgerald v R rewrote clear statutory language under the guise of interpretation, stretching section 6 of the New Zealand Bill of Rights Act 1990 (NZBORA) beyond recognition.xiv Family First abandoned established charities law principles, rejecting the statutory focus on charitable purposes in favour of the Court’s perception of contemporary values.xv Make It 16 Inc v Attorney-General waded into politically sensitive territory relating to the age limit for voting and, in doing so, got the law hopelessly wrong.xvi
Each decision moved further from orthodox legal principles, creating expectations that courts would continue pushing boundaries. As Who makes the law? warns, the practical consequences are severe. Basic legal concepts that were once clear have become uncertain. The Court’s willingness to find novel remedies has encouraged speculative litigation. The attempt in the Alphabet case to construct a fiduciary duty three decades after the relevant relationship ended illustrates this problem. Commercial and personal affairs have become less predictable as settled principles are unsettled.
Most fundamentally, the Supreme Court’s timing and procedural irregularities in the Edwards case raise an unfortunate inference that institutional self-interest has guided its approach. Regardless of whether this is so, the timing alone risks further erosion of public confidence in judicial impartiality.
Who makes the law? proposes several key reforms. These include selective Parliamentary intervention to correct aberrant decisions, tightening statutory interpretation rules, and defining the rule of law in the Senior Courts Act. Reforms should also reform amend section 6 of NZBORA and ensure judicial appointments prioritise respect for orthodox legal principles. Together, these changes would help prevent future departures from constitutional norms.xvii Without such systematic change, there is no guarantee against further judicial adventurism.
The Edwards decision demonstrates why such reform is critical. When our highest court issues hurried judgments ahead of potential parliamentary intervention and creatively reinterprets clear statutory language as it did in Edwards, it has lost sight of its proper constitutional role.
Structural reform is needed to ensure consistent respect for parliamentary supremacy and the rule of law.
To read the full article on the LawNews website, click here.