Supreme Court Allows Part of Appeal: Fraudulent Concealment Set Aside

OUTCOME: Allowed in Part

WHANGAREI DISTRICT COUNCIL v [RESPONDENT] [2026] NZSC 72 [4 June 2026]

IN THE SUPREME COURT OF NEW ZEALAND I TE KŌTI MANA NUI O AOTEAROA SC 59/2024 [2026] NZSC 72

BETWEEN WHANGAREI DISTRICT COUNCIL Appellant AND [RESPONDENT] Respondent Hearing: Further submissions: 18–19 March 2025 4 April 2025 Court: [COUNSEL] [NAME], [COUNSEL] and [COUNSEL] [NAME] Counsel: [redacted] [NAME] [NAME] and [COUNSEL[NAME] [COUNSEL] for Respondent Judgment: 4 June 2026

JUDGMENT OF THE COURT

A The appeal is allowed in part. The finding that the appellant fraudulently concealed the respondent’s right of action is set aside.

B The appeal in respect of the award of damages of $90,000 for loss of the value of the [ADDRESS] property, and interest on that sum in the terms set out by the High Court, is dismissed.

C The damages awarded to the respondent are otherwise set aside.

D The cross-appeal is dismissed.

E The respondent must pay the appellant costs of $45,000 plus usual disbursements. We allow for [NAME].

____________________________________________________________________

REASONS

Para No Summary of Reasons [1] [NAME], [NAME], [NAME] and [NAME] [NAME] [16] [NAME] [185]

SUMMARY OF

REASONS (Given by the Court) [1] This is a brief summary of the reasons of the Court regarding the matters of legal principle arising in this case. It does not provide full coverage of this Court’s reasoning and must be read in conjunction with the full reasons. Background [2] This case concerns claims against the Whangarei District Council for negligence and misfeasance in a [NAME] in relation to enforcement action taken by the Council to restrict quarrying on the respondent’s property between early 2005 and mid-2011. The Council issued abatement notices and pursued enforcement proceedings, asserting the respondent lacked resource consent. A 1988 land use consent (LUC) authorising quarrying was found in the Council’s archives in 2009. By then, [NAME] [RESPONDENT] was compelled to sell the property, at a significant loss. He sued the Council in 2015, seeking damages. [3] The High Court awarded just over $4.25 million for negligence and misfeasance, but the Court of Appeal overturned the misfeasance finding and reduced the quantum of damages. The appeal and cross-appeal in this Court focused, respectively, on whether the limitation period had been extended due to fraudulent concealment by the Council of the respondent’s right of action under s 28(b) of the Limitation Act 1950 (1950 Act) or by operation of the continuing breach doctrine; and on whether the Council’s conduct amounted to tortious misfeasance. [4] [ADDRESS], by a [NAME] comprising [NAME] and [NAME] [NAME], has allowed the appeal in part, setting aside the finding that the appellant

fraudulently concealed the respondent’s right of action. With the exception of the award of damages of $90,000 for loss of the value of the [ADDRESS] property, and interest on that sum in the terms set out by the High Court, the damages awarded to the respondent are set aside. [5] [RESPONDENT] [NAME] dissented. While agreeing with [NAME] that the cross-appeal should be dismissed, she would have upheld the Court of Appeal’s finding that the appellant fraudulently concealed the respondent’s right of action. She therefore would have upheld the quantum of damages awarded by the Court of Appeal. Fraudulent concealment under s 28(b) of the 1950 Act [6] [NAME] held that fraudulent concealment for the purposes of s 28(b) of the 1950 Act requires that the [NAME] either possessed actual knowledge of the essential facts giving rise to the cause of action or was wilfully blind to them at the time of the alleged concealment.1 Mere recklessness or negligence as to the existence of those facts is insufficient.2 [7] Additionally, the [NAME] must have actually known, or been wilfully blind to the fact, that those essential facts amounted to a wrongful act, and decided nevertheless to conceal them. Again, mere recklessness or negligence (here, as to wrongfulness) will not suffice.3 [8] Although attracted to the conclusion of the [NAME] in [NAME] v [COMPANY] that fraudulent concealment does not require the further element of a duty to inform or disclose the facts to the [NAME],4 [NAME] found it was ultimately unnecessary to determine that issue in this case. It therefore expressed no concluded view as to whether there is a “duty to disclose” requirement in New Zealand law.5

1 See below at [96]–[98]. 2 See below at [99]. 3 See below at [121]–[125]. 4 [NAME] v [NAME] [COMPANY] [2023] [NAME] 41, [2024] AC 679. 5 See below at [86] and [130].

[9] In the present case the Court of Appeal found that the Council had not acted with actual knowledge or wilful blindness either of the essential facts or that its actions amounted to a wrongful act. [NAME] agreed that the evidence led to that conclusion. The Council’s actions, while certainly (perhaps even grossly) negligent, did not meet the standard for equitable fraud and extension of the limitation period under s 28(b).6 [10] [NAME] [NAME] agreed with [NAME] that the word “fraud” in s 28(b) is used in the sense of equitable fraud.7 However, in agreement with the Court of Appeal, she found that unconscionable, rather than dishonest, conduct is the standard for equitable fraud for the purposes of s 28(b).8 [11] [NAME] [NAME] held that when assessing relevant conduct, the existence of a special relationship between the parties [NAME] be part of the circumstances giving rise to a finding of unconscionability, but unconscionability [NAME] also arise from conduct in circumstances where there is no special relationship.9 In a case of negligence, such as the present, the essential issue is whether, in all the circumstances of the case, blameworthiness on the part of the [NAME], above and beyond the blameworthiness inherent in the negligence, means that it would be unconscionable for the [NAME] to avail themselves of the statutory limitation defence.10 In all the circumstances of this case, the Council’s recklessness as to the existence of the essential facts giving rise to a cause of action was enough for the purposes of s 28(b).11 Continuing breach [12] [NAME] recognised three illustrative categories of breach that shape how limitation periods apply in negligence claims. First, a singular breach occurs when a one-off act or omission causes more than trivial damage, at which point the cause of action accrues and the limitation clock begins. All subsequent damage of the same kind and arising from the same breach is captured within that original cause of action

6 See below at [141]–[143]. 7 See below at [189]. 8 See below at [191]. 9 See below at [192]. 10 See below at [245]. 11 See below at [193].

but does not restart time. Damage of a distinct kind will, however, give rise to a fresh cause of action and restart time.12 Secondly, a series of episodic breaches, by contrast, involves repeated negligent acts or omissions, each giving rise to a separate cause of action when fresh damage manifests. Time runs independently for each episode, allowing recovery for losses within the limitation period even if losses of the same kind from earlier breaches are time-barred.13 Finally, a continuing breach arises where a consistent course of negligent conduct, which cannot be logically divided into discrete events, continues to cause loss of the same kind.14 In such cases, the cause of action continually refreshes so long as the breach persists and damage continues to accrue.15 However, continuing breach should not be conflated with continuing damage from a singular breach, which does not restart time.16 [13] Regardless of categorisation, however, a plaintiff will generally not be entitled to recover for damage incurred outside the limitation period—i.e., between the initial manifestation of the breach and the date six years prior to the commencement of the claim. That is of course subject to specific statutory exceptions, such as (under the 1950 Act) fraudulent concealment.17 [14] In this appeal, [NAME] considered the continuing breach principle, on which [NAME] [RESPONDENT] sought to rely, could not assist him, for the reasons given at [161]– [162]. However, also in agreement with the Court of Appeal, [NAME] found the claim for the losses arising from forced sale was within time.18 Misfeasance in a [NAME] [15] It proved unnecessary for this Court to consider in any depth the substantive legal principles of the tort of misfeasance in a [NAME].19 In agreement with the

12 See below at [149]. 13 See below at [150]–[151]. 14 See below at [152]–[153]. 15 See below at [154]. 16 See below at [152]. 17 See below at [80]–[81] and [155]. 18 See below at [170]. 19 See below at [176]–[177].

Court of Appeal, [NAME] considered those principles did not apply on the facts of this appeal.20 [NAME] therefore dismissed the cross-appeal.21 [NAME], [NAME] FRANCE, [NAME] AND [NAME] [NAME] (Given by [NAME[NAME])

Table of Contents

Para No Introduction [16] Background [21] The 1988 LUC [22[NAME] [RESPONDENT] acquires the [NAME] [25] The 2004 LIM [28] Trouble after purchase [30] The 2006 resource consent application [43] Environmental Court proceedings and discovery of the LUC [48] Forced sale and withdrawal of proceedings [52[NAME] [RESPONDENT] sues the Council [54] Legislative framework [56] High Court [58] Negligence [61] Misfeasance [63] Limitation [64] Result [68] Court of Appeal [69] Limitation: continuing breach [70] Limitation: concealment by fraud [72] Misfeasance [75] Issues on appeal [77] Limitation: was the s 28(b) exception to limitation engaged here? [78] The rationale for the s 28(b) exception [80] Submissions [83] The proper reach of s 28(b) in New Zealand law [86] A The need for knowledge of the essential facts [87] B The need for an appreciation of wrongfulness [100] C Is a duty to inform also needed? [127] D Deliberate decision to conceal? [131] Application of principles here [134] Conclusion on concealment by fraud exception [143] Limitation: was the continuing breach doctrine engaged? [144] Pleading [145] Submissions [147] Discussion [148] Conclusion on continuing breach [163] Limitation: was the loss of value distinct damage? [164]

20 See below at [178]. 21 See below at [179].

Misfeasance: was the Court of Appeal wrong to reverse the High Court’s conclusion on misfeasance?

[171] Submissions [174] Discussion [176] Conclusion on misfeasance [179] Result [180] Introduction [16] Negligence struck [NAME] [RESPONDENT] twice. First, the Whangarei District Council restricted the operation of a [NAME] he had bought, while overlooking that it had long ago granted a land use consent permitting quarrying. The Council now accepts it was wrong, and negligent. Secondly, a solicitor told [NAME] [RESPONDENT] he had no claim against the Council. By the time [NAME] [RESPONDENT] obtained better advice and issued these proceedings, the Council was able to raise a limitation defence. We now explain briefly, and then more fully,22 how this all happened. [17] In late 2004, [NAME] [RESPONDENT] purchased a 48-hectare rural property on [ADDRESS], Ruatangata, near Whangārei. It included a [NAME] from which [NAME] [RESPONDENT] intended to extract material to use in his [NAME], and for sale. Soon after settlement, however, the Council commenced efforts to prevent him from quarrying. It issued an abatement notice, saying he had neither existing use rights nor a resource consent permitting quarrying. [18] The Council’s enforcement efforts escalated in the years that followed, culminating in enforcement proceedings in the [ADDRESS]. But in the course of those proceedings, a 1988 land use consent (LUC) permitting quarrying on the property was discovered in the Council’s archives. The Council eventually withdrew its proceedings, but by then [NAME] [RESPONDENT] had been forced by his bank to sell the property. Eventually, and belatedly, he sued the Council. He claimed damages in negligence and misfeasance in a [NAME]. [19] The High Court rejected the Council’s limitation defence. The Judge found for [NAME] [RESPONDENT] in both negligence and misfeasance. He awarded damages of just over

22 Below at [21]–[54].

$4.25 million. That award was reduced slightly on appeal, the Court of Appeal rejecting the misfeasance claim.23 [20] The Council accepts it was negligent, but challenges the judgment on limitation grounds. [NAME] [RESPONDENT] cross-appeals rejection of his misfeasance claim. Central to the appeal is the question whether the Council fraudulently concealed the existence of the LUC within the meaning of s 28(b) of the Limitation Act 1950 (1950 Act). The 1950 Act applies because the relevant acts or omissions by the Council pre-dated 1 January 2011, when the Limitation Act 2010 entered into force.24 The cross-appeal focuses on whether the Council’s failure to promptly withdraw enforcement proceedings, once the LUC was discovered, amounted to misfeasance in a [NAME] for which it should be held liable. Background [21] The [NAME] of the [ADDRESS] property were a [NAME] [NAME]. They bought it from [NAME] [NAME] father in 1978. [NAME] [NAME] [NAME] had bought the property in the early 1960s. He opened a [NAME] on the property in about 1964 or 1965. The 1988 LUC [22] [NAME] [NAME] took over the property, the [NAME] was accessed and operated by a range of contractors. They included [NAME] and [NAME], trading as [NAME]. In 1988, [NAME] obtained the LUC from the Whangarei County Council, one of the Council’s predecessor entities.25 The County Council had itself obtained rock from the [NAME] in the 1980s. The LUC authorised the establishment of a commercial [NAME] to extract red [NAME] rock, with no fixed maximum output. The LUC was for a different [NAME] location within the property, but no-one suggests the distinction is material.

23 [RESPONDENT] v Whangarei District Council [2022] NZHC 1372, (2022) 23 ELRNZ 839 ([NAME[NAME]) [[NAME] judgment]; and Whangarei District Council v [RESPONDENT] [2024] NZCA 161, [2024] 2 NZLR 660 ([NAME], [NAME] and [NAME]) [[NAME] judgment]. 24 Limitation Act 1950, s 2A. 25 The Whangarei County Council was amalgamated with the Whangarei City Council, the Hikurangi Town Council and the Otamatea County Council (along with several reserve boards) in 1989 to form the newly established Whangarei District Council: “Local Government (Northland Region) Reorganisation Order 1989” (13 June 1989) 99 New Zealand Gazette 2391; and see Local Government Act First Schedule Order (No 2) 1989.

[23] The Council digitised its property records in the 1990s, but did not scan the paper file relating to the 1988 LUC. However, the existence of that file was noted in the electronic database record for the property in December 1999 and would have been apparent to any officer searching the digital record. Council officers had easy access to the physical archives if a certain file was required. The digital record was migrated to a new electronic database in September 2008, but the paper file itself was not uploaded in scanned electronic form until 2018. [24] Since granting the LUC in 1988, the Council had rated the [NAME] commercially, in addition to general rates payable on the property. It did so on the basis of the [NAME] being in commercial use, despite the objections of the [NAME]. However, at some point before 2004 the Council mistakenly began to levy the rates based on a different [NAME] on [NAME]— confusingly known as “[NAME] [NAME]”— which was owned by the Council itself. [NAME] [RESPONDENT] acquires the [NAME] [25[NAME] [RESPONDENT] had been searching for about two years for a “small-to-medium sized [NAME]” to meet the demands of his [NAME] and those of other contractors buying material from him. Such a [NAME] was not easy to come by. Fortunately for him, in 2004 the [NAME] were looking to sell, and the [ADDRESS] property was marketed as including “a metal pit for contractors”. When he visited in July or August of that year, [NAME] [RESPONDENT] was surprised by the suitability of the [NAME]. He was excited about the opportunity to integrate it into his business. [26] At the time of [NAME] [RESPONDENT]’s approach, the [NAME] appear to have been unaware of the 1988 LUC obtained by [NAME]. [NAME] told [NAME] [RESPONDENT] that a [NAME] had been operated on the land for decades without issue, and the Council clearly knew about it because it had charged commercial mineral rates for years (and continued to do so). As noted, its predecessor, the County Council, had itself used the [NAME] in the past. Similar assurances were given by the real estate agent and by local contractors familiar with the [NAME]’s history. [27] Following some negotiation as to sale price and usage of the existing stockpiled metal, [NAME] [RESPONDENT] and the [NAME] executed a sale and purchase agreement for the

property on 18 October 2004, with settlement occurring on 24 December 2004. The agreement allowed the [NAME] to retain ownership of the stockpiled material present on the site at the time of settlement. The 2004 LIM [28] In November 2004, after execution but before settlement, [NAME] [RESPONDENT]’s solicitors obtained a land information memorandum (LIM) from the Council. It did not refer to the 1988 LUC. It stated: 5: ANY PERMIT, CONSENT, CERTIFICATE, NOTICE,

ORDER

OR REQUISITION AFFECTING THE LAND OR ANY

BUILDING ON THE LAND PREVIOUSLY ISSUED BY THE

WHANGAREI DISTRICT COUNCIL:

No information applicable to this property was found. … 7: INFORMATION RELATING TO THE USE TO WHICH THE

[NAME] BE PUT AND ANY CONDITIONS ATTACHED TO

THAT USE:

No information applicable to this property has been found. … The information supplied is based on Councils existing records relating to the property. Any of these files [NAME] be inspected at the Whangarei District Council by prior arrangement. [29] The absence of an LUC did not come as a surprise to [NAME] [RESPONDENT], given the information he had obtained from [NAME] [RESPONDENT]. He said he: … relied on the Council’s obvious knowledge and acceptance of the operation of the [NAME] as reflected by the mineral rates assessment. It had obviously been operated as a commercial [NAME] for quite some time without any issue. In essence, [NAME] [RESPONDENT] proceeded on the basis he would have existing use rights to operate the [NAME], based on his discussions with [NAME] [NAME] and the commercial rates assessment the real estate agent had given him. He could not, of course, be sure that was the case: the mere fact of a commercial rates assessment did not mean he held existing use rights. That depended on the use being lawfully established by 1978, and

not having been discontinued for more than 12 months.26 So [NAME] [RESPONDENT] was taking what [RESPONDENT[NAME] described as “a calculated risk”.27 Trouble after purchase [30] Believing that commercial quarrying activity was protected by existing use rights, [NAME] [RESPONDENT] planned to [NAME] well in excess of the 500 bank cubic metres (BCM) permitted activity under r 28.6 of the 1998 Whangarei Proposed District Plan.28 While he eventually sought permission from the Council and the [NAME] to extract 40,000 BCM of [NAME] per annum (plus 10,000 BCM of overburden fill), [NAME] [RESPONDENT] indicated in cross-examination that he had initially intended to [NAME] an even larger quantity.29 [31] Following settlement, the [NAME] began removing the stockpiled material. A [NAME] complained to the Council on 1 February 2005, citing impacts on visual amenity. This prompted a Council monitoring and enforcement officer, [NAME] [NAME], to inspect the site two days later. On 4 February, [NAME] wrote to [NAME] [RESPONDENT] alleging unauthorised extraction of material in excess of the 500 BCM annual limit and requiring that quarrying activity cease in the absence of a resource consent. The letter incorrectly attributed the stockpile to [NAME] [RESPONDENT]’s [NAME], [RESPONDENT[COMPANY], referring to the fact that “some of [the company’s] plant was still on site”. [32[NAME] [NAME] returned to the property on 16 February and observed workmen “disturbing/excavating” at the [NAME] site. He recorded a “good deal of further

26 Resource Management Act 1991 [RMA], s 10(1) and (2). The 1978 date is set by the operative date of the plan. In this respect we note the fourth amended statement of claim asserted that property had been “operating as a commercial [NAME] for extracting minerals since c1982”. 27 [NAME] judgment, above n 23, at [260]. 28 [NAME] in its original state in the ground is measured in terms of “bank cubic metres” (BCM), which describes cubic metres of material in situ prior to blasting and excavation: [NAME] judgment, above n 23, at [3], n 2. “[NAME]” refers to rock or inorganic material suitable for industrial use: [NAME] & [NAME] [COMPANY] of terms used in the quarrying sector (Wellington, [NAME] 2020) at 1. 29 The lower output sought appears to have been the product of [NAME] [RESPONDENT]’s negotiations with the [NAME], from whom he also had to (and did) obtain resource consent. “Overburden” is overlying material such as clay which must be removed (“stripped”) before a mineral can be extracted; “overburden fill” refers to overburden used as “cleanfill”—i.e., uncontaminated and non-hazardous material used to fill a pit after extraction: [NAME] & [NAME] [COMPANY], above n 28, at 2–3.

activity” at the [NAME] since his earlier visit. An abatement notice followed on 21 February, issued under s 322 of the Resource Management Act 1991 (RMA). The issuing of that notice is central to the claim eventually made against the Council. The notice asserted that quarrying in excess of the 500 BCM annual limit was occurring without either resource consent or existing use rights, breaching r 28.6 of the Proposed District Plan and s 9 of the RMA. [NAME] [RESPONDENT] was advised that failure to comply with the notice might result in prosecution under s 338 of the RMA. [33[NAME] [RESPONDENT] responded on 28 February, denying having removed material from the property and explaining his arrangement with the [NAME] regarding ownership and removal of the stockpiled material.30 He sought cancellation of the notice on that basis.31 [NAME] [RESPONDENT] also advised that he had “already applied for resource consents from both [NAME]”, but added:32 While I am happy to apply for a resource consent, I find it hard to believe that the council has not issued a consent to the [NAME] as the [NAME] has been in use for 35 years that I know of, and I believe it unlikely that council would condone long-standing non-permitted quarrying for more than three decades. [NAME] have been collecting rates on it as a [NAME] all through that time. He referred to an attached rates notice charging commercial mineral rates on the [NAME], although it seems that attachment was not received by the Council.33 [34[NAME] [RESPONDENT] reiterated this position in a further letter of 3 March, also asserting existing use rights under s 10 of the RMA. In it, he sought to lodge an application for a resource consent to operate the [NAME]. [35] The Council responded on 4 March, rejecting the application as incomplete and requesting evidence of lawful establishment and continuous operation, among other information. [NAME] [RESPONDENT] then provided a letter from [NAME] [RESPONDENT] confirming

30 See above at [27]. 31 Under s 325A(4) of the RMA. 32 It appears [NAME] [RESPONDENT] had in fact only applied to the [NAME] at this stage; a separate application form for a resource consent from the Whangarei District Council was completed by [NAME] [RESPONDENT]’s agent, [NAME], on 21 February 2005, but no application was lodged with the Council until 3 March (at the earliest)—at least three days after the letter disputing the abatement notice was sent: see below at [34]. 33 See above at [24].

long-standing use and detailing [NAME] operators and output reaching as much as 20,000 BCM per annum. [36] In two further letters dated 17 and 18 March, respectively, the Council advised [NAME] [RESPONDENT] that his application to cancel the abatement notice had been unsuccessful. The Council maintained its position that his activities were unlawful and said it was yet to accept an application for resource consent from [NAME] [RESPONDENT]. It noted [NAME] did not seem to have been issued abatement notices, but: Council usually becomes involved in these issues when we receive complaints. As far as I am aware no complaints were received about [NAME]’ activities. The Council advised [NAME] [RESPONDENT] of his right to appeal the abatement notice and apply for a stay—and indeed recommended he do so and told him how to do it—but stated that in the meantime it had no discretion in the matter and was “duty bound” to enforce compliance with the District Plan. The [NAME] letter enclosed a copy of the relevant Proposed District Plan rules. [37] The Council wrote again on 28 April, noting that it had received neither a valid resource consent application nor any notice that [NAME] [RESPONDENT] had sought an appeal or a stay of the notice. It warned that any breach of the abatement notice would be met with enforcement action including the issuing of an infringement notice. It appears [NAME] [RESPONDENT] then received legal advice that the abatement notice was ineffective, and that no formal challenge was required. [38] On 12 [NAME], the Council met with [NAME] [RESPONDENT] at his property and carried out a site inspection. He was provided forms to lodge an appeal and apply for a stay of the abatement notice and advised to apply for waiver of the 15-working-day period to file an appeal. [39] On 30 [NAME], [NAME] [RESPONDENT] filed a notice of appeal to the [ADDRESS] seeking a stay or cancellation of the abatement notice. On 20 June he sought waiver of the filing period. [NAME] [RESPONDENT] was granted both waiver and stay on 4 July, the stay expiring on 30 September 2005. The stay was later extended to 15 November by Judge Newhook on the basis that [NAME] [RESPONDENT]’s counsel had advised his amended

resource consent application would be ready by about that date, there having been delays due to the unavailability of various consultants. By the expiry of the stay [NAME] [RESPONDENT] had still not lodged an application. But, in the meantime, the Council had become aware of a defect in the abatement notice requiring its withdrawal.34 That proceeding came to an end. [40] At a meeting on-site on 3 October, [NAME] [RESPONDENT] again raised the commercial rating issue he had raised on 28 February. [41] The Council issued fresh abatement notices to [NAME] [RESPONDENT] and [RESPONDENT[COMPANY] on 16 November 2005. In a letter to the Council dated 20 December, [NAME] [RESPONDENT] seemed to acquiesce to the Council’s position that there was no resource consent, referring a number of times to his waiting for such a consent to be granted. But he maintained his position on existing use rights, saying: In the meantime, I believe that because the continuous use of the [NAME] by private [NAME] (and [NAME] from time to time) predates the Resource Management Act there is an existing use under Section 10 of the Resource Management Amendment Act 1993. … In levying rates on the property as a [NAME], the Whangarei District Council has acknowledged the existence and the use of this [NAME] for at least 35 years The letter did not claim, nor provide any evidence, that any formal permission had been granted to undertake quarrying activity. For the bulk of the period of the [NAME]’s operation—from about 1964 until 1988—it seems there was no permission. The Council’s position was that the claim of existing use rights was unsupported by evidence, and it was for [NAME] [RESPONDENT] to establish them. It did however investigate the rating information, which proved inconclusive.35 [42] The November abatement notices were followed by a series of infringement notices issued by the Council on 22 December 2005, 26 January 2006 and 14 February 2006. [NAME] [RESPONDENT] queried these actions, maintaining his position that he was lawfully entitled to operate the [NAME]. He advised that he had experienced delays in the preparation of his resource consent application but that it would be lodged in due

34 The notice had been directed to the property neighbouring [NAME] [RESPONDENT]’s by mistake. 35 See below at [44].

course. On 8 March 2006, Council officers executed a search warrant on [NAME] [RESPONDENT]’s property accompanied by two police [NAME]. The 2006 resource consent application [43] The Council received [NAME] [RESPONDENT]’s updated resource consent application, seeking permission to [NAME] up to 40,000 BCM per annum, on 24 March 2006.36 The application was required to be publicly notified, and was set down for hearing by the Council’s [NAME] on 28 November 2006. The Council’s [NAME] opposed the application in his written report and at the hearing. As we note later, [NAME[NAME] concluded that loss first arose on 15 September 2006.37 [44] Throughout this period the Council had also investigated the rating information presented by [NAME] [RESPONDENT]. At this point the error referred to earlier was uncovered: the rating information [NAME] [RESPONDENT] had been relying on related to a different [NAME] on [NAME], rather than his [NAME]—a mistake apparently made by [NAME].38 On 1 November 2006 a Council officer, [NAME] [RESPONDENT], met with [NAME] [RESPONDENT]’s planners. His file note recorded that they: … agreed, reluctantly, that [NAME] [NAME] was not [RESPONDENT]’s [ADDRESS] [NAME], and they queried whether or not council had [RESPONDENT]’s property’s [NAME] records available. I advised them that they would need to determine this, as neither council nor [NAME] appeared to have such records. [[NAME] [NAME], a [NAME],] mentioned that they [NAME] seek an adjournment for the hearing due to the revelation that the [RESPONDENT] & [NAME] quarries were not the same, but I advised them that the consent should be heard on its merits and not over the question of existing use. [45] The Council reminded [NAME] [RESPONDENT] that any existing use rights would depend instead on proof that the [NAME] had been lawfully established before 1978 and had not thereafter stopped operating for any period exceeding 12 months.39 [NAME] [RESPONDENT]’s

36 The original application was for 50,000 BCM, but this was reduced to 40,000 BCM including [NAME] at the hearing. 37 See below at [64]. As the Court of Appeal noted, that conclusion was not disputed: [NAME] judgment, above n 23, at [27]. 38 See above at [24]. 39 See above at [29].

application for resource consent was then refused on 2 February 2007.40 In the reasons for its decision, the [NAME] said: No resource consent currently exists for quarrying activities on the site and no written confirmation of any existing use rights under section 139A of the Act has been issued by the Council. [46] Following that decision, on 12 February 2007, the Council sent [NAME] [RESPONDENT] a letter directing that he “cease operation of the [NAME] forthwith” or otherwise face enforcement proceedings in the [ADDRESS]. Between October 2007 and November 2008, the Council issued a further three abatement notices. [47] During this time, official information requests made on behalf of [RESPONDENT[COMPANY] for information relating to the property did not uncover the original LUC.41 It would appear the Council did not search its historic paper records before responding to these requests, though it invoiced [RESPONDENT[COMPANY] for four hours of staff time. Requests for cancellation of the abatement notices were also refused; instead, a further infringement notice was issued on 5 March 2009. [ADDRESS] proceedings and discovery of the LUC [48] On 31 July 2009, the Council filed proceedings in the [ADDRESS] seeking an enforcement order against [NAME] [RESPONDENT] and his company. Around the same time, [NAME] [RESPONDENT] was facing pressure from his bank to sell the property due to cashflow and debt servicing issues. [49] In the course of those proceedings, [NAME] [RESPONDENT]’s solicitors sought, and then searched, the Council’s physical records relating to the property. On 22 September 2009, the hardcopy file containing the 1988 LUC was finally uncovered by [NAME] [RESPONDENT]’s solicitors. [50] The Council did not immediately withdraw the proceeding, but agreed to vacate the hearing and seek an adjournment with an undertaking to report to the Court

40 A separate consent was granted by the [NAME] and issued on 5 March 2007. 41 [NAME] [RESPONDENT] gave evidence that various [NAME] advisors engaged by him had already requested such information on multiple occasions from 2004–2007, but no documentation to that effect appears to have been discovered.

by 30 October 2009. On 15 October 2009, the abatement and infringement notices were withdrawn, and outstanding debts for infringement fees arising from those notices were cancelled. [51] The Council proposed to conclude the enforcement proceedings by way of an enforcement order made on agreed terms. [NAME] [RESPONDENT]’s position was that no order would be agreed to, there being no proper basis for enforcement action. He was prepared to negotiate terms on which quarrying could proceed, but those negotiations stalled. In particular, the Council insisted the LUC only allowed quarrying of red, not blue, rock. On 22 January 2010, the Council wrote to [NAME] [RESPONDENT]’s lawyer threatening to continue the enforcement proceedings (or, alternatively, seek a declaration as to [NAME] [RESPONDENT]’s rights) in the absence of agreement.42 Forced sale and withdrawal of proceedings [52] The property was ultimately sold in a forced sale to [COMPANY] ([NAME]) at a nearly 25 per cent discount from the estimated market price.43 The agreement for sale and purchase was signed on 2 December 2009—just one day before the bank’s scheduled mortgagee sale—with [NAME] taking title in or around February 2010. On 30 [NAME] 2011, the Council granted [NAME] a variation to the LUC (on a non-notified basis) that authorised the annual removal of 50,000 BCM of material from the property.44 [53] The Council withdrew the enforcement proceedings against [NAME] [RESPONDENT] and his company a short time later, in early July 2011. [NAME] [RESPONDENT] sues the Council [54[NAME] [RESPONDENT] commenced proceedings against the Council on 14 August 2015, just within six years of the 22 September 2009 disclosure. We note two points. First, the delay is attributed to earlier legal advice that he had no cause of action against

42 Declaration procedures are provided for in s 311 of the RMA. 43 [NAME] judgment, above n 23, at [555]. 44 The 1988 LUC only allowed removal of red [NAME] rock from the area defined in the consent documentation. The variation granted to [NAME] removed these limits, allowing removal of rock “inclusive of blue, red or [NAME] rock” at “any location on the site” provided it was at least 20 metres from the boundary.

the Council. That advice led to a claim against the [NAME], which was settled before [NAME]. Secondly, to state the obvious, the proceedings were issued well outside the six-year period from the time the Council’s negligence caused loss to accrue. That dated back to September 2006—so a battle over limitation became inevitable.45 [55] The present appeal and cross-appeal are confined to questions of limitation and misfeasance. It is common ground that the Council’s failure to search its records was negligent and that had it disclosed the 1988 LUC earlier, much of the loss suffered by [NAME] [RESPONDENT] would have been avoided. Legislative framework [56] Before summarising the decisions of the Courts below, it will be helpful to set out the key provision of the 1950 Act in issue. That Act applies because of the timing of the Council’s negligent acts or omissions.46 It has since been replaced by the Limitation Act 2010 (2010 Act), but the new legislation does not apply to this case. [57] The provision in question is s 28(b) of the 1950 Act, but we will set out the whole of s 28 here: 28 Postponement of limitation period in case of fraud or mistake Where, in the case of any action for which a period of limitation is prescribed by this Act, either— (a) the action is based upon the fraud of the [NAME] or his agent or of any person through whom he claims or his agent; or (b) the right of action is concealed by the fraud of any such person as aforesaid; or (c) the action is for relief from the consequences of a mistake,— the period of limitation shall not begin to run until the plaintiff has discovered the fraud or the mistake, as the case [NAME] be, or could with reasonable diligence have discovered it: Provided that nothing in this section shall enable any action to be brought to recover, or enforce any charge against, or set aside any transaction affecting, any property which—

45 As to the date of accrual of loss, see below at [64]. 46 See above at [20].

(d) in the case of fraud, has been purchased for valuable consideration by a person who was not a party to the fraud and did not at the time of the purchase know or have reason to believe that any fraud had been committed; or (e) in the case of mistake, has been purchased for valuable consideration, subsequently to the transaction in which the mistake was made, by a person who did not know or have reason to believe that the mistake had been made. High Court [58] As noted earlier, [NAME] [RESPONDENT] issued proceedings in the High Court on 14 August 2015, just within six years of the date on which the LUC came to light. Three causes of action were pleaded: breach of statutory duty, negligence, and misfeasance in a [NAME].47 [59[NAME] [RESPONDENT] claimed loss of earnings, the loss of a valuable business operation (including goodwill and royalties), a reduction in the sale price of the property and costs incurred in resisting enforcement action.48 The claimed losses totalled $20,945,891 plus interest, costs and exemplary damages.49 [60] The Council denied the claims almost entirely. It accepted it was negligent in some respects but disputed the duties alleged, denied it had misled [NAME] [RESPONDENT], and asserted a limitation defence under the 1950 Act.50 It pleaded that the losses claimed were speculative or exaggerated and that any damage was the result of the appellant’s own contributory negligence,51 or of third-party conduct, including that of his solicitor.52 Negligence [61] [COUNSEL[NAME] held that the Council owed duties of care, additional to its statutory obligations under the RMA, to keep resource consent records reasonably available for

47 The breach of statutory duty claim was however rejected by [NAME[NAME] on the basis that careless performance of a statutory duty is not recognised as an independent tort: [NAME] judgment, above n 23, at [140]–[141]. It was not pursued on appeal, and we need not discuss it further. 48 At [15]. 49 At [16]. 50 At [17] and [351]. See above at [20]. 51 See at [252]–[265]. 52 At [20], [346(f)] and [567].

inspection and provide information about them with reasonable care and skill, and to undertake reasonably diligent inquiries into the existence of such records when that was in issue.53 The Judge found these duties had been breached continuously from November 2004, when an erroneous LIM was issued, until the discovery of the LUC in September 2009.54 Specific breaches included failures to conduct adequate searches before issuing the February 2005 abatement notice, in processing the 2005 and 2006 resource consent applications, when opposing the 2006 application, and in issuing subsequent notices and enforcement proceedings.55 The Judge found these breaches to be the real and effective cause of loss, comprising lost profits from the inability to establish a commercial [NAME], loss of property value, and direct costs in resisting enforcement.56 The lost profits were calculated on the basis of the revenue the [NAME] would have generated had [NAME] [RESPONDENT] been able to commercially exploit the available mineral resource from 2006–2017.57 [62] The Council’s claim of contributory negligence was rejected,58 though [RESPONDENT[NAME] held that [NAME] [RESPONDENT] was not entitled to recover twice where sums recovered from his [NAME] solicitor included compensation for losses covered by the award of damages against the Council.59 Misfeasance [63] [[NAME] decision in [NAME] v Attorney-General held that the tort of misfeasance in a [NAME] is made out where a public officer, in the purported exercise of public powers but deliberately or recklessly acting beyond the limits of those powers, causes harm to the plaintiff intentionally, knowingly or with reckless indifference.60 [NAME[NAME] found that Council officers had been wilfully blind to the LUC’s potential existence, and had acted recklessly in assuming the consent did not exist, despite evidence to the contrary, and in failing to make proper inquiries at

53 At [22] and [185]. 54 At [23], [214], [230]–[231] and [241]. 55 At [23] and [230(b)]. 56 At [24], [275] and [566]. Claims for loss of goodwill and of the value of the business itself were disallowed: at [25] and [553]–[554]. 57 See at [542]. The ultimate figure accounted for operating costs, annual overheads, debt servicing costs and a broad reduction for contingency and risk: at [543]–[550]. 58 At [26] and [275]. 59 At [567]. 60 Garrett v Attorney-General [1997] 2 NZLR 332 ([NAME]) at 344.

relevant times.61 The continuation of the Council’s “stubbornly obstructive attitude” toward [NAME] [RESPONDENT] even after the discovery of the LUC tipped the scales in favour of an award of exemplary damages, despite a lack of actual malice on the part of Council officers.62 Limitation [64] The Council argued that the causes of action accrued more than six years before proceedings were filed and were barred by s 4 of the 1950 Act.63 [NAME[NAME] accepted that accrual of a cause of action depends (in part) on the date of damage, and is an occurrence-based, not a knowledge-based, concept.64 He found that damage occurred in September 2006 when the Council required [NAME] [RESPONDENT]’s 2006 consent application to be publicly notified and then opposed it on the incorrect ground that no consent existed.65 However, the Judge found that the breaches of duty and resulting losses were continuous from 15 September 2006 until July 2011, when enforcement proceedings were finally withdrawn.66 The claim was therefore within time under conventional accrual principles.67 [65] In the alternative, [NAME[NAME] held that s 28(b) of the 1950 Act applied.68 He accepted that the provision postponed the running of time where the [NAME]’s conduct amounted to “fraudulent concealment” in equity—emphasising that “fraud” in this context did not require deceit in the common law sense but encompassed conduct unconscionable in equity, including reckless disregard of another’s rights.69 [66] The Judge found that the Council’s conduct met this standard: it had “recklessly and without taking the least trouble to verify the facts assumed … that

61 [NAME] judgment, above n 23, at [331] and [342]. 62 At [342]. 63 At [351]. 64 At [353]–[354]. 65 At [237] and [355]. 66 At [378]. 67 At [376]–[380] citing [NAME] v [NAME] ([NAME]) [COMPANY] [1977] 1 NZLR 394 ([NAME]) at 424 per [NAME], Mount Albert Borough Council v [NAME] [1979] 2 NZLR 234 ([NAME]) at 239 per [NAME], and Williams v Attorney-General [1990] 1 NZLR 646 ([NAME]) at 678–679 per [NAME] dissenting (but not on this point). 68 At [393]–[400]. 69 At [394]–[397] citing [NAME] v [NAME] (a [NAME]) [1973] 1 WLR 29 ([NAME]) at 33– 34 per [NAME] [NAME[NAME]; and [NAME] v [COMPANY] [1949] 1 [NAME] 550 ([NAME]) at 565–566 per [NAME] [NAME[NAME].

there was no resource consent”.70 It did not matter that the Council had no “dishonest motive”; it should have made a reasonable search of its records to establish whether a consent existed.71 The Judge added, in concluding, that:72 It would be wrong to allow the Council to benefit from the expiry of the limitation period when it had been responsible for the state of affairs that led to [NAME] [RESPONDENT]’s ignorance of the [NAME] position. [67] It followed that even if the causes of action had otherwise accrued more than six years before filing, the limitation period did not begin to run until 22 September 2009, when the LUC was discovered. As the proceeding was commenced (just) within six years of that date, [NAME[NAME] held that the claims were not statute-barred.73 Result [68] The Judge found for [NAME] [RESPONDENT], awarding $4,089,622 for loss of profits,74 $90,000 for the Council’s contribution to the reduced property value,75 $50,000 for the direct costs of addressing the consequences of the Council’s negligence,76 interest to judgment77 and $50,000 in exemplary damages for misfeasance.78 Court of Appeal [69] On appeal, the Council accepted liability in negligence in principle but challenged the High Court Judge’s conclusions on limitation (including concealment by fraud) and misfeasance.79 The only live issues in respect of negligence were limitation and the extent of recoverable loss.

70 At [396] quoting, in part, [NAME] v [COMPANY], above n 69, at 565 per [NAME[NAME]. 71 At [396] referring to the expression used by [NAME] [NAME[NAME] in [NAME] v [NAME], above n 69, at 34. 72 At [399]. 73 At [400]. 74 At [550]. 75 At [559] and see at [555]. 76 At [563]. 77 At [565]. The rate of interest was set at five per cent. 78 At [345]. 79 [NAME] judgment, above n 23, at [9].

Limitation: continuing breach [70] [[NAME] held that the High Court Judge had misconstrued the principle of continuing breach.80 It reaffirmed that, where a tort is actionable on proof of damage, a continuing cause of action arises only from repeated acts or omissions of the same kind producing new loss within the limitation period. Time does not restart merely because losses from an earlier breach continue to accrue.81 Successive actions [NAME] lie for each accrual of fresh damage, but damages cannot be recovered for breaches occurring outside the limitation period.82 [71] Applying that framework, the Court found no pleaded or proved breach of duty after 14 August 2009.83 The statement of claim alleged only failures occurring before that date, with later matters framed as continuing injury and evidence of bad faith, not as fresh breaches of the relevant duty.84 Losses from lost profits and enforcement costs were of the same kind as those suffered earlier, and therefore out of time; the only distinct loss within the six-year limitation period was the $90,000 diminution in value on the December 2009 forced sale.85 Limitation: concealment by fraud [72] Turning to the issue of concealment by fraud of a right of action, the Court of Appeal agreed with the High Court that “fraud” in s 28(b) of the 1950 Act encompasses equitable fraud, including wilful concealment and recklessness,86 but emphasised that both require a subjective element. For wilful concealment, the [NAME] (or their agent) must, at minimum, have known the essential facts comprising the cause of action and decided not to disclose it.87 For recklessness, he or she must have appreciated there was a real risk the material information existed and decided not to

80 At [82]. 81 At [83] citing [NAME] v [NAME] Co [COMPANY] [2023] [NAME] 16, [2024] AC 595 at [26] and [37]. 82 At [84] citing [NAME] “Discharge of Liability” in [NAME] and others (eds) [NAME] on Torts (9th ed, Thomson Reuters, Wellington, 2023) 1537 at 1562–1563, and [NAME] v [NAME], above n 81, at [32]. 83 At [86]. 84 At [86]. 85 At [87]–[88]. 86 At [111], [141] and [149]. 87 At [111]–[113].

investigate further.88 Corporate or constructive knowledge, or mere carelessness, is insufficient.89 [73] On the facts, the Court identified the principal “material fact” here as the existence of the LUC.[ADDRESS] accepted that Council officers knew that they had statutory and common law obligations to search and disclose records when enforcement action was contemplated, and that the existence or otherwise of a consent was central to the question of the lawfulness of [NAME] [RESPONDENT]’s activities.91 Given the accumulation of information pointing to the possibility of an historic consent— including correspondence, rating history and the long-standing presence of the [NAME]—the Court concluded the officers were subjectively reckless: they recognised the real possibility that a consent existed yet chose not to search the historic files, instead relying on the absence of any consent notation in the LIM.92 This was unconscionable conduct for the purposes of equitable fraud. Time did not therefore start to run on the claim until the disclosure of the LUC in September 2009.93 [74] [[NAME]’s reasoning here differed from the High Court decision in two respects: it insisted on a subjective awareness of risk, and it treated that requirement as satisfied on the evidence. In the Court of Appeal’s view, the High Court Judge erred in treating corporate knowledge as sufficient for the purposes of establishing fraud, and in inferring recklessness from certain evidence which could not sustain such a finding.94 The result was, however, the same: the Council’s limitation defence failed. Misfeasance [75] [[NAME] held that the recklessness found for s 28(b) purposes—as to the existence of the 1988 LUC—could not simply be “repurposed for the

88 At [115]–[116]. See also at [164]–[178]. 89 At [115], [138] and [164]. 90 At [151]. [ADDRESS] also acknowledged that knowledge of historic use tending to indicate the existence of existing use rights might be relevant: at [169]. But this was not the focus as [NAME] [RESPONDENT] did not plead this point: at [152]. 91 At [148] and [150]–[151]. 92 At [168]–[178]. 93 At [178]. 94 At [164]–[167]. [NAME] judgment, above n 23, at [396]–[399].

misfeasance claim”.95 Misfeasance required reckless indifference by an officer to the limits of their lawful authority and to the consequences of their actions for the plaintiff.[ADDRESS] considered the failure to keep the LUC reasonably available when it was archived was “too remote to amount to subjective recklessness with respect to [NAME] [RESPONDENT]”, and there was in any case no evidence of the subjective knowledge of Council officers responsible for archiving at that time.97 Further, while it accepted that officers had been reckless in respect of the existence of the LUC, that did not extend to recklessness regarding their lawful authority to take enforcement action.98 On that basis, the High Court’s finding as to misfeasance was set aside, along with the exemplary damages award.99 [76] [ADDRESS] added two points for completeness. First, even if misfeasance had been established, it did not consider an award of exemplary damages was necessary to sanction the Council, given the already substantial award of compensatory damages.100 Secondly, although the Council should have immediately withdrawn the enforcement proceeding and apologised to [NAME] [RESPONDENT] once the LUC came to light, the Court considered the High Court Judge attached too much significance to its failure to do so.101 By that stage, matters were in the hands of solicitors rather than Council officers, and the decision to put the proceeding on hold was a pragmatic one, made to prevent quarrying in the interim and on the basis that [NAME] [RESPONDENT] “had no ongoing exposure”.[[NAME] therefore did not consider this factor should have tipped the scales in favour of awarding exemplary damages. Issues on appeal [77] The issues on appeal are four: (a) Limitation: was the s 28(b) concealment by fraud exception to limitation engaged here?

95 [NAME] judgment, above n 23, at [181]. 96 At [181] citing [NAME] v Attorney-General, above n 60, at 349–350. 97 At [183]. 98 At [183]. 99 At [184] and [187]. 100 At [185]. 101 At [186]. 102 At [186].

(b) Limitation: was the continuing breach doctrine engaged? (c) Limitation: was the loss of value distinct damage? (d) Misfeasance: was the Court of Appeal wrong to reverse the High Court’s conclusion on misfeasance? The dominant issue in argument was the first one. The [NAME] issue arose as a further argument by [NAME] [RESPONDENT] supporting the judgment under appeal. Limitation: was the s 28(b) exception to limitation engaged here? [78] Section 4 of the 1950 Act provided that an action in tort must be brought within six years of the date of accrual. Limitations statutes of this kind have existed since the early 17th century. [[NAME] discussed the rationale for such statutes in its judgment, and we need not add to that discussion here.103 It is sufficient to record that they involve selection of a simple rule to encourage the bringing of claims with expedition, to discourage the dredging up of ancient claims and use of stale evidence, and to defray risk in markets for services that entail risk.104 As the Court of Appeal concluded:105 Seen in this light, fixed limitation periods serve a public interest in timely and effective adjudication. They also ensure that cases are decided according to the legal mores of the era in which the wrong was done. [79] Most simple rules attract less simple exceptions. Section 28(b) of the 1950 Act is one such exception. We set s 28 out above at [57], but for ease of reference, we now repeat s 28(b) here, with relevant contextual language: Where, in the case of any action for which a period of limitation is prescribed by this Act, … (b) the right of action is concealed by the fraud of [the [NAME] or his agent or of any person through whom he claims or his agent]; …

103 At [99]–[103]. We adopt the historical account given at [99]–[107] of the [NAME] judgment, above n 23. 104 [NAME] v [NAME] (a [NAME]) [2002] UKHL 18, [2003] 1 AC 384 at [6] per [NAME] [NAME]. [[NAME] instanced insurance and [NAME] services: [NAME] judgment, above n 23, at [102] citing [NAME] v [NAME] [COMPANY] [2023] [NAME] 41, [2024] AC 679 at [152]. 105 [NAME] judgment, above n 23, at [102].

the period of limitation shall not begin to run until the plaintiff has discovered the fraud or the mistake, as the case [NAME] be, or could with reasonable diligence have discovered it: … The rationale for the s 28(b) exception [80] The bar in s 4 was a blunt instrument, as the Court of Appeal observed.106 That choice was deliberate: the drafting process for the Limitation Act 1939 (UK) (1939 UK Act)107— largely uplifted and adopted here as the 1950 Act108—rejected more nuanced, laches-like options, favouring certainty over case-by-case consideration of merit and excuse.109 [81] To that blunt time limit, s 28 offered the exception set out above in instances where the claim itself is based on fraud or mistake, or where the right of action is concealed by the fraud of the [NAME] or their agent. The critical points, as the words of the provision make clear, are two: (1) that what has been concealed is the right of action, and (2) that the concealment is fraudulent. As we will see, the act of fraudulent concealment [NAME] be contemporaneous with the cause of action, or it [NAME] postdate it.110 Either will fall within s 28(b). [82] It is common ground that “fraud” here is not just the more egregious common-law species of that doctrine. It encompasses equitable fraud also.111 This was so before the 1939 UK Act, and it remained so after its enactment, and that of the 1950 Act.112 One species of equitable fraud was the concealment of wrongdoing. Equity had no statutory limitations framework, relying instead on the more nebulous doctrine of laches, although eventually coming to apply the statutes by analogy.113 It would not do so, however, in cases where the claim was based on fraud,

106 At [100]. 107 Limitation Act 1939 (UK) 2 & 3 Geo VI c 21 [1939 UK Act]. 108 See Limitation Bill 1950 (59-1) (explanatory note) at [2]. 109 [NAME] (Statutes of Limitation) (Cmd 5334, December 1936) at [7]. 110 [NAME] v [COMPANY], above n 69, at 559 per [NAME[NAME]. Relevant concealment is unlikely to pre-date the right of action. 111 As to equitable fraud, see [NAME] and [NAME] [NAME]’s Equity: Doctrines and Remedies (5th ed, LexisNexis Butterworths, Sydney, 2015) at [12-005] and following; and [NAME] of Actions in Equity ([NAME], London, 1932) at ch 2 and, in particular, 38–40. 112 [NAME] of Actions ([NAME], London, 1959) at 201–203. 113 Bulli Coal Mining Co v Osborne [1899] AC 351 (PC) at 363; and [NAME] of Limitation (2nd ed, LexisNexis, Chatswood (NSW), 2021) at [15.2]– [15.8].

or where the claim had been concealed by fraud.114 It was accepted before us that the 1939/1950 Acts were essentially intended to encapsulate the pre-legislation case law excepting the limitation bar in the case of fraudulent deception, both confirming the transposition of the equitable doctrine across to cases in common law and clarifying its reach.115 Submissions [83] We have set out the Court of Appeal’s reasoning at [72]–[74] above. Its essence was that subjective appreciation by Council officers of the real possibility of an LUC existing, combined with a deliberate decision not to look for it, was subjectively reckless and unconscionable. It amounted to fraudulent concealment for the purposes of s 28(b). [84] For the Council, [NAME] [COUNSEL] [NAME] submits that equitable fraud exists for the purposes of s 28(b) only when a [NAME] wilfully conceals a plaintiff’s right of action. The leading New Zealand authority, prior to the decision appealed, is that of the Court of Appeal in [COMPANY] v [COMPANY].116 We apprehend [NAME] [NAME] submission as being that the test articulated in that decision (and two prior High Court decisions) is as follows:117 (a) the [NAME] must have known the essential facts comprising the right of action; (b) the [NAME] must also have appreciated (in light of the known facts) that he or she had committed a wrongful act such that they were aware of the right of action and could have disclosed it;

114 [NAME] v [NAME] of Warrington (1714) 4 Bro PC 163, 2 ER 111 (HL). 115 [NAME], above n 109, at [22]; [NAME] v [COMPANY], above n 104, at [39]; and [NAME], above n 113, at [15.8]. The application of the equitable rule to common-law cases was confirmed by [NAME[NAME] in Lynn v Bamber [1930] 2 [NAME] 72 ([NAME]). 116 [COMPANY] v [COMPANY] [2010] NZCA 631. 117 [COMPANY] v [NAME]) [COMPANY] [1979] 2 NZLR 700 (SC); and [COMPANY] v [NAME] [1989] 1 NZLR 525 ([NAME]).

(c) the [NAME] must have owed a duty to the plaintiff (whether a fiduciary duty or some other special relationship) to disclose the material facts; and (d) having knowledge of all the foregoing, the [NAME] must have failed to disclose his or her wrongful act with the result that it was concealed “by means that would attract the epithet ‘wilful’ or deliberate’”. [85] For [NAME] [RESPONDENT], [NAME] submits that the approach taken by the Court of Appeal below was correct. English authority under the 1939 UK Act was directly relevant. He submits three [NAME] in particular support the proposition that recklessness [NAME] amount to fraudulent concealment: [NAME] v [COMPANY], [NAME] v [NAME] and [NAME] v [NAME] (a [NAME]).118 The proper reach of s 28(b) in New Zealand law [86] In considering the proper reach of s 28(b), we now address the four elements identified by [NAME] [NAME] at [84] above. They are the need for knowledge of the essential facts, the need for an appreciation of wrongfulness (and the place of recklessness in that appreciation), whether the deception must also involve breach of a duty to disclose and whether a deliberate decision to conceal must be shown. Here, the first two elements prove decisive. A The need for knowledge of the essential facts [87] What s 28(b) requires is concealment of a right of action. Inherent in this is knowledge of the facts constituting that right of action. In [NAME] v [NAME]—an English building case we discuss in more detail later in this judgment—the view of the Court of Appeal was that the English equivalent of s 28(b) was inapplicable where a [NAME] ought to have known of the facts constituting the right of action, but did not in fact know them.119 That conclusion is a logical one, at least. Extension of the standard limitation period is only justified by the unconscionable

118 [NAME] v [COMPANY], above n 69; [NAME] v [NAME] [1958] 1 WLR 563 ([NAME]); and [NAME] v [NAME], above n 69. 119 [NAME] v [NAME], above n 69, at 33–34 per [NAME] and 36 per [NAME] LJ.

non-disclosure (or active concealment) of facts constituting the right of action. Logically, that depends on the [NAME] knowing those facts. Where, otherwise, is the unconscionable act? [88] The requirement for knowledge of the essential facts in New Zealand was expressed firmly by [NAME] in [COMPANY] v [NAME]) [COMPANY].120 He observed that s 28(b) covered causes of action other than fraud, and a limitation defence would be excluded (for the appropriate period) either where there was dishonest concealment of the cause of action, equivalent to common law fraud, or non-disclosure occurring in such circumstances as to amount to equitable fraud. In either case, he said, the concealment must be wilful and “[t]he [NAME] must know all the facts which together constitute the cause of action.”121 [89] The same approach was taken by [NAME] in [COMPANY] v [NAME]:122 … the failure to disclose must be wilful. One cannot conceal something of which one is unaware. … For the concealment to be wilful the [[NAME]] must be shown to have known the essential facts constituting the cause of action. It is after all the right of action which must be concealed by the fraud of the [NAME]. In that case, [NAME] found no evidentiary basis on which to conclude the [NAME] receiver knew he had committed a wrong in dealing with the assets—in the sense he apprehended both negligence and loss arising—such that failure to disclose could be called an equitable fraud.123 In any event, the receiver had “faithfully observed” his statutory duties and filed his reports: “From these it either was or ought to have been patent to the directors and shareholders what the financial course of the receivership was.”124 [90] The reasoning in [NAME] and [NAME] received explicit approval from the Court of Appeal in [COMPANY] v [COMPANY].125 The case [NAME] a failed forestry venture in which the promoters’ agent, [COMPANY], had certified the

120 [COMPANY] v [NAME] ([COMPANY], above n 117. 121 At 711. 122 [COMPANY] v [NAME], above n 117, at 536. 123 At 540. 124 At 540. 125 [COMPANY] v [COMPANY], above n 116, at [54]–[55] and [58].

suitability of a block and advised as to something called its “site index”, which was indicative of its growth and revenue potential. The claim alleged that these were relied upon in entering the investment, that [NAME] became aware neither was [NAME], and concealed that fact. Limitation was pleaded, and the [NAME] sought to rely on s 28(b). It was in that context that [NAME] observed, for the Court of Appeal, that “a duty to disclose can arise only if a relevant person knows those facts”.126 The focus of s 28(b) is on “knowledge of relevant facts and on knowledge of a duty to disclose them”.127 If those facts are established, “the concealment will indeed be wilful”.128 [91] This approach is consistent also with English authority on the 1939 UK Act— on which the 1950 Act was, of course, based. We have referred already to [NAME] v [NAME], and will return shortly to it in the next section. There the point was made clearly by [NAME] [RESPONDENT[NAME]:129 If the [NAME] was, however, quite unaware that he was committing a wrong or a breach of contract, it would be different. So if by an honest blunder he unwittingly commits a wrong (by digging another man’s coal), or a breach of contract (by putting in an insufficient foundation) then he could avail himself of the Statute of Limitations. [92] It was applied also by the [NAME] of Lords in [NAME] v [NAME] (a [NAME]) in 2002.130 By then the 1939 UK Act had been reformed: the Limitation Act 1980 (UK) (1980 UK Act) modified the [NAME] equivalent of s 28 so that limitation was postponed where “any fact relevant to the plaintiff’s right of action has been deliberately concealed from him by the [NAME]”.131 As [NAME] [RESPONDENT] said, the reference to concealment “by … fraud” in the 1939 UK Act “was an inapt and inelegant expression which caused much difficulty. It put the emphasis on the fraud rather than the concealment.”132 The amended wording in the 1980 UK Act clarifies that concealment is the point of focus, and that it must be deliberate—although that was surely also the case under the earlier legislation, properly construed.133

126 At [41]. 127 At [47]. 128 At [47]. 129 [NAME] v [NAME], above n 69, at 34. 130 [NAME] v [NAME], above n 104. 131 Section 32(1)(b). Compare 1939 UK Act, s 26(b); and see Limitation Amendment Act 1980, s 7. 132 [NAME] v [NAME], above n 104, at [19]. 133 See above at [87] and [91]. As to the mischief addressed by the reform, see [NAME] v [NAME], above n 104, at [19] per [NAME] [NAME].

[93] In [NAME] the [NAME] had to consider an earlier decision of the Court of Appeal which had held, in an ordinary case of solicitors’ negligence (not involving intentional wrongdoing), that it was sufficient for time to be extended that the [NAME] had deliberately committed an act amounting to negligence, without it also being necessary that the solicitor appreciate that his (or her) act gave rise to a breach of duty.134 The effect of that decision, [NAME] [NAME] said, was:135 … to deprive a [NAME], charged with having given negligent advice and who denies that his advice was wrong let alone negligent, of any effective limitation defence. However stale the claim, he must defend the action on the merits, for he will not have the benefit of a limitation defence unless he can show that his advice was not negligent. This subverts the whole purpose of the Limitation Acts. [94] The [NAME] held, ultimately, that the legislation does not deprive a [NAME] of a limitation defence against a claim of negligence “if, being unaware of his error or that he has failed to take proper care, there has been nothing for him to disclose”.136 [95] [NAME] was applied recently by the [NAME] in [NAME] v [COMPANY].137 That [NAME] a retail lending agreement under which the [NAME] also took out repayment insurance. It transpired that over 95 per cent of the premium was commission payable to the [NAME], a fact that subsequently gave rise to a right to claim based on unfairness under credit legislation. The Supreme Court held the [NAME] had deliberately concealed a fact relevant to the plaintiff’s right of action, making a conscious decision not to disclose the commission.138 And while, in doing so, it held the [NAME] need not apprehend how the facts were relevant to the right of action, it nonetheless had to have deliberately ensured the facts were withheld from the plaintiff: [redacted] have considered whether to inform the claimant of the relevant fact and decided not to”.139 To state the obvious, that presupposes the [NAME] was acquainted with the essential fact or facts not conveyed.

134 [NAME] v Armitage & Guest (a [NAME]) [2002] 1 WLR 598 ([NAME]) at 605 per Morritt LJ. 135 [NAME] v [NAME], above n 104, at [15]. 136 At [25] per [NAME] [NAME]. See also at [58]–[60] per [NAME] [NAME]. 137 [NAME] v [COMPANY], above n 104. 138 At [154] and [156]. 139 At [105] and [108].

[96] As we noted earlier, extension of the limitation period is only justified by the unconscionable non-disclosure of facts constituting the right of action. Logically, the unconscionable aspect must depend on the [NAME] knowing those facts. Absent such knowledge, there is no deliberate concealment, and no unconscionable omission to disclose. The authorities in New Zealand and the [NAME] support that approach. We agree, therefore, with [NAME] [NAME] submission, recorded at [84] above, that the state of the law in New Zealand prior to the decision on appeal was that “concealment” for the purposes of s 28(b) entails that the [NAME] must know the essential facts comprising the right of action. [97] But what form must such knowledge take? A spectrum of apprehension can be posited. First, there is actual knowledge, which arises from such clear apprehension of the facts as to need no imputation under any of the remaining categories.140 Secondly, there is wilful blindness, the orthodox formulation in this country being “a sufficiently strong suspicion … coupled with a deliberate decision not to make inquiry lest the inquiry result in actual knowledge”, treated in equity as tantamount to actual knowledge.141 Thirdly, there is simple recklessness, which the Court of Appeal suggested involves proceeding with knowledge of a risk, though not such a likelihood as to amount to wilful blindness, that a certain state of affairs might exist.142 Fourthly, and finally, there is simple negligence, involving a failure to ascertain information in breach of a duty to do so. [98] We accept that wilful blindness as to an essential fact or facts would also be sufficient to fulfil this first element of equitable fraud under s 28(b). That approach is consistent with fraud in its equitable sense contemplated by s 28(b). For the Council, [NAME] [NAME] accepted that must be the case. So if, for instance, a [NAME] knows that some of the reinforcing steel on site is defective, and that some of that steel [NAME] be being applied to the plaintiff’s foundations, but covers the work up without checking to be sure, knowledge of the defective materials later found should be

140 See for example [NAME] v [COMPANY] [1993] 1 WLR 509 (Ch) at [250]. 141 [COMPANY] v [NAME] and Associates [COMPANY] [2011] NZSC 89, [2011] 3 NZLR 751 at [27]. 142 [NAME] judgment, above n 23, at [166]–[178]. In [NAME] v [COMPANY], above n 104, at [20], [NAME] [NAME] divided recklessness for limitation purposes into two forms: (1) purely subjective recklessness (subjective knowledge of both the risk and the unreasonableness of taking it); and subjective/objective recklessness (applying to those two elements in that order).

imputed to him. He cannot say, “I did not know the plaintiff’s foundations included defective reinforcing.” We discuss wilful blindness in more detail later, in addressing the [NAME] element of appreciation of wrongfulness.143 [99] We see no room however on the authorities for recklessness in this first element if it omits subjective appreciation of an essential fact (or its likely existence). Subjective apprehension of a fact to a standard below likelihood, not engaging wilful blindness, is not sufficient to engage s 28(b). That would set the standard for a finding of equitable fraud in a limitation context too low. Failure to apprehend the essential facts [NAME] involve stupidity, and it [NAME] involve negligence—even gross negligence— but that does not engage the unconscionability (or equitable fraud) trigger on which s 28(b) is built. The essence of all unconscionability is behaviour that amounts to unconscientious exploitation of another.144 Where both the plaintiff and the [NAME] are operating in a state of genuine ignorance as to the actual or likely essential facts, there is no unconscionable act demanding the clock be stopped. B The need for an appreciation of wrongfulness [100] It is insufficient to extend the limitation period under s 28(b) for the [NAME] simply to be in possession of the essential facts. What s 28(b) requires is actual knowledge of, or wilful blindness to, the fact that those essential facts amounted to a wrongful act and a decision nevertheless to conceal them. [101] [[NAME] discussed recklessness in relation to risk:145 … that the [NAME] took a risk in circumstances in which they knew there was a real possibility of harm and it was unreasonable, in the circumstances known to the [NAME], to take that risk. Here the Court was [NAME] not with recklessness in the commission of the actionable wrong itself, but in the appreciation (or non-appreciation) of the wrongfulness of what had (or had not) been done. And it adopted the expression

143 Below at [118]–[120]. 144 See for example [COMPANY] v [COMPANY] [2008] NZSC 47, [2008] 2 NZLR 735 at [6]; and [COMPANY] v [COMPANY] [2007] NZCA 205 at [30]. 145 [NAME] judgment, above n 23, at [115].

“subjective recklessness” to distinguish responsibility “from a careless failure to give any thought to a risk that the [NAME] did not foresee but ought to have done”.146 [102] [ADDRESS]’s ultimate reasoning as to recklessness appears to turn on an evidential inference that the Council’s officers had sufficient information to put them on notice that the 2004 LIM might have been incomplete (as to the existence of a consent) and unreasonably failed to check.147 It was thereby reckless as to whether a right of action existed. [103] [[NAME] concluded that until the recent decision of the [NAME] [NAME], it appeared to be settled law in England that subjective recklessness as to the existence of the relevant facts sufficed for fraudulent concealment under the s 28(b) equivalent in the 1939 UK Act.148 It also said that the issue appeared not to have arisen directly in New Zealand before, as [NAME], [NAME] and [NAME] were “all [NAME] [with] wilful non-disclosure, not recklessness”.149 [104] We accept the latter observation, but turn now to examine the three English decisions said to support the [NAME] conclusion that subjective recklessness was a sufficient basis for fraudulent concealment. They are [NAME] v [COMPANY], [NAME] v [NAME] and [NAME] v [NAME].150 [105] In [NAME], the [NAME] [NAME] (whose business was closing due to wartime regulations) disposed of its principal’s goods without advising her of that fact— despite the fact they had been in communications until just six months prior. The [NAME]’s employees had actual knowledge the goods belonged to the plaintiff, knew they were obliged to hold them for her subject to instructions (and that to dispose of them without

146 At [115]. 147 At [167]–[178]. We note that [NAME] [RESPONDENT] did not plead concealment of existing use rights: see at [152]. 148 At [118]. 149 At [114]. 150 [NAME] v [COMPANY], above n 69; [NAME] v [NAME], above n 118; and [NAME] v [NAME], above n 69.

instructions would be wrongful, therefore) and yet made a deliberate decision to hide that act from the plaintiff.151 [106] As [NAME] [NAME] noted for the [NAME], no argument directed to recklessness under the equivalent of s 28(b) was advanced in [NAME].152 We observe that while [NAME] [NAME[NAME] employed the expression “recklessness” repeatedly, he did so in describing the [NAME]’s employees’ conduct in committing the tort of conversion— in disposing of the goods without attempting to communicate with the plaintiff, in assuming that ridding themselves of the goods benefitted the plaintiff, and in assessing the goods as being of no value—in circumstances where their actions were motivated by their own commercial convenience.153 In [NAME] it was inarguable that a conversion of the plaintiff’s goods had occurred. [NAME] were in full possession of all the facts. The suggestion that they had in mind the plaintiff’s interests was “disingenuous”,154 and as [NAME] [NAME] ultimately found, their conduct was “furtive and surreptitious” and “calculated to keep [their client] in ignorance of the wrong that they had committed”.155 In other words, they knew what they were doing was wrong.156 That amounted to fraudulent concealment of the right of action. [107] It would in any case be a mistake to take the leading reasons, where three sets are delivered, as exhaustive of the ratio of the judgment, unless they are endorsed by the other two judges without evident divergence. That was not the case here. Neither of the other members of the Court referred to recklessness at all. [NAME] LJ would have found moral turpitude if he had to.157 For him the key point was the choice made not to communicate when the parties had been so recently in written communication with each other.158 [NAME] LJ was uncompromising, finding that

151 There was no suggestion the plaintiff, now resident in India, was in breach of her obligations in any way. 152 [NAME] v [COMPANY], above n 104, at [43]. Counsel for the plaintiff in [NAME] did submit that “[i]t was at least a wrongful act done recklessly and that would be fraud”, but that seems to have been addressed at the equivalent of s 28(a): [NAME] v [COMPANY], above n 69, at 553. 153 [NAME] v [COMPANY], above n 69, at 561–566. 154 At 557 per [NAME[NAME]. 155 At 557 and 566. 156 This is the inference [NAME] also took in [NAME] v [COMPANY], above n 104, at [45]. 157 [NAME] v [COMPANY], above n 69, at 569. 158 At 569–570.

“disposition of the property was carried out furtively, or at least without the knowledge of the owner, and the fact that this had been done was deliberately concealed from her”.159 The reason [NAME] did not tell the plaintiff what they had done was “that they did not wish her to know”, and by concealing from her what they had done “they concealed from her the right of action which arose upon the conversion of the goods”.160 Ultimately, once the reasons of [NAME] [NAME] are properly understood, there is no material divergence between them and those of [NAME] and [NAME]. [108] We therefore consider, as [NAME] [NAME] did, that [NAME] was a case of actual knowledge of wrongfulness, followed by wilful concealment.161 It is not authority that subjective recklessness as to wrongfulness amounts to fraudulent concealment. [109] The [NAME] case, [NAME] v [NAME], [NAME] solicitors’ negligence.162 These solicitors had taken instructions to act for the plaintiff against an [NAME] whose bungled installation of an electrical appliance was the likely cause of the death by electrocution of the plaintiff’s husband. However, the solicitors had failed to take effective steps before the one-year time bar that applied in fatal accident cases. Thereafter the solicitors negotiated an ex gratia payment by the [NAME], to be paid by a non-attributable donation routed through the Association, in a way which deliberately concealed the fact of the solicitors’ breach of duty.163 When the [NAME] facts emerged, Mrs [NAME] sued the solicitors in negligence— only (and ironically) to be faced with a limitation plea by the solicitors. [110] In rejecting the solicitors’ appeal, [NAME] [NAME] alone employed the expression “recklessness”. He did so largely by reciting [NAME] [NAME] reasoning discussed above, and then going on to say that “similar reasoning” applied in this case:164

159 At 572. 160 At 571. 161 [NAME] v [COMPANY], above n 104, at [45]. 162 [NAME] v [NAME], above n 118. 163 The [COMPANY], which had instructed the [NAME] on the plaintiff’s behalf, had been excused liability at first instance. The appeal was pursued by the solicitors, who had been held liable for [NAME] negligence. 164 At 573–574 (footnote omitted).

… the conduct of the [solicitors] was, in the sense in which [NAME] [NAME] used the word, reckless, in at least to the same degree as it was in [NAME]’s case. But as he then noted, the plaintiff was entitled to expect the solicitors to look after her interests and the arrangements they had made regarding the ex gratia payment were “in breach of that confidence” and “concealed from her facts which would undoubtedly, if disclosed, have brought to light what her [NAME] rights against the [solicitors] were”.165 In his judgment, that was what amounted to concealment by fraud. It is unclear whether recklessness formed part of that reasoning path— but even if it did, his reasons are consistent with the more limited, descriptive use of the term seen in [NAME]. [NAME] LJ, “with considerable hesitation”, agreed with [NAME] [NAME] that the arrangement between the solicitors, the [NAME] and the Association involved a fraudulent concealment of Mrs [COUNSEL] right of action against the solicitor.166 [111] [COUNSEL] LJ had no such doubts, however. He would not have found that the original failure by the solicitors to act promptly, giving rise to a right of action against them, was fraudulently concealed at the time it occurred. It was what occurred afterwards, in the tripartite arrangement, that engaged the exception in the equivalent of s 28(b). That depended on finding that the solicitors had, “in order to benefit … themselves”, failed to disclose the position to their client.167 The offered amount was “modest indeed in comparison with the needs of the plaintiff and her children”:168 If she had known of what was taking place and had demanded more and had insisted, as it seems she would have done, that action should be taken, [NAME] would have been in a difficulty and their failure to inform her of the omission to have issued a writ would have been revealed. In this case the failure of duty concealed from Mrs [NAME] facts which would have revealed the solicitors’ earlier breach of duty. As [NAME] LJ concluded, “[t]he concealment was intentional and did, in fact, benefit and save the interests of the [solicitors]”.169

165 At 574. 166 At 576. 167 At 578. 168 At 579. 169 At 579.

[112] As with [NAME], we do not think this case stands for the proposition that subjective recklessness about the [NAME]’s obligations or the plaintiff’s rights amounts to fraudulent concealment. Rather, [NAME] is a case in which [NAME] were found to have employed a deliberate device to conceal the [NAME] facts from their client—namely, that they had negligently allowed her claim against the [NAME] to become statute-barred. The stratagem was adopted intentionally to conceal those facts, for the solicitors’ benefit. It was deliberate; recklessness did not come into it. [NAME] involved active concealment; [NAME], passive concealment—i.e., non-communication of the fact of conversion. The form the dishonesty took made no practical difference to the limitation exception. [113] We turn now to the third case, [NAME].170 In that case, the plaintiff had purchased a land and building package from [NAME], a [NAME] of [NAME]. [NAME] were aware that the land was formerly a part-excavated chalkpit. There was reliable evidence that they had been told that part of the fill consisted of rubbish, it having been used as a “dump”. [NAME] took architects’ advice. That advice was that it would be necessary either to cover the fill with a reinforced concrete raft or to employ a series of piles connected to reinforced concrete ground beams. [NAME] did not however act on that advice. Instead, to their knowledge, they engaged their builders to install what was described by the Court of Appeal as a “homespun grillage raft”—an expedient that was wholly inadequate.171 Seven years later, large cracks developed in the structure of the [NAME]. These proved irreparable, necessitating total demolition. The High Court held the plaintiff’s claim was not statute-barred: [NAME] knew or ought to have known of the unfitness of the foundations and the risk of subsidence.172 [114] On appeal there was no dispute that the developer was in breach of an implied warranty that the foundations were reasonably fit for the dwelling in the circumstances applying to it. The real issue [NAME] limitation. [NAME] [NAME[NAME] saw fraudulent concealment as involving conduct by a [NAME] or its agent advancing a limitation defence “against conscience”.173 Active steps to conceal were not necessary; it would

170 [NAME] v [NAME], above n 69. 171 At 41 per [NAME]. 172 [NAME] v [NAME] [1972] 1 WLR 801 (QB). 173 [NAME] v [NAME], above n 69, at 33.

be sufficient if the [NAME] knowingly committed the wrongdoing or breach of contract and did not tell the owner about it. Confusingly—and unnecessarily—[NAME] [NAME] then referred to [NAME] as adding “recklessly” to “knowingly” in this formulation. He put it this way:174 Like the man who turns a blind eye. He is aware that what he is doing [NAME] well be a wrong, or a breach of contract, but he takes the risk of it being so. He refrains from further inquiry lest it should prove to be correct: and says nothing about it. “Recklessness” can be a protean expression. [NAME] [NAME] seems to have used it only in the limited sense of wilful blindness. [115] Three further points might be made. First, as we have seen, [NAME] did not endorse an extended recklessness standard at all. Secondly, as [NAME] [NAME] observed [NAME], [NAME] involved a deliberate act of concealment.175 It was not a case where [NAME] “ought to have known” there was a risk of subsidence as the High Court Judge had held. [NAME] knew for a fact there was such a risk— because the architects had told them so—and they had not followed their advice as to how to avert that risk. Moreover, they did not tell the plaintiff about it, and let him think that the foundations were properly constructed and fit for purpose. It might be thought that was enough to engage the fraudulent concealment exception, and that reference to recklessness as to [NAME]’ obligations or the plaintiff’s rights added nothing useful to the analysis. [116] Thirdly, review of the separate, concurring reasons is instructive. [NAME] LJ appears to have found that a warranty as to fitness was implied, customary and well-known to [NAME]. They knew the foundations were defective for the site and knew there was a substantial or real risk of subsidence. This was actual knowledge; [NAME] LJ rejected a suggestion by the Judge below that constructive knowledge of the relevant facts would suffice.176 But here, they did know. [NAME[NAME] reached a similar conclusion on the facts.177 Ultimately, he described their conduct as

174 At 34. 175 [NAME] v [COMPANY], above n 104, at [48]. 176 [NAME] v [NAME], above n 69, at 36. 177 At 41–42.

“unconscionable and reckless”.178 The extra epithet adds nothing, given the prior, unavoidable finding of knowledge of breach and consequent risk of damage. [117] It follows that we do not consider these three cases involved subjective recklessness. Rather, they involved deliberate deception, involving both subjective appreciation (actual knowledge) of essential facts (including, in the building cases, the fact of risk to the [NAME]) and deliberate concealment of those facts because of an apprehended risk of liability. [118] As in the case of the first element (knowledge of essential facts, or wilful blindness as to their existence), we accept that a [NAME] in actual or deemed possession of the essential facts constituting a right of action, but who is wilfully blind as to the wrongfulness of their actions, [NAME] not rely on actual ignorance to avoid extension of the limitation period under s 28(b). None of the [NAME] involved wilful blindness, and [NAME] was a case of deliberate breach. [NAME] did, although—as we have explained—the factual findings suggest that was a case of actual knowledge rather than wilful blindness. In [NAME], the [NAME] addressed wilful blindness explicitly. [NAME] [NAME[NAME] said, in a passage cited above at [114], that a [NAME] who is aware that what he is doing “[NAME] well be a wrong … but … takes the risk of it being so” would fall within the equivalent of s 28(b). In the context of that case, which involved deliberate, knowing deception by the [NAME], that observation is obiter. But we think it is sound. [119] It also received some approval from the [NAME] in the Canada [NAME] decision. Referring to [NAME] [NAME] observation in [NAME], [NAME] [NAME] described it as “in accordance with the wider principle according to which equity sometimes attributes constructive notice … to persons who are wilfully blind”.179 He came back to the topic later indicating apparent approval.180 [120] In the present appeal, and as we noted earlier, the Council accepts that wilful blindness would also amount to fraudulent concealment under s 28(b). It submits that,

178 At 42. 179 [NAME] v [COMPANY], above n 104, at [48]. 180 At [129].

consistent with the approach [NAME], that would be so where the [NAME] has the required degree of knowledge of the essential facts and deliberately then turns a blind eye “in order to prevent obtaining actual knowledge of their own wrong”. That is, wilful blindness [NAME] satisfy both the first (factual) and [NAME] (wrongfulness) aspects of s 28(b). We agree that this approach is justifiable on the authorities, and in principle. But it still depends on the primary element of actual knowledge of the essential facts, or the imputation of such knowledge by reason of wilful blindness, combined with a deliberate decision not to examine those facts further to ascertain whether a wrong has been committed. [121] That wilful blindness—the [NAME] species of knowledge in [97] above—is absorbed in s 28(b) does not, however, mean that the third species, subjective recklessness, suffices. As we have shown, that proposition was not supported by the authorities under the 1939 UK Act, and it was expressly rejected by the [NAME] [NAME] under the 1980 UK Act (which requires deliberate concealment). No authority cited to us, or of which we are aware, would support such a proposition. The underlying requirement of equitable fraud which is embedded in s 28(b) cannot be met by simply assimilating within it a cause of action based on simple negligence—i.e., one without subjective knowledge of the essential facts and subjective (or objective, in the limited sense of wilful blindness) appreciation that the facts constitute a wrong that [NAME] be, or become, actionable. That was the very error corrected by the [NAME] of Lords in [NAME].181 [122] Nor do we think further extension of principle to embrace subjective recklessness—the third species—is required. We say that for four main reasons. [123] First, sound policy reasons exist for clarity in the definition and extent of an exception to a [NAME], time-based statutory rule of limitation. Those policy considerations are described at [78]–[82] above, and we need not repeat them here. They are reflected in the prior case law, which does not support the extension of principle for which [NAME] [RESPONDENT] contends. Indeed, they are to contrary effect—as we have demonstrated. As we also noted, the statutory limitation mechanism diverged

181 See above at [92]–[94].

from the more nuanced approach of equity’s doctrine of laches. Even with fraud being used in its equitable sense, conscious but unconscientious exploitation of the [NAME] is required. [124] Secondly, and in that light, we think the exposition of principle in [NAME] strikes an appropriate balance.182 For conduct to constitute fraudulent concealment, extending the limitation period, there must be actual knowledge (or, in cases of wilful blindness, imputed awareness) both of the essential facts constituting the cause of action. and that those facts together involve a wrongful act against the plaintiff.183 That approach avoids unjustified condemnation of a [NAME] acting in complete ignorance of the essential facts (and therefore an unjustified extension of time running against him or her) while at the same time dispensing with the sorts of unreal self-justifications to which those who apprehend they [NAME] have done wrong, but stay silent about it, are prone to resort. [NAME] offers an excellent example of that sort of behaviour.184 It also averts the risk of simply assimilating the s 28(b) limitation exception to the cause of action whenever carelessness is involved. Carelessness alone is not and cannot be enough to oust a limitation period under s 28(b), as the [NAME] of Lords decision in [NAME] made clear.185 But where there is both actual or imputed knowledge of the material facts constituting the cause of action and an actual or imputed appreciation that those facts involve a wrongful act against the plaintiff, concealment of the right of action can be characterised as unconscionable. Subject to there being a duty to disclose—which we are about to address—time should then stand still until discovery (or reasonable discoverability) of the right of action.186 [125] Thirdly, we are dealing here with repealed legislation. The 2010 Act has since modified the approach to extension of time in the case of “dishonest or fraudulent concealment”. Fraudulent concealment now sits under the broader umbrella of “late knowledge”, allowing extension of the standard limitation period where the claimant did not know, nor ought reasonably to have known, of any essential fact due to

182 [COMPANY] v [COMPANY], above n 116. See above at [90]. 183 We do not consider [NAME], in [NAME], was suggesting the [NAME] needed to appreciate the exact legal form the wrongful act took: at [47] and [49]–[50]. In that case the wrong alleged was obviously contractual in nature. 184 [NAME] v [COMPANY], above n 69. See above at [105]. 185 [NAME] v [NAME], above n 104. See above at [92]. 186 Limitation Act 1950, s 28.

fraudulent concealment by the [NAME].187 “Fraud”, which includes dishonest or fraudulent concealment,188 creates a rare exception to the otherwise strict longstop provision,189 which the Law Commission justified on the basis that a [NAME] should not be able to avoid a claim through further wrongdoing.190 A further report published by the Commission to assist with drafting the 2010 Act referred interchangeably to “fraudulent” and “deliberate” concealment, reflecting a view—based on the case law—that fraudulent concealment required more than carelessness or recklessness.191 Both observations support the view that the drafters of the 2010 Act saw no need for a loosening of the meaning of fraud in this context. The 2010 reform, along with the reality that the principles applying under the 1950 Act were effectively settled in [NAME], means it is not appropriate now to tinker with those settled principles when people [NAME] have ordered their affairs in reliance on them. [126] Fourthly, as we note later, in the present case this approach worked no injustice. [NAME] [RESPONDENT] had ample time to file proceedings against the Council, but did not do so because of defective legal advice. That fact merely suggests an alternative claim, against an alternative [NAME]. It offers no premise for the distortion of well-established, justifiable principle. C Is a duty to inform also needed? [127] In [NAME], [NAME] referred to “knowledge of a duty to disclose” facts comprising a right of action as one of the elements of fraudulent concealment under s 28(b).192 Adopting that approach, [NAME] [NAME] submitted here that, in addition to the elements expressed at [124] above, the [NAME] must also “owe a duty to the plaintiff (whether a fiduciary duty or some other special relationship) to disclose the material facts”.193 Some further explanation is needed.

187 Limitation Act 2010, ss 11(2)–(3) and 14(3). 188 Section 4 definition of “fraud”, para (a). 189 Section 48. 190 Law Commission | Te Aka Matua o te Ture Tidying the Limitation Act (NZLC R61, 2000) at [23]. 191 Law Commission | Te Aka Matua o te Ture Limitation Defences in Civil Cases: Update Report for the Law Commission – Miscellaneous Paper prepared by [COUNSEL], Barrister (NZLC MP16, 2007) at [135]. 192 See above at [90]. 193 See above at [84(c)].

[128] As [NAME[NAME] observed in [NAME], in cases of deliberate deceit—such as the clandestine theft of coal by repeatedly trespassing beneath the plaintiff’s boundary in Bulli Coal Mining Co v Osborne—the cause of action will itself involve fraud, and s 28(a) might then apply.194 The same might be [NAME] in a case involving the deliberate substitution of cheaper, non-compliant foundations.195 As [NAME[NAME] saw it, however, where s 28(b) was engaged, the duty to disclose had to be founded either on:196 … a fiduciary duty or a special duty of disclosure inherent in the contract made by the parties or in some other legal relationship to which they had become committed. Duty to disclose was also very much part of [NAME]’s formulation in [NAME].197 [129] The notion of a special relationship giving rise to a duty to disclose does not feature prominently in the [NAME] under the 1939 UK Act.198 It was enough that essential facts as to the existence of a right of action were known and wilfully concealed, either contemporaneously with the cause of action or thereafter. In either case, time would not begin to run until the right of action was discovered or became reasonably discoverable. After the 1980 UK Act was passed, some cases flirted with the notion of a duty to disclose.199 But [NAME], the suggestion that there was a third and additional element of the exception based on breach of such a duty was firmly rejected by the [NAME] as lying beyond the words and intent of Parliament.200 [130] While we are attracted to the reasoning [NAME], ultimately it is unnecessary for us to decide in this case whether the “duty to disclose” element

194 [COMPANY] v [NAME]) [COMPANY], above n 117, at 710; and see Bulli Coal Mining Co v Osborne, above n 113. 195 As occurred, for example, in [NAME] v [NAME] [1971] 1 QB 406 ([NAME]). 196 [COMPANY] v [NAME]) [COMPANY], above n 117, at 709. 197 [COMPANY] v [NAME], above n 117, at 536–538 citing [COMPANY] v [NAME]) [COMPANY], above n 117. 198 The only case of that era which suggests such a duty is relevant, [NAME] [NAME] [1956] 1 QB 304 (QB), does not appear to have been cited elsewhere in support of that proposition. 199 See for example [COMPANY] v Townley [2004] EWCA Civ 1369, [2005] 1 EGLR 89 at [85]; [COMPANY] v Palmer [2005] EWHC 817 (Ch), [2006] Ch 79 at [58]; and [COMPANY] v [COMPANY]) [COMPANY] [2006] EWCA Civ 1601, [2007] 1 All ER (Comm) 667 [The [NAME]] at [321] per Rix LJ dissenting. 200 [NAME] v [COMPANY], above n 104, at [98]–[104].

hitherto adopted in the New Zealand cases is correct or not. That is because we consider it inarguable in the particular context of this case that, if the Council (1) was in fact aware of the 1988 LUC, and (2) then apprehended its negligence both in not recording it and in precluding operation of the [NAME] in its absence, then (3) it would plainly have been bound to disclose its existence. As a local authority, the Council was obliged to act openly and transparently and consider the interests of any person affected by a particular decision—including a decision not to do something.201 Those general duties are reinforced here by the principle of availability of information under the Local Government Official Information and Meetings Act 1987,202 and the right of access to personal information under that Act.203 D Deliberate decision to conceal? [131] The fourth element requires little extra attention here. The appeal does not turn on it. As [NAME] noted in [NAME]:204 The focus of s 28(b) is not on whether or not the non-disclosure is wilful. The focus is on knowledge of relevant facts and on knowledge of a duty to disclose them. If, despite such knowledge, the [NAME] decides not to disclose the facts, then almost always that decision will be worthy of the epithet “wilful”. But that is a consequence of those other factors, not the driver. The cases to which we shall shortly come say that “the concealment must be wilful” but that is no more than a shorthand way of expressing the factual elements we have been discussing. If they are established, then the concealment will indeed be wilful. [132] [NAME], the Supreme Court appeared to suggest a more restrictive view that the exception still depends on someone having made a conscious decision not to disclose the wrongful act—i.e., to have deliberately ensured the facts were withheld from the plaintiff:[redacted] the claimant of the relevant fact and decided not to”.206 [133] It is unnecessary in this appeal to choose between these positions, and in all the circumstances we do not do so. It [NAME] be that there is not a single principle here;

201 Local Government Act 2002, ss 14(1)(a)(i), 76(4) and 78(1). 202 Local Government Official Information and Meetings Act 1987, s 5. 203 Section 23. See also s 44A(6) and (2)(d). 204 [COMPANY] v [COMPANY], above n 116, at [47]. 205 [NAME] v [COMPANY], above n 104, at [105]. 206 At [108].

the ultimate question, if the first two elements are made out, will be whether non-disclosure of the essential facts and wrongful act or omission involves an unconscientious exploitation of the [NAME]. Where actual knowledge of the first two elements is demonstrated— as was the case in [NAME] and assumed in [NAME]— it [NAME] well be no further enquiry is needed, as [NAME] suggested. That will be particularly so where, as here, the third element (duty to inform) applies. Where knowledge is imputed, however, the fourth element [NAME] assume independent importance.207 Application of principles here [134] We conclude that the evidence at [NAME] established neither actual knowledge nor wilful blindness as to the likely existence of an LUC in the Council files, regardless of what the LIM said. Nor does it establish knowledge of either kind in relation to wrongfulness. [135] A paradox of the pleading in this case is that the claim of negligence was firmly based on something neither party knew about at the time. That is, it was based on the negligent failure of the Council to ascertain the existence of the LUC at the same time as it was taking enforcement action against [NAME] [RESPONDENT] and not—or at least not directly—on the Council’s earlier error in compiling the LIM.208 [NAME] [RESPONDENT] nor any Council officer actually knew anything about an LUC at that time, as both Courts below found.209 [136] Significantly, the Court of Appeal did not agree with the High Court that Council officers were wilfully blind about the LUC’s existence—in the sense of knowing the Council files likely contained an LUC and then consciously choosing not to look for it.210 We consider that conclusion must be correct. As the narrative earlier in this judgment demonstrates, nothing beyond the fact of past mineral extraction and the commercial rating charges levied suggested any prior rights to [NAME].211 But those

207 For the avoidance of doubt, we leave open whether the fourth element [NAME] also assume independent importance in the absence of the third. 208 [NAME] judgment, above n 23, at [212]. The Council acknowledged a duty of care in preparation of a LIM, under s 44A(2) of the Local Government Official Information and Meetings Act. 209 [NAME] judgment, above n 23, at [307]; and [NAME] judgment, above n 23, at [164]. 210 [NAME] judgment, above n 23, at [164]–[165]. 211 See above at [21]–[47].

suggested, at best, existing use rights, rather than an LUC—a distinction the Court of Appeal does not appear to have drawn. As we have seen, by December 2005 [NAME] [RESPONDENT] seemed to have acquiesced to the Council’s position that there was no resource consent, and was getting on with making a fresh resource consent application.212 [137] A further paradox of the pleading, then, is that the claim was not based (again, directly) on the thing [NAME] [RESPONDENT] had been most forcefully asserting—i.e., existing use rights. This is important: as noted, [NAME] [RESPONDENT]’s dealings with the Council had not emphasised the likelihood of an LUC existing, for—once the rating evidence had been exploded—he had no solid grounds to believe one had ever been issued. But existing use rights he did assert—while at the same time seeking a resource consent of his own. Yet, as the High Court held, as a general proposition it was always for the landowner to establish existing use rights.213 It is material also that existing use rights do not endure in the way an [NAME]: to avoid extinguishment, they must generally be exercised with effects of consistent character, intensity and scale over time, and must not be discontinued for more than 12 months in circumstances where the use would be unlawful but for the existing rights.214 In this case proving existing use rights would require more than just evidence of prior quarrying activity: that activity must also have met the regulatory requirements of the earlier legislation and have been maintained consistently in the manner just described.215 And as the Court of Appeal also observed, [NAME] [RESPONDENT]:216 … did not plead that the Council concealed the existence of those rights from him, or that a diligent search would have disclosed something about existing use rights that he did not already know from [NAME] [NAME]. [138] Whether there were any existing use rights was never established at [NAME]. [NAME[NAME] made no such finding. However, the obtaining of the LUC in 1988 suggests either the absence of existing use rights, or that their scale was inadequate for [NAME]’ purposes. As we noted earlier, the pleading suggested the establishment of

212 Above at [41]. 213 [NAME] judgment, above n 23, at [83] citing [NAME] v Auckland Council [2011] NZEnvC 357, [2011] ELHNZ 361. 214 RMA, s 10(1)–(2). 215 See Quarries Act 1944, s 22; and Quarries and Tunnels Act 1982, s 32. 216 [NAME] judgment, above n 23, at [152].

commercial quarrying by the [NAME] “c1982”, whereas s 10 of the RMA would have required lawful establishment by 1978, and the absence of any interruption lasting more than 12 months. The 2007 decision of the [NAME] considering [NAME] [RESPONDENT]’s resource consent application did not find commercial-scale existing use rights, the evidence suggesting prior use had been, in the words of the Judge, “relatively low-scale”.217 Nor does the evidence given by [NAME] before [NAME] sustain such rights. [139] That leaves the commercial rates levied on the [NAME]. Much was made of that at [NAME], as some sort of red flag. But we do not consider it offered a material indication of an underlying LUC for quarrying, for three reasons. The first is that it might only have indicated existing use rights. That, indeed, was how [NAME] [RESPONDENT] really relied upon the rating information from the end of 2005. Secondly, the assertion of existing use rights by [NAME] [RESPONDENT] in fact suggested the absence of an LUC, as we noted above, and did not serve to place the Council on inquiry at all as to the existence of that alternative source of rights. Thirdly, at the end of the day the commercial rating information proved inconclusive anyway—first, because the rating demands held by [NAME] [RESPONDENT] turned out to have related to another [NAME] entirely; and secondly, because as Council officers reminded [NAME] [RESPONDENT] at the time, the fact that the [NAME] have been rating [NAME] [RESPONDENT] on that basis did not create existing use rights where the requirements of s 10 of the RMA had not been satisfied.218 [140] Council officers had formed a view that the LIM was a correct statement that no LUC existed and put [NAME] [RESPONDENT] to proof on the existing use rights on which he now seemed instead to rely. As [NAME[NAME] observed in the High Court:219 The significance of the erroneous statement in the LIM … is that it is probable that Council officers thereafter made no attempt to investigate whether the LIM accurately reflected the [NAME] state of affairs. Their negligence was twofold: inaccuracy in generating the initial LIM, and then in relying on it. That was negligent indeed, but we cannot infer from the evidence actual knowledge or wilful blindness as to the existence of an LUC, and as to wrongfulness.

217 [NAME] judgment, above n 23, at [80]–[82]. 218 See above at [44]. 219 [NAME] judgment, above n 23, at [212].

If anything, the focus of all parties on existing use rights pointed them in the opposite direction entirely. [141] [[NAME] found that Council officers were not wilfully blind, in the sense of knowing the Council files likely contained an LUC and consciously choosing not to look for it.220 Its contrary conclusion as to recklessness appears to turn on an evidential inference that the Council’s officers had sufficient information to put them on notice that the LIM might have been incomplete (as to the existence of a consent)— and unreasonably failed to check.221 That [NAME] be so, but that is the very essence of the claim in negligence, based as it is on the enforcement action rather than the LIM itself. The evidence reviewed above does not establish the higher requisite standard of knowledge required to trigger the s 28(b) extension of limitation for fraudulent concealment, i.e., actual knowledge or wilful blindness as to the likely existence of an LUC—both of which the Court of Appeal correctly excluded on the evidence—and like appreciation of wrongfulness in taking no further action to disclose the facts known to them. [142] As we see it, the conclusion of the Courts below improperly assimilates the claim in negligence with equitable fraud, and is open to the very objections expressed by [NAME] [NAME] and [NAME] in [NAME],222 and [NAME] [NAME] [NAME], that doing so unreasonably extends the limitation period and subverts the purpose of the Limitation Acts.223 Here, the Council officers lacked awareness of the essential fact that an LUC was likely to exist and were found not to have been wilfully blind as to its existence by the Court of Appeal. In the absence of such actual or imputed knowledge, they had no reason to apprehend the wrongfulness of their actions. Those actions were certainly negligent, perhaps grossly negligent, but not fraudulent in the equitable sense necessary to extend the limitation period under s 28(b).

220 [NAME] judgment, above n 23, at [165]. 221 Above at [102]. 222 See above at [93]–[94] discussing [NAME] v [NAME], above n 104. 223 [NAME] v [COMPANY], above n 104, at [93]–[105].

Conclusion on concealment by fraud exception [143] It follows from the foregoing that the appeal must be allowed on this ground. Unless the next issue avails [NAME] [RESPONDENT], his claim against the Council was largely statute-barred because the fraudulent concealment exception does not apply on the facts. While that [NAME] seem hard on [NAME] [RESPONDENT], and subject to the continuing breach issue we are about to address, the short point is that he failed to advance his claim for almost three years, during which time he knew of the Council’s failings and could have issued proceedings without a limitation issue arising. That he did not do so because of a solicitor’s negligence means only that the solicitor [NAME] have to bear that loss, proceedings against him having been brought within time. There is no justification for subverting limitation principles to impose the burden instead upon the negligent Council. Limitation: was the continuing breach doctrine engaged? [144] We can deal with this issue relatively briefly. We have summarised the divergent decisions of the High Court and Court of Appeal on this matter at [64] and [70]–[71] above. We note that [NAME] [RESPONDENT] sought (and was granted) extension of time to support the judgment of the Court of Appeal on the ground that, contrary to that Court’s conclusion, the original proceeding was in any case issued within the limitation period by virtue of the principle of continuing breach. This was, appropriately, very much a secondary submission in oral argument in this Court. Pleading [145] The plaintiff’s negligence pleading centres on the abatement notices issued by the Council on 21 February and 16 November 2005. However, it is the [NAME] of those that is relevant for present purposes, because no cause of action arose until September 2006 (there being no loss prior to that month). Shorn of inessentials, the pleading is that the Council had a duty of care to have reasonable grounds for believing the quarrying activity contravened a rule in the relevant plan before issuing the abatement notice, and that required a “complete and substantive … [i]nspection and review of its own records … and … circumstantial evidence”. The issue of the abatement notice, and subsequent infringement and enforcement notices, constrained the [NAME]’s

operation. The Council’s “failure to be reasonably satisfied that an abatement notice could be issued was negligent and easily avoided by the [Council] carrying out a reasonable and thorough search of its own records”. But for the Council’s acts and omissions, the [NAME] would have operated profitably as a commercial [NAME]. [146] That pleading, as we see it, would ordinarily be understood to plead a single, temporally-conjoined omission (failure to undertake a proper search) and act (issue of the abatement notice), in November 2005, thereafter causing (1) loss of revenue (more properly, profit), (2) diminution in value of the property, (3) special damages in “losses and expense incurred in responding” to the Council’s actions, and (4) consequential losses. However, we will also examine liability and limitation on the basis that embedded in the pleading is an allegation of episodic breach—on the issue of each further abatement, infringement or enforcement notice after November 2005, up to the application for an enforcement order on 31 July 2009. Finally, we will also examine whether the pleading, and then facts, support an extension of liability via the continuing breach principle. Submissions [147[NAME] [RESPONDENT] submitted that the focal point of [NAME] [RESPONDENT]’s claim was the continued failure of the Council to conduct more than a cursory search of its records, while over a long period taking several different active steps designed to put him out of the quarrying business (and ultimately having that effect). [[NAME]’s conclusion that there had been periods where the case could be analysed in terms of continuing breach, involving numerous breaches in relation to the prosecution enforcement proceedings that “had the same unifying element: the failure to check historic records”,224 should naturally have led to a finding that the Council was in breach of duty on a continuous basis through until discovery of the LUC in September 2009, as the High Court Judge found.225 Discussion [148] It is best to start with first principles.

224 [NAME] judgment, above n 23, at [85]. 225 [NAME] judgment, above n 23, at [376]–[380].

[149] First, in the case of negligence, a cause of action accrues on the date on which the breach of duty causes more than trivial damage.226 That cause of action then includes all further damage of the same kind and attributable to the same cause of action even if that damage only manifests later, and by instalment.227 Further damage arising from the same breach does not create a new right of action or restart the running of time,228 unless it is clearly distinct from the other damage preceding it.229 One breach causing one of kind damage [NAME] be described as a singular cause of action, at least for limitation purposes. [150] Secondly, causes of action [NAME] arise in an episodic way. That involves a series of distinct causes of action, involving repeated breaches of duty causing damage.230 Time runs separately in relation to each episodic cause of action—usually triggered by the manifestation of non-trivial loss, as discussed above.231 That can be important, because it can bring a claim based on otherwise non-distinct loss into the six-year limitation period (provided there is a sufficient causal nexus between that loss and the fresh episode of breach).232 Time runs in relation to each episode for six years from the consequent manifestation of loss. [151] The English case of [NAME] v Beaumont provides a neat example.233 In April 2011, a barrister gave his client initial advice that he had good prospects of success in a proposed appeal. The client proceeded with preparations for the appeal. In October 2011, the barrister (now in receipt of fuller information) reiterated that advice in writing, saying the appeal had a 55–60 per cent chance of succeeding. The appeal ultimately failed, and in October 2017 the client sued in negligence. The claim was

226 [NAME] v [NAME] [2008] NZSC 65, [2009] 1 NZLR 437 at [15]–[16] per [NAME] and [38] and [46] per [NAME], [NAME] and [NAME]. 227 See at [25] per [NAME]; and [NAME] v [COMPANY] [2003] UKHL 12, [2004] 1 AC 715 [The Starsin] at [89]–[91] per [NAME] as cited in Attorney-General v Edmonds [2006] LGHNZ 22 ([NAME]) at [64]–[66]. 228 [NAME] v E [NAME] & [COMPANY] [1963] AC 758 (HL) at 771–772 per [NAME] and 779–780 per [NAME]. 229 [NAME] v [NAME] ([COMPANY], above n 67, at 424 per [NAME]; and [COMPANY] v [NAME] [2018] NZHC 2893, [2019] NZAR 210 at [47]. 230 See for example [NAME] v [NAME] [2003] 1 NZLR 626 ([NAME]). 231 Sciortino v Beaumont [2021] EWCA Civ 786, [2021] Ch 365 at [59], [62] and [81] per [NAME] LJ. 232 See for example [NAME] v [NAME], above n 230, at [25]. We reiterate that distinct loss, even without episodic breaches, can create a fresh cause of action and thereby restart time even where the original cause of action arising from the breach of duty is time-barred: [COMPANY] v [NAME], above n 229, at [47]; and see above at [149]. 233 Sciortino v Beaumont, above n 231.

clearly out of time in respect of the April 2011 advice, but just in time in respect of the October 2011 advice. [[NAME] concluded:234 The claim in respect of the first advice is statute-barred, and so there will be elements of the [losses] which the appellant incurred and which he will not be able to recover from the respondent. But there is no reason in law to conclude that the claim in respect of the [NAME] advice is statute-barred: it simply gives rise to a separate, albeit smaller, claim. [152] Thirdly, continuing breach involves a continuous breach of duty resulting in repeat or continuous loss of the same kind.235 Continuing breach should not however be conflated with continuing damage, which ordinarily meets the bar described above at [149]. Continuing breach of duty, in the positive sense, describes a continuing, consistent course of negligent conduct which cannot logically be separated into discrete episodes,236 and which causes damage on an ongoing basis.237 A breach might also be continuous in the negative sense of a sustained negligent omission to perform a duty, though that is more controversial.238 The [NAME] case is close to episodic breach, but distinguished by a lack of clearly identifiable, positive acts each capable of supporting a fresh cause of action. In the latter case, the omission is more clearly recognisable as a single continuous breach—although, as discussed above, a cause of action in negligence will only accrue where non-trivial damage is suffered as a result (and for each clearly distinct incident of damage thereafter).239 [153] In [NAME] v [COMPANY]—a private nuisance case concerning unremediated oil spillage from the Bonga Spill off the coast of Nigeria—the [NAME] said a continuing breach required

234 At [77] per [NAME] LJ. 235 It does not apply in negligence cases where a [NAME] is in breach of duty on a continuous basis but no damage arises until a later, singular incident. In such cases, the cause of action arises only on the date of damage, so resort to continuing breach is unnecessary; the claim will instead be one of ordinary, singular breach: see [COMPANY] v [NAME] (a [NAME]) [1979] Ch 384 (Ch) at 433, and contrast at 438. See also [NAME] v [NAME] & [COMPANY] [1968] 2 QB 229 ([NAME]). 236 [NAME] v [NAME], above n 230, at [15]. 237 [NAME] v [NAME], above n 81. This might arise where the conduct consists of a combination of acts and omissions, as was the case in [NAME] v Somerset County Council [2004] UKHL 13, [2004] 1 WLR 1089 at [67]–[70] per [NAME]. [NAME] v [COMPANY] [1995] 4 All ER 598 ([NAME]) at 640 per Hobhouse LJ. 238 [NAME] v [NAME], above n 230, at [27]. 239 See for example Darley Main Colliery Co v Mitchell (1886) 11 App Cas 127 (HL) at 132–133 per [NAME] [NAME], 145–147 per [NAME] [NAME] and 150–151 per [NAME] [NAME]. See also East Suffolk Rivers Catchment Board v Kent [1941] AC 74 (HL) at 91–94 per [NAME] dissenting, and related comments in [NAME] v [NAME], above n 230, at [16]–[27].

“repeated activity by the [NAME] or an ongoing state of affairs for which the [NAME] is responsible which causes continuing [damage]”.240 In that case, the Court held the spill was “a one-off event” as the leak which had caused it was stopped within six hours, and there was therefore no repeated activity or ongoing state of affairs for which [NAME] were responsible.241 That must be right. All the elements of the cause of action manifested within weeks of the original spill, giving the affected landowners ample time to bring a claim. The alternative approach would have extended the limitation period indefinitely until the tainted land was restored— undermining the principles of limitation, as briefly summarised above at [78].242 [154] As the Court of Appeal explained correctly in the judgment under appeal, the continuing breach principle permits a plaintiff to sue for loss accruing within the permitted limitation period despite the fact the breach originally manifested outside the limitation period, and despite the fact that the loss accruing from time to time is not distinct in character.243 That is because the cause of action constantly refreshes so long as the breach is extant and continues to cause loss. [155] But, as the Court of Appeal also explained correctly, the continuing breach principle does not enable the plaintiff to recover loss accruing outside the limitation period—i.e., between the initial manifestation of the breach and the date six years prior to the commencement of the claim.244 This, as the Court of Appeal explained, is the corollary of the principle that successive actions lie for each successive accrual of damage.245 That principle applies equally in cases of singular and episodic breach.

240 [NAME] v [NAME], above n 81, at [26]. There, the relevant damage was “undue interference with the use and enjoyment of the claimant’s land”. 241 At [37]. 242 At [36]. 243 [NAME] judgment, above n 23, at [84]. [NAME] v Beaumont, above n 231, at [103(iii)] per Stuart-Smith LJ concurring. 244 The [NAME] will in principle be liable only for damage incurred within the limitation period: see [NAME], above n 82, at 1563. In cases where it is difficult to determine when damage was incurred, however, the onus rests on the [NAME] to apportion damages: [NAME] v [COMPANY] [1957] 1 WLR 1210 (QB). 245 [NAME] [RESPONDENT], of course, sought to avoid that difficulty by claiming for projected loss of profits on the basis that but for the Council’s negligence, he would have run the [NAME] as a successful commercial operation and would not have sold it. Damages accordingly were assessed on an expectation basis in the High Court, on the assumption the [NAME] would have been profitable until 2017: see above at [61]

[156] We turn now to the application of these principles to the facts of the underlying appeal. The next port of call must be the pleading. The essential negligence pleading by [NAME] [RESPONDENT], in his fourth amended statement of claim, was that the Council failed to take reasonable care to check the legal status of the [NAME] before issuing its abatement notices in February and November 2005.246 As we noted above at [146], it is arguable the pleading in this case sought to advance a claim of episodic breach of this kind—arising on the issue of each abatement, infringement and enforcement notice, and application for enforcement order, up to July 2009. [157] Neither singular nor episodic breach helps [NAME] [RESPONDENT] very much, however. As the Court of Appeal noted, no new breach of any kind after the limitation date, 14 August 2009, was pleaded.247 Only in one respect might they assist [NAME] [RESPONDENT]: that concerns the distinct form of loss claimed for loss of value of the property arising after that limitation date. We address that shortly.248 [158] Hence the importance for [NAME] [RESPONDENT] of the application of continuous breach principles. As to that, however, we do not consider the pleading could reasonably be read as advancing a claim based on continuous breach. Certainly, the text does not suggest such a claim is being advanced. But nor, in our view, could it have been in any case on these facts. [159] The relevant question, had a pleading of continuous breach been made, would have been whether the Council’s negligence was more accurately characterised as a sequence of negligent acts of a similar kind or rather as a single, continuous omission. The High Court appeared to prefer the latter approach, saying “it would be artificial to regard the Council’s various denials of the existence of a consent from time to time as separate breaches of duty”, and finding the cause of action “accrued on a continuing basis from the time the Council opposed the 2006 resource consent application until the discovery of the 1988 LUC in September 2009”.[[NAME] took the

246 We record that this pleading was not drafted by the solicitors representing [NAME] [RESPONDENT] on appeal. 247 [NAME] judgment, above n 23, at [86]. 248 Below at [164]–[170]. 249 [NAME] judgment, above n 23, at [376] and [378].

[NAME] view, saying “there were numerous breaches of duty over a period of years and each had the same unifying element: the failure to check historic records”.250 [160] We think the Court of Appeal was right in this respect, for two reasons. [161] First, a breach must be something capable of causing damage. The Council’s continued failure to check its records and verify the contents of the LIM did not in itself cause damage to [NAME] [RESPONDENT]. Rather, it occasioned the numerous positive actions taken by Council officers against [NAME] [RESPONDENT] and his business in the form of abatement and infringement notices, and application for an enforcement order, up to July 2009. Those actions, and their consequences, were what resulted in the accrual of causes of action in negligence. [162] Secondly, the Council’s negligent acts here were discrete acts of negligence. We do not accept the High Court’s view that the Council’s negligence continued until the LUC was discovered in September 2009, and that all the damages flowing from the totality of that negligence were therefore within time.251 Nor do we accept that the Council’s actions after 14 August 2009 gave rise to a fresh cause of action. While ungracious, we do not consider the Council’s actions following discovery of the LUC amounted to a fresh breach of duty so as to cause a new cause of action to accrue, supporting expectation damages running through to 2017.252 Conclusion on continuing breach [163] For the reasons just given, we conclude the continuing breach principle does not assist [NAME] [RESPONDENT]. Limitation: was the loss of value distinct damage? [164] We agree with the Court of Appeal that (absent concealment by fraud) [NAME] [RESPONDENT] can have a live cause of action only in respect of fresh damage incurred

250 [NAME] judgment, above n 23, at [85]. 251 We note that even if negligence [NAME] amount in a particular case to a single continuous breach, it does not follow that all related losses will be within time provided the claim is brought within six years of the breach coming to an end: see above n 244. 252 See below at [178].

after 14 August 2009—i.e., damage which is clearly distinct from the damage flowing from statute-barred causes of action which accrued before that date. Such damage gives rise to a fresh cause of action because it completes the elements of negligence so as to give rise to a new cause of action distinct from the time-barred one (notwithstanding that the breach element of both causes of action is satisfied by the same breach of duty).253 It thereby meets the requirements stated at [149] above. [165] As the Court of Appeal recognised, the only damage fitting that description was the loss from the forced sale of the [ADDRESS] property in December 2009.254 [166[NAME] [NAME] submitted that even this loss was neither fresh nor distinct, and so is also time-barred. He submitted the loss arising from forced sale was insufficiently distinct, but simply a continuation of a loss that first occurred in 2006 when the Council’s negligence first prevented [NAME] operations. We disagree and can be brief. [167] First, we consider the case of [NAME] v [NAME], upon which the Council places reliance, can be distinguished from the present case.255 In [NAME], the owner of a property was found to have suffered loss at the time she took out an ill-advised mortgage in reliance on negligent advice, rather than at the time the mortgage was ultimately required to be discharged, rendering her claim time-barred. [[NAME] emphasised that there was “no contingency attached to the obligation to pay the moneys secured by the mortgage” even if it was payable in the future rather than when the obligation was incurred.256 Here, however, any arguable loss in the value of [NAME] [RESPONDENT]’s property before the forced sale occurred was necessarily contingent on indeterminate future events.257 This is related to the next point.

253 [NAME] v [NAME] ([COMPANY], above n 67, at 424 per [NAME]. 254 See above at [71]. 255 [NAME] v [NAME] (2001) 15 PRNZ 573 ([NAME]). 256 At [18]. 257 As in Roose v Duthie [2016] NZCA 600, (2016) 24 NZCPR 255, where the Court of Appeal said that “[w]here damage is purely contingent (that is, subject to a contingency that [NAME] or [NAME] not occur), the cause of action accrues only when the contingency occurs giving rise to some loss”: at [28] (footnote omitted). See also [NAME] v [NAME], above n 226, at [46] per [NAME], [NAME] and [NAME].

[168] Secondly, we do not accept that the forced sale loss was simply reflective of the “loss” of the right to [NAME]. The High Court found that [NAME] [RESPONDENT] purchased the property in 2004 “on the basis that there was no resource consent”, and that the forced sale in 2009 was transacted “effectively on the same basis”.258 On that basis the price difference was “attributable to his having no option but to sell to avoid a mortgagee sale”, rather than to any loss of quarrying rights.259 [169] As to the issue of distinctness, we note the observation of [NAME] in [NAME] v [NAME] ([NAME]) [COMPANY] that it is “a question of fact and degree whether damage is sufficiently distinct to result in a separate cause of action”.260 We are not persuaded on the evidence and submissions before us that departure from the factual findings below on this issue is appropriate.261 [170] We therefore confirm the decision of the Court of Appeal in respect of the forced sale loss. There was no challenge before us to the methodology adopted by the Courts below in fixing damages under this head at $90,000. We adopt that figure and confirm the award of damages in that sum. Misfeasance: was the Court of Appeal wrong to reverse the High Court’s conclusion on misfeasance? [171] Again, we have summarised the divergent conclusions of the High Court and Court of Appeal at [63] and [75]–[76] above. [[NAME] held that the Council was not liable for misfeasance because, in exercising enforcement powers, no officer of the Council knowingly exceeded, or was recklessly indifferent to, the scope of their legal authority.262

258 [NAME] judgment, above n 23, at [555]. 259 At [555]–[556]. 260 [NAME] v [NAME] ([COMPANY], above n 67, at 424 per [NAME]; Mount Albert Borough Council v [NAME], above n 67, at 239–240 per [NAME], and 243 per [NAME]. See also [COMPANY] v [NAME], above n 229, at [49], n 20. 261 Due to the significantly different approach taken in the High Court, this issue was not squarely addressed at first instance, but the Judge’s treatment of this head of loss appears consistent with its being distinct in kind from the other losses. [ADDRESS] also treated forced sale losses as distinct from loss of opportunity and consequential expenditure (albeit in a different legal context) in [NAME] v [NAME] [COMPANY] [2025] NZSC 68, [2025] 1 NZLR 306. 262 [NAME] judgment, above n 23, at [181]–[184].

[172] In reaching this conclusion, the Court of Appeal applied the legal principles for misfeasance in a [NAME] stated by that Court in [NAME] v Attorney-General.263 That decision defined four limbs to the tort:264 (a) The [NAME] held a [NAME].265 (b) In purported exercise of a public power, the officer knowingly acted, or omitted to act, unlawfully (either with actual knowledge that their acts or omissions went beyond the limits of their legal authority, or with reckless indifference as to those limits). (c) In doing so they acted, or omitted to act, either with malice toward the plaintiff or with knowledge of, or reckless indifference toward, the fact their conduct was likely to cause harm to the plaintiff. (d) The plaintiff suffered loss caused by the misfeasant act or omission. [173] We note that the correctness of the principles in [NAME] was not itself challenged by either party. Submissions [174] [NAME] [NAME] maintained his argument that misfeasance occurred both before and after the discovery of the consent, his argument before us focussed on events after discovery. That was in September 2009. He submitted that the evidence showed that Council officers were then recklessly indifferent as to the limits of their authority, and recklessly indifferent as to the consequences for [NAME] [RESPONDENT]. After discovery of the consent, the Council maintained enforcement action (which had been premised on the non-existence of existing use rights or an LUC) and continued

263 Garrett v Attorney-General, above n 60, as cited in [NAME] judgment, above n 23, at [180]–[181]. See generally [NAME] “Abuse of [NAME]” in [NAME] and others (eds) [NAME] on Torts (9th ed, Thomson Reuters, Wellington, 2023) 1211 at [18.2]. 264 See also Currie v Clayton [2014] NZCA 511, [2015] 2 NZLR 195 at [40]. 265 Or, in cases of vicarious liability, the [NAME]’s servant or agent: see [NAME] v Home Office [1994] 2 AC 45 (HL) at 53.

to maintain that [NAME] [RESPONDENT] was not entitled to operate the [NAME]. It was that conduct which [NAME[NAME] considered tipped the balance in favour of an award.266 [175[NAME] [NAME] also submitted that the Court of Appeal was wrong to diminish the importance of the Council’s failure to withdraw the enforcement proceedings because legal discussions were occurring between the parties as to adjournment of the proceedings. That did not excuse the Council’s actions, he said. In any event, by that point “the die was cast” and the mortgagee sale was in train. Discussion [176] Our factual conclusions in respect of fraudulent concealment (under the first, limitation issue) must at least for practical purposes also resolve this cross-appeal. We have found the Council to have been negligent in its management of records and in relation to the enforcement action it took against [NAME] [RESPONDENT]. But we do not find it acted during this time with any awareness of the existence of a consent. If existing use rights were involved, that was a matter for [NAME] [RESPONDENT] to establish. [177] It cannot in our view be said on the evidence before us that the Council’s officers knew their acts or omissions exceeded the scope of their legal authority or were recklessly indifferent as to that fact. That in effect resolves the claim for misfeasance in respect of the Council’s conduct before the LUC was discovered. [178] The Council’s subsequent actions, on [NAME] [RESPONDENT]’s production of the consent, were dilatory and ungracious. We agree with the Court of Appeal’s observation that the Council should have withdrawn and apologised at that time.267 However, and as the Court of Appeal found, the litigation context clouds the condemnation which this conduct might otherwise earn. The abatement notice was in any event withdrawn by letter from the Council dated 15 October 2009, and [NAME] [RESPONDENT]’s involvement in the [NAME] appears to have ended with its sale six weeks later.

266 [NAME] judgment, above n 23, at [342]–[343]. 267 [NAME] judgment, above n 23, at [186].

Conclusion on misfeasance [179] It follows we do not accept the argument advanced by [NAME] [RESPONDENT] on cross-appeal as to misfeasance in a [NAME]. It is therefore unnecessary to consider the issue of exemplary damages. That aspect of the cross-appeal will also be dismissed. Result [180] The appeal is allowed in part. The finding that the appellant fraudulently concealed the respondent’s right of action is set aside. [181] The appeal in respect of the award of damages of $90,000 for loss of the value of the [ADDRESS] property, and interest on that sum in the terms set out by the High Court, is dismissed. [182] The damages awarded to the respondent are otherwise set aside. [183] The cross-appeal is dismissed. [184] Making a modest deduction of $5,000 for the modest achievement noted above at [181], the respondent must pay the appellant costs of $45,000 plus usual disbursements. We allow for [NAME]. [NAME] of Contents

Para No Introduction [185] What amounts to a fraudulent concealment for the purposes of s 28(b)? [197] Legislative history and purpose [199] [NAME] [208] [NAME] [237] [NAME] [240] The principles to be applied in this case [241] [NAME]’s objections to a test which includes recklessness [246] The factual context in this case [255] The Council’s wrongful conduct [255]

The narrative that emerged at [NAME] [258] Conclusion [288] Introduction [185] I agree with [NAME] that the cross-appeal should be dismissed. However, I would have upheld the findings in the Court of Appeal that the appellant fraudulently concealed the respondent’s right of action, and therefore would have upheld the quantum of damages awarded by the Court of Appeal. I now provide reasons for my dissent on those points. [186] In deciding the appeal, [NAME] have accepted aspects of the test proposed by the Council for fraudulent concealment, which as [NAME] explain, is largely derived from the judgment of the Court of Appeal in [COMPANY] v [COMPANY].268 It is convenient to repeat the Council’s formulation of that test here, as stated by [NAME]:269 (a) the [NAME] must have known [in the sense of having had actual knowledge of or wilful blindness to] the essential facts comprising the right of action; (b) the [NAME] must also have appreciated [in the sense of having actually known or been wilfully blind to] (in light of the known facts) that he or she had committed a wrongful act such that they were aware of the right of action and could have disclosed it; (c) the [NAME] must have owed a duty to the plaintiff (whether a fiduciary duty or some other special relationship) to disclose the material facts; and (d) having knowledge of all the foregoing, the [NAME] must have failed to disclose the right of action with the result that it was concealed “by means that would attract the epithet ‘wilful’ or ‘deliberate’”. [187] [NAME] leave for another day whether element (c) above, formulated by the Court of Appeal in [NAME], must be established for fraudulent concealment.270 [NAME] says that it is unnecessary to decide, because there clearly was such a duty in this case.271 [NAME] also qualifies element (b) by saying it does not

268 [COMPANY] v [COMPANY] [2010] NZCA 631. 269 Above at [84]. 270 Above at [127]–[130]. [NAME], above n 268, at [41] and [47]. 271 Above at [130].

consider [NAME], in [RESPONDENT], was suggesting the [NAME] needed to appreciate the exact legal form the wrongful act took.272 [188] I disagree with [NAME]’s test for the application of s 28(b) of the Limitation Act 1950 (1950 Act). I set out a summary of my reasons for this, expanding upon them more fully below. [189] [NAME]’s test does not accord with the language of the provision. As [NAME] accepts, the word “fraud” in s 28(b) has a particular meaning, specific to that context. It is used in the sense of equitable fraud.273 Equitable fraud captures the concept of unconscionable conduct, and is not limited to moral turpitude or dishonesty.274 In Sandman v [NAME], this Court made clear that a finding of wilful blindness entails a finding of dishonesty.275 By limiting relevant knowledge to actual knowledge or wilful blindness, [NAME] sets the bar at the level of dishonesty, even in a case where it concedes there was a special relationship giving rise to an obligation of disclosure.276 [190] [NAME]’s test is also overly prescriptive and complex. By setting one standard of knowledge, [NAME] overlook the possible implications of the relationship between the parties in the particular factual matrix giving rise to the cause of action. The test also requires separate analysis of whether [NAME] knew (in the sense of actually knew or were wilfully blind) that they had committed a wrongful act — mere knowledge of the essential facts is not enough. This overlooks the variety of factual circumstances in which the test could come to be applied.

272 Above n 183. 273 Above at [82]. 274 In the context of limitation periods see [NAME] v [COMPANY] [1949] 1 [NAME] 550 ([NAME]) [[NAME] ([NAME])] at 564–566 per [NAME] [NAME[NAME] and 569 per [NAME] LJ; [NAME] v [NAME] [1958] 1 WLR 563 ([NAME]) at 572–573 per [NAME] [NAME]; and [NAME] v [NAME] [1971] 1 QB 406 ([NAME]) at 413 per [NAME] [NAME[NAME]. But it is also the sense in which equitable fraud is used more generally: see [NAME] “Fraud, Undue Influence And Unconscionable Transactions” in [NAME] (ed) Snell’s Equity (35th ed, [NAME], London, 2025) 219 at [8- 001] and [8-002], n 16; [NAME] v [NAME] [1914] AC 932 (HL) at 954 per Viscount Haldane LC; [NAME] of Aylesford v Morris (1873) LR 8 Ch App 484 (Court of Appeal in Chancery) at 490– 491 per [NAME] LC as cited in Nichols v Jessup [1986] 1 NZLR 226 ([NAME]) at 227– 228 per [NAME]; and Armitage v Nurse [1998] Ch 241 ([NAME]) at 250–253. 275 Sandman v McKay [2019] NZSC 41, [2019] 1 NZLR 519 at [78] per [NAME], [NAME] and [NAME] [NAME]. 276 Above at [130].

[191] In agreement with the Court of Appeal, I consider that unconscionable, rather than dishonest, conduct is the standard for equitable fraud for the purposes of s 28(b).277 I also consider that in cases such as the present, where the wrongdoing is not deliberate but negligent, a failure to disclose suspicion of wrongdoing will only be unconscionable where there is some additional level of blameworthiness beyond that inherent in the negligence. [192] [NAME], I address the relevance of a special relationship, because it is necessary to do so to explain the nature of the factual inquiry the court must undertake. On my approach, proof of a special relationship is not a necessary element of fraudulent concealment. The existence of such a special relationship [NAME] be part of the circumstances giving rise to a finding of unconscionability but, as the cases show, unconscionability [NAME] arise from conduct in circumstances where there is no special relationship.278 [193] The ultimate issue is whether there is concealment of a cause of action which amounts to fraudulent concealment.

In all the circumstances of this case, recklessness as to the existence of the essential facts giving rise to a cause of action was enough for the purposes of s 28(b). [194] The Council owed duties of care to exercise reasonable care and skill in keeping the record of resource consents reasonably available for inspection, to exercise reasonable care and skill in the provision of information about such matters, and to conduct reasonably diligent inquiries into the existence of a resource consent whenever that was in issue. As found by the High Court Judge, it failed in those

277 Whangarei District Council v [RESPONDENT] [2024] NZCA 161, [2024] 2 NZLR 660 ([NAME], [NAME] and [NAME]) [[NAME] judgment] at [109]–[111] citing [NAME], above n 274, at 572–573 per [NAME] [NAME[NAME], Guerin v R [1984] 2 SCR 335 at 390 per [NAME], [NAME], [NAME] and [NAME], [NAME]) v [NAME]) [1992] 3 SCR 6 at 57 per [NAME], [NAME], [NAME] and [NAME] and [COMPANY] v [NAME] 2019 [NAME] 42, [2019] 3 SCR 295 at [54] per [NAME], [NAME], [NAME], [NAME], [NAME], [NAME], [NAME] and [NAME]. 278 [COMPANY], above n 277, at [53] per [NAME], [NAME], [NAME], [NAME], [NAME], [NAME], [NAME] and [NAME]; [NAME], above n 274, at 413 per [NAME[NAME]; and [NAME] v [NAME] (a [NAME]) [1973] 1 WLR 29 ([NAME]) [[NAME])] at 35 per [NAME[NAME]. See also [NAME], above n 274, at 572–573 per [NAME[NAME].

duties.279 That is sufficient for the finding of negligence. But there were additional circumstances that rendered Council’s conduct reckless: (a) Through the course of its dealings with [NAME] [RESPONDENT], the Council became aware of evidence that tended to prove that prior to [NAME] [RESPONDENT]’s ownership, and over a lengthy period of time, quarrying had taken place on the site, including commercial quarrying. (b) The Council had not only tolerated that quarrying, but it had levied mineral rates against the site and one of its predecessor territorial authorities had itself taken material quarried from the site. (c) The Council was therefore aware of the likelihood that there would be information on the Council files as to the basis on which quarrying on the site had been conducted. But the Council failed to undertake a search of the archived material. Indeed, for a long time, the Council failed to undertake any search of its records. [195] Building on this finding, in the circumstances of this case, the Council’s failure to search amounted to fraudulent concealment: (a) Council employees also knew that the Council files were the best source of information to clarify the existence of a lawful basis for such quarrying, since the Council was the relevant regulatory body and had a statutory duty to keep records. (b) The Council controlled access to the files. Through control of access to the files, the Council also controlled access to the evidence establishing the Council’s breaches of duty. (c) Council employees’ positive decision not to search those files notwithstanding that evidence amounted to concealing it.

279 [RESPONDENT] v Whangarei District Council [2022] NZHC 1372, (2022) 23 ELRNZ 839 ([NAME[NAME]) [[NAME] judgment] at [22]–[23] and [230]–[231].

(d) There existed a special relationship between the [NAME] [RESPONDENT]. He was a member of the class to which the Council’s statutory duties were owed and the member of that class most directly affected by the Council’s failure to diligently discharge its duties. (e) As noted, given the knowledge of Council employees, the failure to search was reckless. But in light of the duties owed by the Council to exercise reasonable diligence in searching for the information, its relationship with [NAME] [RESPONDENT], its control of the records and its positive decision not to search, that conduct was unconscionable, amounting to equitable fraud. [196] I would therefore have upheld the Court of Appeal’s finding that, on the particular facts of this case, there was fraudulent concealment for the purposes of s 28(b).280 What amounts to a fraudulent concealment for the purposes of s 28(b)? [197] I start with the language of the provision: 28 Postponement of limitation period in case of fraud or mistake Where, in the case of any action for which a period of limitation is prescribed by this Act, either— (a) the action is based upon the fraud of the [NAME] or his agent or of any person through whom he claims or his agent; or (b) the right of action is concealed by the fraud of any such person as aforesaid; or (c) the action is for relief from the consequences of a mistake,— the period of limitation shall not begin to run until the plaintiff has discovered the fraud or the mistake, as the case [NAME] be, or could with reasonable diligence have discovered it … [198] The meaning of this provision “must be ascertained from its text and in the light of its purpose and its context”.281 It is not in dispute that the language utilised in

280 [NAME] judgment, above n 277, at [178]. 281 Legislation Act 2019, s 10(1).

s 28(b) has a special meaning to be ascertained from the required contextual analysis — the relevant context being its historical origins.282 These historical origins assist in understanding the text and its purpose. They also provide necessary context. Legislative history and purpose [199] I adopt the Court of Appeal’s discussion of the purposes of the 1950 Act.[ADDRESS] described the standard account of limitation statutes as serving three purposes:284 (a) [NAME] should be able to rest secure in the reasonable expectation that they will not be held to account for ancient obligations; (b) claims should not be decided on evidence that has become stale through the passage of time; and (c) [NAME] should pursue their claims with reasonable diligence. [200] However, as the Court notes, these rationales might suggest a legislative limitation model requiring a case-by-case evaluative analysis, focused on the facts, evidence and parties’ circumstances.285 This is not the model the 1950 Act adopts. By providing that causes of action founded on tort or contract are not to be brought after the expiry of six years from the date on which the cause of action accrued,286 the Act adopts a rule which bars claims regardless of their substantive merits, the court’s ability to determine the issues fairly between the parties and the cause of delay. [201] This approach, and the detailed provisions in the 1950 Act, are modelled on the Limitation Act 1939 (UK) (1939 UK Act) which codified the law of limitation.287 Prior to the 1939 UK Act, the law was to be found across legislation and in case law. To understand the purpose behind the legislative scheme of the 1950 Act, it is

282 Above at [82] per [NAME] and [NAME] [NAME]. 283 [NAME] judgment, above n 277, at [99]–[103]. 284 At [99]. 285 At [100]. 286 Section 4(1)(a). 287 Limitation Act 1939 (UK) 2 & 3 Geo VI c 21.

necessary to go back to its English origins, at least as far back as the English Statute of Limitations 1623, which established statutory time limits for the bringing of particular forms of actions.288 That Statute had no direct application within the courts of equity but was applied by analogy in those courts unless there was an equitable ground for repelling that application. Those equitable grounds were succinctly described in a leading case as “fraud or any other equitable circumstance”.289 [202] The Supreme Court of Judicature Act 1873 (UK) effected a fusion of common law and equity.290 Because that Act provided that equitable rules were to prevail over common law rules,291 it could be expected that the equitable approach to limitation periods would be applied irrespective of whether the cause of action was previously cognisable at law or equity. However, the approach of the courts was inconsistent, with some courts refusing to apply the fraudulent concealment exception to statutory limitation periods where the cause of action had previously been subject to the jurisdiction of common law courts.292 [203] In the early 1930s the [NAME] was asked by the [NAME] to inquire into whether the law of limitations as captured in statute and judicial decisions required amendment for modern conditions and whether it required unification.293 In a 1936 report, the [NAME] addressed the general model to be applied to limitation, considering the inclusion of a general discretion to extend periods, or alternatively a rule of reasonable discoverability, such that time would begin to run from the time that the plaintiff knew or, but for their own default, might have known, of the existence of a claim.294 The [NAME] rejected either model, concluding that a discretionary standard would be too onerous for the courts, and too uncertain in application. It also rejected a standard of general discoverability. While accepting that such an approach would have “attractive features”, giving relief where the plaintiff was unaware and could not have been aware of their claim until it was

288 Statute of Limitations 1623 (Eng) 21 Jac I c 16. 289 Trotter v Maclean (1879) 13 Ch D 574 (Ch) at 584. 290 Supreme Court of Judicature Act 1873 (UK) 36 & 37 Vict c 66. 291 Section 25(11). 292 [NAME] (Statutes of Limitation) (Cmd 5334, December 1936) at [22]. 293 At [1]. 294 At [7].

barred by statute, the [NAME] said those situations would be comparatively rare, and again the approach would introduce too much uncertainty. Moreover, it considered that the purpose of the statute should go beyond preventing dilatoriness but extend to “putting a certain end to litigation and at preventing the resurrection of old claims”.295 [204] Even so, the [NAME] recommended carrying forward the existing fraudulent concealment exception, so that it would be an answer to a plea of limitation that the plaintiff’s ignorance of the claim was brought about by the fraudulent conduct of the [NAME].296 As to the need for reform, the [NAME] noted the uncertainty in the law in this area following on from the fusion of law and equity and recommended that the law be clarified to provide:297 … that in all cases to which the Statutes of Limitation apply or are applied by analogy, where a cause of action is founded on fraud, … or where a cause of action unconnected with fraud is fraudulently concealed from the plaintiff by the [NAME] or his agent, … the right of the plaintiff to sue shall be deemed to have first accrued at the time when he discovered such fraud or could with reasonable diligence have discovered it … This was the conceptual framework, and by and large the language, carried forward into the 1939 UK Act,298 and then on into New Zealand’s 1950 Act, and other statutes of limitation throughout the Commonwealth.299 [205] There is a considerable body of case English case law, some of which is discussed below, confirming that in the expression “fraudulent concealment” in the 1939 UK Act, “fraud” is used in its equitable sense.300 Since that legislation is the model for New Zealand’s 1950 Act (and for other Commonwealth legislation as I come to), it follows that the word “fraud” in s 28(b) is used in the sense of equitable fraud — a proposition not doubted by [NAME].301

295 At [7]. 296 At [22]. 297 At [22(a)]. 298 See s 26. 299 See, for example, Limitation of Actions Act 1958 (Vic), s 27; Limitation Act 1953 (Malaysia), s 29; Limitation Act 1959 (Singapore), s 29; Limitation Act 1969 (NSW), s 55; and Limitation of Actions Act 1974 (Qld), s 38. 300 Below at [219]–[227]. 301 Above at [82].

[206] It is relevant also that the 1950 Act, like the 1939 UK Act on which it was modelled, contains no principle of reasonable discoverability, and relevant also that the courts have refused to read such a principle into the legislation.302 Part 2 instead contains a series of provisions that detail the circumstances in which a relevant limitation period [NAME] be extended: disability,303 special provisions as to the effect of acknowledgment of the obligation or part payment,304 and fraud and mistake — the provision with which this appeal is [NAME].305 [207] [[NAME] in this case explained the resulting overall scheme of the legislation and how the fraudulent concealment provisions fit within that scheme:306 [103] The 1950 Act mitigates injustice by extending limitation periods in certain circumstances, notably where the plaintiff is under a disability, the action is based on the fraud of the [NAME], the right of action is concealed by the fraud of the [NAME] or their agent, or the action is for relief from the consequences of a mistake. In such cases it is not reasonable to expect the plaintiff to have acted before they ceased to be under a disability, or before they knew of the fraud or mistake or could with reasonable diligence have learned of it. And a [NAME] who has fraudulently concealed the cause of action has no right to repose, for they have only themselves to blame for not being sued in time. Cases in which a [NAME] is said to have concealed the claim warrant an inquiry into the causes of delay, both in the interests of justice in the instant case and to limit incentives to conceal claims in other cases. So long as [NAME] acted unconscionably and [NAME] are not too readily granted an extension, such inquiries do not confront legislative policy behind the fixed period. [NAME] [208] Most of the case law bearing upon the interpretation of s 28(b) is contained in the [NAME]’ interpretation and application of s 26 of the 1939 UK Act. As I explain below, this case law provides authority for the proposition that under that Act, fraudulent concealment captured conduct that did not involve dishonesty or fraud and

302 [NAME] v E [NAME] & [COMPANY] [1963] AC 758 (HL) at 771–772 per [NAME] and [NAME] [NAME], 773–774 per [NAME] [NAME], 776 per [NAME], 784 per [NAME] [NAME]; and [NAME] v [NAME] & Co [COMPANY] [2007] NZSC 27, [2007] 3 NZLR 721 at [2] per Blanchard J, [69] and [74] per [NAME], [101]–[102] per [NAME[NAME] and [142]–[143] per [NAME]. However, ss 23C and 23D of the Limitation Act 1950 create a special limitation regime for actions in respect of the abuse of an [NAME] or in respect of a gradual process, disease or infection injury. This regime confers a discretion upon the court to extend the relevant limitation period. 303 Section 24. 304 Sections 25–27. 305 Section 28. 306 [NAME] judgment, above n 277 (footnotes omitted).

could extend to conduct which could be characterised as reckless in its concealment of wrongdoing, where that reckless conduct was unconscionable in all the circumstances. [209] [NAME] v [COMPANY] was a case [NAME] with a disposal by the [NAME], outside the terms of the bailment.307 The events occurred against the backdrop of World War II. In 1935, the bailor, Ms [NAME], deposited several packages with [NAME], which they were to store and then at a later date send to her in Istanbul.308 They sent one package over in 1936, but Turkish border regulations had been made such that the remaining packages could not be sent. [NAME] agreed to hold those packages pending further instructions. Years passed, and the bailor provided no such instructions. In 1938, [NAME] again contacted her, seeking instructions to insure the baggage and requesting information as to whether there were any very valuable articles in the packages. Ms [NAME] did not insure the items, nor stipulate that there were valuable items in the baggage. She said she hoped to return to England, but she never came. War broke out. Early in 1940, she asked [NAME] if it was possible to send the packages to Greece. They replied it was, sending her the necessary forms, which she did not complete or return. In June, Italy entered the war against Great Britain and shortly thereafter fighting broke out between Greece and Italy. When the Mediterranean Sea closed, communication between Ms [NAME] and [NAME] ceased. At the end of 1940, Ms [NAME] went to India and remained there until the end of the war. She wrote to [NAME], but they did not receive that correspondence. Ms [NAME] thought the packages had probably been destroyed in the bombing of London and made no further inquiry. [210] What happened to the goods? [NAME] had been in rented accommodation. In February 1940, due to the war, [NAME] gave up those premises and began paying a third party to store goods bailed to them. The [NAME] company was controlled by [NAME] and, also due to the war, their business became vested in the Custodian of Enemy Property. With most of the staff at war, the goods stored by a third party, and the company vested in government control, the

307 [NAME] v [COMPANY] [1948] 2 All ER 89 ([NAME]) [[NAME] ([NAME])]. 308 At 90.

business was, as the [NAME] Judge, [NAME[NAME], put it, “practically at an end”.309 The last remaining staff member, [NAME], was to be called up to serve and wished to resolve the status of the packages. Storage fees were due to [NAME], and by them to the third party. In consultation with [NAME] [NAME] superior, it was decided to inspect the goods.310 [NAME] [NAME] thought them worthless, and so the decision was taken to donate them to the [NAME]. Before that occurred, [NAME] helped himself to a suitcase for his own use. [NAME] recorded that the suitcase “was produced at the [NAME] and was obviously of little value”.311 [211] In August 1946, Ms [NAME] visited [NAME] asking after her packages. She was told they had been donated to the [NAME].312 They could not be traced because the [NAME]’s records had been destroyed in the bombing of London. Ms [NAME] alleged the packages had contained highly valuable jewellery (although she had earlier failed to identify valuable items and declined to insure the packages). [212] [RESPONDENT[NAME] said that in assessing the conduct of the [NAME], it was “necessary to recapture the atmosphere of 1940. Goods and chattels were then of small concern compared to the lives of men.”313 It was against this overall background that he found that the bailees had acted honestly in disposing of the goods, and otherwise in their actions.314 Because the Ms [NAME] did not discover the conversion of her goods until after the war, the statutory time limit for her action in conversion had expired. The issue at [NAME] was whether [NAME] had fraudulently concealed their wrongful conduct, so extending that limitation period. [NAME[NAME] found on the facts that [NAME] genuinely believed that the [NAME] was not available.315 He said that for the purposes of both s 26(a) and (b) of the 1939 UK Act (corresponding to s 28(a) and (b) of the 1950 Act) the word “fraud” imported some element of moral turpitude.316 In this case, since there was no moral turpitude, the fraudulent concealment provision did not apply to extend the statutory time limit.

309 At 90. 310 At 91. 311 At 91. 312 At 91. 313 At 94. 314 At 94–95. 315 At 94–95. 316 At 94.

[213] That finding — that for the purposes of s 26(b) fraud requires moral turpitude — was overturned on appeal, on the basis that the s 26(b) proviso was not so limited.317 This decision has therefore long been treated as authority for the Court of Appeal’s finding in this case that fraud in this sense can encompass subjective recklessness. However, [NAME] says [NAME] is not authority for that principle because only [NAME[NAME] mentioned recklessness, and all Judges wrote in language redolent of deliberate and dishonest conduct.318 It says that the case is better viewed as a case of actual knowledge of wrongfulness followed by deliberate deception or wilful concealment. [214] I respectfully disagree with that analysis. It is [NAME] that the language used by all Judges in the Court of Appeal in [NAME] at times employed the language of dishonesty. But it is critical that the [NAME] Judge did not find dishonesty.319 Whilst both [NAME] [NAME] and [NAME] LJ doubted the [NAME] Judge’s finding of honesty, they did not substitute a finding of dishonesty.320 They were each content to proceed on the basis that proof of dishonesty was not necessary for fraudulent concealment — recklessness was enough.321 The third member of the Court, Singleton LJ, was alone in proceeding on the basis that proof of conscious wrongdoing was required, finding, as he explained, ample evidence of it on his analysis of the facts.322 [215] [NAME] note the variety of ways in which [NAME] were reckless.323 These included a failure to communicate with Ms [NAME] to tell her what they had done. [216] In a recent decision of the [NAME], [NAME] v [COMPANY], [NAME] [NAME] reviewed some of the decisions under the 1939

317 [NAME] ([NAME]), above n 274, at 569 per [NAME] LJ. 318 Above at [106]–[108]. 319 [NAME] ([NAME]), above n 307, at 94–95. 320 [NAME] ([NAME]), above n 274, at 563–564 per [NAME[NAME] and 568–569 per [NAME] LJ. 321 At 565–566 per [NAME[NAME] (where he treats recklessness as to the wrongfulness of conduct, and reckless failure to disclose that conduct, as sufficient for the purposes of fraudulent concealment) and at 569 per [NAME] LJ. 322 At 572. 323 Above at [106].

UK Act.324 He noted that in [NAME], while [NAME] [NAME[NAME] referred to recklessness, he did not define it.325 [NAME] [NAME] saw this as significant because of the different definitions of recklessness used in the civil and criminal law. [217] It is [NAME] that [NAME] [NAME[NAME] did not define recklessness for the purpose of his judgment. Yet it is plain enough he used it in the subjective sense. He was using it in the context of a section addressing concealment through equitable fraud — it being necessarily implicit that the conscience of the [NAME] must be affected. As the Court of Appeal in this case observed, in this context, it is reckless to take a risk in circumstances where the [NAME] knows there is a real possibility of harm should they act or fail to act in a certain way, yet proceeds to run that risk, when, in the circumstances known to the [NAME], it was unreasonable to do so.326 [218] [RESPONDENT] was a case involving an intentional tort. The principle articulated by [NAME] [NAME], that subjectively reckless conduct was enough to invoke fraudulent concealment, has however subsequently been applied in cases in the context of other causes of action. [219] At issue in [NAME] v [NAME] was a solicitor’s negligent failure to commence proceedings within time.327 The fact of the expiry of the time period was kept from the plaintiff for a period of time by an (unfavourable) settlement of the primary claim.328 It was found that the doctrine of fraudulent concealment applied to extend the time.329 [220] [NAME] [NAME] said of that finding and its basis:330 I repeat that there is no finding and no justification for any finding of dishonesty as that word is ordinarily understood. But it is now clear that the word “fraud” in [s 26(b) of the 1939 UK Act], is by no means limited to common law fraud or deceit. Equally, it is clear, having regard to the decision in [NAME] v [COMPANY] that no degree of moral turpitude is necessary to establish fraud within the section. What is covered by equitable

324 [NAME] v [NAME] [COMPANY] [2023] [NAME] 41, [2024] AC 679 at [40]–[49]. 325 At [43]. 326 [NAME] judgment, above n 277, at [115]. 327 [NAME], above n 274. 328 At 570 per [NAME] [NAME[NAME] and 579 per [NAME] LJ. 329 At 574 per [NAME] [NAME[NAME], 576 per Parker LJ and 579 per [NAME] LJ. 330 At 572–573.

fraud is a matter which [NAME] [NAME] did not attempt to define 200 years ago, and I certainly shall not attempt to do so now, but it is, I think, clear that the phrase covers conduct which, having regard to some special relationship between the two parties [NAME], is an unconscionable thing for the one to do towards the other. [221] [NAME] [NAME[NAME] thus confirmed that equitable fraud for these purposes can be established in cases where a “special relationship” exists between the parties, but was also explicit that this does not describe the full extent of the jurisdiction — invoking [NAME] [NAME] famous statement: “Fraud is infinite”.331 [222] [NAME] in this case say that [NAME] also should not be regarded as an authority for the proposition that subjective recklessness [NAME] amount to fraud because the solicitors, whose negligence was at issue in the case, deployed a deliberate device to conceal their own wrongdoing.332 That being the case, recklessness did not come into it. Again, I disagree. It is possible to speculate that on the facts of the case, conscious wrongdoing (moral turpitude) could have been found, but that was not the basis on which the case was decided by [NAME]. [NAME] [NAME[NAME] and [NAME] LJ each decided the case on the basis of recklessness.333 [NAME] LJ was reluctant to find solicitors to have fraudulently concealed their negligence in this particular sense, he nevertheless accepted the judgment of [NAME] [NAME[NAME] on the point. [223] The next English case we were referred to was [NAME] v [NAME] (a [NAME]), concerning a [NAME] built with defective foundations.334 On appeal, it was not in dispute that the defect was a breach of an implied warranty that the foundations were reasonably fit for the dwelling; however, the defect was not discovered by the plaintiff until after the expiry of the statutory time limit for contractual causes of action.335 The issue was whether the vendors, who were estate agents, valuers and surveyors practising in the area, had fraudulently concealed the plaintiff’s cause of action. The [NAME] Judge’s finding was that [NAME] ought to have known of the defect

331 Letter from [NAME] [NAME] to [NAME] [NAME] regarding the principles of equity (30 June 1759) in [NAME] A History of the Court of Chancery ([NAME], [NAME], London, 1828) 501 at 508. 332 Above at [112]. 333 [NAME], above n 274, at 573–574 per [NAME] [NAME], with whom [NAME] LJ agreed at 576. 334 [NAME]), above n 278. 335 At 33–35 per [NAME] [NAME[NAME].

and failed to warn the plaintiff of the facts giving rise to the risk, and that was enough.336 [224] There were three sets of reasons in the Court of Appeal. [NAME] [NAME[NAME] commenced with a general statement of principles. He said that the word “fraud” in the expression “fraudulent concealment” in the 1939 UK Act was not used in the common law sense but rather in the equitable sense, to denote conduct that would make it “against conscience” for a [NAME] to avail himself of the lapse of time.337 If the [NAME] knowingly committed a wrong not likely to be discovered “for many a long day, he cannot rely on the Statute of Limitations as a bar to the claim”.338 It is sufficient that he knowingly committed it and did not tell the plaintiff — no further active steps need be shown:339 He conceals it by “fraud” as those words have been interpreted in the cases. To this word “knowingly” there must be added “recklessly” … Like the man who turns a blind eye. He is aware that what he is doing [NAME] well be a wrong, or a breach of contract, but he takes the risk of it being so. He refrains from further inquiry lest it should prove to be correct: and says nothing about it. The court will not allow him to get away with conduct of that kind. It [NAME] be that he has no dishonest motive: but that does not matter. He has kept the plaintiff out of the knowledge of his right of action: and that is enough … If the [NAME] was, however, quite unaware that he was committing a wrong or a breach of contract, it would be different. So if by an honest blunder he unwittingly commits a wrong (by digging another man’s coal), or a breach of contract (by putting in an insufficient foundation) then he could avail himself of the Statute of Limitations. [225] Reviewing the [NAME] Judge’s finding on knowledge, [NAME] found that the [NAME] Judge put matters too low when he found the vendors ought to have known there was a risk of subsidence. [NAME] [NAME[NAME] instead framed his finding in terms of subjective recklessness.340 On his analysis of the evidence the vendors did know of a risk of subsidence “and nevertheless they took their chance on it”, thereby concealing the cause of action.341 This was “unconscionable conduct such as to disentitle them from relying on the statute”.342

336 [NAME] v [NAME] [1972] 1 WLR 801 (QB) at 808 and 812. 337 [NAME]), above n 278, at 33. 338 At 33 citing Bulli Coal Mining Co v Osborne [1899] AC 351 (PC) and [NAME], above n 274. 339 At 34 citing [NAME] ([NAME]), above n 274, at 565–566 and [NAME], above n 274 (citations omitted). 340 At 35. 341 At 35. 342 At 35.

[226] [NAME] LJ found that [NAME] did know all of the essential matters, so that no point of law arose as to the proper interpretation of s 26(b).343 However, he rejected the [NAME] Judge’s finding that “ought to know” was sufficient to establish concealment by fraud:344 [NAME] say that “ought to know” is not enough. I agree. I do not think that the cases go so far; or that, at least as a general principle and in the absence of very special circumstances, the meaning of “concealed by fraud” should be extended to cover a case where the [NAME] … did not know the fact or facts which constituted the cause of action against him. [NAME] LJ therefore did not address subjective recklessness, although it is notable that he contemplates that in “very special circumstances” recklessness, in the objective sense (the reference [NAME] also have been to negligence), might be enough. [227] Reviewing the evidence, [NAME[NAME] found that [NAME] had actual knowledge of the matters the [NAME] Judge had found they ought to have known. [NAME] therefore knew of the risk of subsidence due to the foundations utilised.345 He concluded that their conduct was “unconscionable and reckless”.346 [NAME] was the only Judge to address the existence of a special relationship. He found there was a special relationship of the type referred to in [NAME] because of the relationship of vendor and purchaser.347 [228] [NAME] say that all Judges found actual knowledge of the wrong.348 I do not consider that is correct, and certainly two of the Judges, [NAME] [NAME[NAME] and [NAME[NAME], said they were deciding the case on the basis of recklessness. The explanation of the difference of approach between those two [NAME] LJ [NAME] lie in differing views as to what facts were necessary to establish the cause of action — and in particular whether knowledge of damage was necessary. [NAME[NAME] and [NAME[NAME] seem to have proceeded on the basis that the subsidence completed the cause of action, finding [NAME] reckless as to the risk of that occurring. In contrast, [NAME] LJ found that the warranty was breached at the

343 At 36 and 38. 344 At 36. 345 At 41. 346 At 42. 347 At 41. 348 Above at [114] and [116].

time that it was given, because [NAME] knew that the foundations were not reasonably fit for the dwelling.349 [229] Without excavating which was the better analysis at the time of that decision, it can nevertheless be said that the decision stands as authority for the proposition as stated by [NAME] [NAME[NAME], that recklessness as to the risk of an actionable wrong [NAME] be sufficient knowledge of the cause of action for fraudulent concealment. It can also be said that none of the Judges doubted that recklessness was enough. [230] [NAME]’s analysis of this trilogy of cases builds on that of [NAME] [NAME] in the decision of the [NAME] in [NAME].350 For the reasons I have set out above, I respectfully disagree with [NAME]’s analysis. It is right to acknowledge that each of these cases [NAME] very particular facts. It is [NAME] also that [NAME] is by no means a straightforward case. But in light of the judgments of [NAME] and [NAME] LJ, it is correct to treat it as authority for the propositions that moral turpitude is not required to prove fraudulent concealment and that recklessness as to the risk of an actionable wrong [NAME] be sufficient knowledge for fraudulent concealment. That latter proposition was not doubted in English case law until [NAME], a case decided under a different statute. [231] As to when recklessness will be enough, it is noteworthy that in each of the cases discussed above, [NAME] and [NAME], the Courts identified some blameworthy conduct on the part of the [NAME] which concealed the original wrongdoing but was in addition to it. Each of those cases were decided on the application of principles that were broadly stated — principles tied to unconscionability rather than dishonesty. [232] This approach is consistent with the approach to equitable fraud in other contexts. It is consistent with the long-established understanding of “equitable fraud” as extending beyond dishonest conduct to include unconscionability.351 What amounts

349 [NAME]), above n 278, at 36 and 38. 350 [NAME], above n 324, at [40]–[49]. 351 [NAME], above n 274, at [8- 001] and [8-002], n 16; [NAME], above n 274, at 954 per Viscount Haldane LC; [NAME] of Aylesford, above n 274, at 490–491 per [NAME] [NAME] LC as cited in [NAME], above n 274, at 227– 228 per [NAME] P; and [NAME], above n 274, at 250–253.

to equitable fraud is not capable of strict exhaustive categorisation because of the multiplicity of circumstances in which the issue of blameworthy conduct giving rise to concealment [NAME] arise.352 [233] In argument, we were also referred to more recent [NAME] (including [NAME]).353 However, it is important to note that in 1980, the [NAME] first amended the 1939 Act as it related to fraudulent concealment,354 then enacted consolidating legislation — the Limitation Act 1980 (UK) (1980 UK Act). In the 1980 UK Act, fraudulent concealment is dealt with under s 32(1)(b), which postpones the commencement of the limitation period where “any fact relevant to the plaintiff’s right of action has been deliberately concealed from him by the [NAME]”. Also relevant, s 32(2) further provided that for the purposes of s 32(1): … deliberate commission of a breach of duty in circumstances in which it is unlikely to be discovered for some time amounts to deliberate concealment of the facts involved in that breach of duty. [234] This amendment to the legislation providing for the “fraudulent concealment” exception to statutory limitation periods was preceded by a report of the [NAME] on the limitation of actions.355 In relation to “concealed fraud”, the [NAME] explained that its essential feature was that “it operates on some degree of blameworthiness on the part of the [NAME] beyond his mere failure to comply with his legal obligations; the traditional expression is ‘unconscionable conduct’”.356 It observed that the title and wording of s 26 were misleading in that s 26 “(i) is not limited to fraud in the common law sense; (ii) embraces recklessness; and (iii) is not limited to cases of active concealment”.357 In this, the [NAME] echoed the words of [NAME] in [NAME] v [NAME] that for the purposes of s 26:358

352 See above n 351 and [COMPANY], above n 277, at [54] per [NAME], [NAME], [NAME], [NAME], [NAME], [NAME], [NAME] and [NAME] citing [COMPANY] v [COMPANY] 2002 [NAME] 19, [2002] 1 SCR 678 at [39] per [NAME], [NAME], [NAME], Major, [NAME]. 353 [NAME] v [NAME] (a [NAME]) [2002] UKHL 18, [2003] 1 AC 384; and [NAME], above n 324. 354 Limitation Amendment Act 1980 (UK). 355 [NAME]-First Report (Final Report on Limitations of Actions) (Cmnd 6923, September 1977). 356 At [2.22]. 357 At [2.23]. 358 [NAME] v [NAME] (No 2) [1977] Ch 106 (Ch) at 245.

… as the authorities stand, it can be said that in the ordinary use of language not only does “fraud” not mean “fraud” but also “concealed” does not mean “concealed”, since any unconscionable failure to reveal is enough. [235] The [NAME] made a recommendation as to how this state of the law could be captured in any consolidation.359 That recommendation was not, however, adopted; the wording of s 32 set out above was instead utilised. Importantly, the new s 32 was not an attempted codification of the pre-existing law, a matter which [NAME] [NAME] observed in [NAME] v [NAME] ([NAME]) [COMPANY]:360 … the immediate predecessor of section 32 of the Act of 1980 is not section 26 of the Act of 1939 but section 7 of the Limitation Amendment Act 1980 … in [that] amending Act all references to concealment by fraud were deleted and there was substituted the concept of deliberate concealment of relevant facts. This was done deliberately because of the confused effect and misleading terminology of the old equitable doctrine of concealed fraud. In my judgment it is inconsistent with the plain Parliamentary intention lying behind the amendment of the Act of 1939 to continue to construe the Act of 1980 as if it were still a statutory enactment of the equitable doctrine of concealed fraud. The Act of 1980 is not. [236] For these reasons, cases decided under the 1980 legislation are of limited assistance. It is however necessary to refer to the appellant’s reliance upon [APPELLANT], the recent decision of the [NAME].361 As noted above, [NAME] [NAME], who was writing for the Court, reviewed some of the case law under the 1939 legislation. He did so to support the Court’s decision that under the 1980 legislation, recklessness is not enough for s 32.362 In the present appeal, counsel for the Council drew heavily on that analysis to support their submission that recklessness does not suffice for fraudulent concealment. However, it is a decision under a different legislative framework, and I therefore take my discussion of it no further. [NAME] [237] We were also referred to [NAME]. The principle that unconscionability is the touchstone for equitable fraud in this context, rather than proof of dishonesty or moral turpitude, is well established in Canada. Four of the eight

359 [NAME], above n 355, at [2.24]. 360 [NAME] v [NAME] ([NAME]) [COMPANY] [1996] 1 AC 102 (HL) at 145. 361 [NAME], above n 324. 362 At [153].

Judges of the Supreme Court of Canada applied [NAME] in the case of [NAME] v R, finding that the Crown could not rely upon a limitation period to bar a claim by an [NAME].363 Although in that case the Crown had not acted dishonestly or with improper motives, or with knowledge that its own acts were wrongful, it failed to make full disclosure to [NAME] of a lease entered into by the Crown on behalf of [NAME] in respect of valuable reserve land.364 This non-disclosure was found to have concealed the existence of a cause of action and was unconscionable having regard to the fiduciary relationship existing between the parties in respect of the use of the land.365 [238] In a later case of [COMPANY] v [NAME], the issue was revisited by the Supreme Court.366 That case [NAME] the certification of a class proceeding against manufacturers of optical disc drives for price fixing. Part of the claim was outside of statutory time limits, and the issue for the Court was whether it was plain and obvious that the action was time-barred or whether fraudulent concealment could extend the time, notwithstanding the absence of a fiduciary relationship.367 [239] Writing for [NAME], [NAME[NAME] cited the dicta from [NAME] [NAME[NAME] in [NAME] set out above, in support of the propositions that proof of moral turpitude is not required to make out fraudulent concealment and that it is not possible or appropriate to attempt to exhaustively define the circumstances in which it [NAME] be invoked.368 [NAME[NAME] said that the inquiry for the Court was whether it was “for any reason, unconscionable for the [NAME] to rely on the advantage gained by having concealed the existence of a cause of action”.369 The breadth of that principle lay behind the Court’s rejection of a requirement that a special relationship exist between the parties.

363 [NAME], above n 277, at 390 per [NAME] and [NAME] [NAME]. 364 At 356, [NAME], [NAME] and [NAME] record the [NAME] Judge’s finding that the Crown’s conduct flowed “from [the Crown’s] paternalistic attitude to [NAME] rather than from any intent to deceive them or cause them harm”. At 390, [NAME] and [NAME] [NAME] find that: “Although the [NAME] officials did not act dishonestly or for improper motives in concealing the terms of the lease from [NAME], … their conduct was nevertheless unconscionable, having regard to the fiduciary relationship between the [NAME] and [NAME].” 365 At 390 per [NAME] and [NAME]. 366 [COMPANY], above n 277, at [51]–[55] per [NAME], [NAME], [NAME], [NAME] and [NAME] [NAME]. 367 At [25] per [NAME], [NAME] and [NAME] [NAME]. 368 At [52]–[53]. 369 At [54] (emphasis in original).

[NAME] [240] As to authorities in New Zealand relating to the application of s 28(b), we were referred to [COMPANY] v [NAME]) [COMPANY] v [NAME] and [NAME].370 As the Court of Appeal observed, and [NAME] in this case accept, the critical issue as to whether recklessness will suffice for fraudulent concealment has not arisen directly in New Zealand before, as these cases were all [NAME] with wilful non-disclosure, not recklessness.371 I do not discuss those cases further although, of course, my reasons necessarily engage with the test extracted from the discussion in [NAME]. The principles to be applied in this case [241] Based on the foregoing analysis, I conclude that s 28(b) was intended to, and did, carry forward the equitable jurisdiction to relieve against the application of statutory time limits where the existence of the cause of action has been concealed through conduct of the [NAME] that amounts to equitable fraud. The legislative history of the provision, including the history of its English forebear, supports that conclusion, as does the line of English cases referred to above. [242] In s 28(b), fraud is not used in the common law sense of that word. It need not entail moral turpitude or dishonesty on the part of the [NAME]. It need not entail subjective knowledge that the [NAME] has committed a wrongful act. Rather, it refers to some conduct on the part of the [NAME] that has the effect of concealing the essential element or elements of the cause of action such that it is unconscionable for that [NAME] to be able to rely upon a limitation defence. [243] At least in the case of negligence, that blameworthy conduct must be additional in some way to the wrongful conduct which makes up the cause of action. That must be so, because to find otherwise would fundamentally undercut the statutory time limit for tort claims. But recklessness is different to negligence, because inherent the concept of recklessness is subjective knowledge of risk taking, which engages the

370 [COMPANY] v [NAME]) [COMPANY] [1979] 2 NZLR 700 (SC); [COMPANY] v [NAME] [1989] 1 NZLR 525 ([NAME]); and [NAME], above n 268. 371 [NAME] judgment, above n 277, at [114]; and see above at [103]–[104] per [NAME], [RESPONDENT] and [RESPONDENT] [NAME].

conscience of the [NAME]. This involves a state of mind which, in the particular circumstances of the case, [NAME] mean that the [NAME]’s conduct is blameworthy such that they should not be able to invoke a statutory limitation defence. Negligence is merely a failure to comply with a particular standard of conduct and [NAME] not engage the conscience of the [NAME] at all.372 [244] I have limited this analysis to cases involving negligence. Given the multiplicity of causes of action, circumstances and relationships between plaintiff and [NAME] that the rule must respond to, I do not think it appropriate to attempt a comprehensive account of when the fraudulent concealment definition will be applied. In my view, it is for this reason that the courts applying the English-equivalent statutory provision under the 1939 UK Act resisted the temptation to create a comprehensive definition of equitable fraud.373 [245] I do not consider that the language of s 28(b), when interpreted in light of its text, purpose and context, supports limiting its application to cases in which it can be shown that the [NAME] had actual knowledge or was wilfully blind to the essential facts comprising the cause of action and knew they had committed a wrongful act. It is at least clear that recklessness [NAME] be enough in some circumstances. In [NAME] and [NAME], recklessness was sufficient because special relationships existed between the parties such that acting recklessly was blameworthy. In each of those cases, the [NAME]’s actions kept the knowledge of their wrong from the plaintiff, in the context of a relationship that gave them control over access to that information. That said, the cases make clear that the requisite blameworthiness [NAME] be found outside of a special relationship. The essential issue is whether, in all the circumstances of the case, blameworthiness on the part of the [NAME], above and beyond the blameworthiness inherent in the negligence, means that it would be unconscionable for the [NAME] to avail themselves of the statutory limitation defence.

372 [NAME] [NAME] “Varying the standard of care in negligence” (2013) 72 CLJ 651 at 679. 373 See above at [220]–[221] and [224]–[226].

[NAME]’s objections to a test which includes recklessness [246] [NAME] advance several reasons as to why subjective recklessness should not in this case, or indeed in any case, suffice as a basis to invoke the doctrine of equitable fraud. Most of these reasons are addressed above, but it might assist comprehension if I set out, in short order, how my reasons differ on these points. [247] First, [NAME] says there are sound policy reasons for clarity in the definition and extent of an exception to a [NAME], time-based statutory rule of limitation.374 But on either approach ([NAME]’s or mine) the application of s 28(b) requires a case-by-case analysis. On either approach, questions about the sufficiency of the [NAME]’s knowledge arise.375 Therefore, setting the threshold at dishonesty does not deliver clarity. As the Court of Appeal observed:376 Cases in which a [NAME] is said to have concealed the claim warrant an inquiry into the causes of delay, both in the interests of justice in the instant case and to limit incentives to conceal claims in other cases. So long as [NAME] acted unconscionably and [NAME] are not too readily granted an extension, such inquiries do not confront legislative policy behind the fixed period. [248] [NAME], [NAME] says that setting the threshold at actual knowledge or wilful blindness ensures that the failure to disclose is unconscionable.377 [NAME] says that this approach avoids unjustified condemnation of a [NAME] acting in complete ignorance of the essential facts and averts the risk of simply assimilating the s 28(b) limitation to the cause of action whenever carelessness is involved. [249] I agree that the statutory scheme requires that s 28(b) not be given an interpretation such that the exception consumes the rule. As I explain above, on my approach, where the wrongdoing is not deliberate but negligent, a failure to disclose suspicion of wrongdoing will only be unconscionable where there is some additional level of blameworthiness beyond that inherent in the negligence.378

374 Above at [123]. 375 [NAME] judgment, above n 277, at [146]. 376 At [103]. 377 Above at [124]. 378 Above at [245].

[250] On the other hand, the error in [NAME]’s approach flows from the attempt to create rules that apply in all circumstances and thereby, it says, avoid being overinclusive. But [NAME]’s comprehensive framework will inevitably result in [NAME] being able to invoke the limitation period even though it is unconscionable for them to do so. As described above, earlier authority makes clear the case-by-case analysis required to preclude [NAME] from unconscionably invoking the limitation period. [251] Third, [NAME] says that the scheme of the Limitation Act 2010 supports the conclusion that its drafters saw no need to loosen the meaning of fraud to include recklessness.379 In my view, it is difficult to read the 2010 Act as casting any light on the issue now before this Court. That is because the 2010 Act adopts a very different model — including as a general exception to limitation periods for “money claims” (which include tortious claims for monetary relief) a limitation period starting after a “late knowledge date”, which is the date on which the claimant gained knowledge or ought reasonably gained knowledge of the essential facts of the claim.380 In substance then, it adopted the reasonable discoverability rule, which had been considered and rejected for the 1939 UK Act and the 1950 Act, and which this Court had said was not available under the 1950 Act.381 Given the adoption of that rule, the equitable fraud exception could have no work to do. The new legislative scheme does not focus on the [NAME]’s conduct — but rather whether the plaintiff knew or ought to have known of particular facts about the cause of action. It is therefore considerably more protective of the plaintiff’s rights than the [NAME] regime. If this legislative regime had been in force, it seems very likely that [NAME] [RESPONDENT] would have fallen squarely within the “late knowledge” proviso. [252] As part of this third objection [NAME] also says that this Court should not now “tinker” with the principles relating to limitation settled under [NAME] because the context of the 2010 Act suggests that fraudulent concealment needs to be deliberate.

379 Above at [125]. 380 Sections 11(2)–(3) and 14. 381 [NAME], above n 302, at [2] per [NAME[NAME], [69] and [74] per [NAME[NAME], [101]–[102] per [NAME[NAME] and [142]–[143] per [NAME].

[253] In response, it must be observed that [NAME] did not in any sense settle the law on the point at issue on this appeal. [[NAME] was hearing an appeal from a strike-out decision. It upheld the refusal to strike out on the basis of a limitation defence, because there was an arguable case that the [NAME] knew the relevant facts and an arguable case also that the [NAME] knew it was under a contractual duty to disclose them to the plaintiff. [[NAME] was satisfied that if these facts were established at [NAME], that would amount to a wilful non-disclosure.382 [254] Fourth, and finally, [NAME] says that in this case there is no injustice in their approach because [NAME] [RESPONDENT] could have claimed against the lawyer who gave him defective legal advice.383 However, the fact [NAME] [RESPONDENT] could have claimed against his lawyer is simply not relevant to the question of whether the Council fraudulently concealed his cause of action and acted unconscionably in so doing. That is the issue before us on appeal. The factual context in this case The Council’s wrongful conduct [255] The [NAME] Judge found that the Council had statutory duties:384 (a) Under s 35 of the [Resource Management Act 1991 (RMA)] to gather information and keep records of resource consents; and (b) Under s 322 of the RMA to have reasonable grounds for believing that the circumstances justifying the service of an abatement notice exist … [256] He further found that these duties provided a basis for holding that the Council owed to the public (including [NAME] [RESPONDENT], potential objectors and other interested parties) common law duties to:385 (c) Exercise reasonable care and skill in keeping the record of resource consents reasonably available for inspection; (d) Exercise reasonable care and skill in the provision of information about such matters; and

382 [NAME], above n 268, at [43] and [47]–[50]. 383 Above at [126]. 384 [NAME] judgment, above n 279, at [185]. 385 At [185].

(e) Conduct reasonably diligent inquiries into the existence of a resource consent whenever that was in issue. [257] The Judge found the Council breached its common law duties to [NAME] [RESPONDENT] continuously from November 2004 to September 2009 by:386 (a) Failing to keep a copy of the 1988 LUC in its register of the current files related to the [ADDRESS] property so as to make it “reasonably available at its principal office”; (b) Failing through its officers to conduct diligent searches for the existence of a consent: (i) On 21 February 2005 when the first abatement notice was issued; (ii) When [NAME] [RESPONDENT] made the 2005 application for resource consent; (iii) When the Council opposed [NAME] [RESPONDENT]’s 2006 application for a resource consent on the grounds that there was no existing consent and required him to publicly notify the application; (iv) At the time of the subsequent abatement notices and the enforcement application to the [ADDRESS]; and (v) Every time the Council provided [NAME] [RESPONDENT] with an incorrect response to a request for information about the existence of a consent. The narrative that emerged at [NAME] [258] It was a significant feature of the [NAME] that none of the Council officers involved in the critical dealings with [NAME] [RESPONDENT] were called by the Council to give evidence. One, [NAME] [NAME], was uncontactable; one, [NAME] [NAME], was out of the jurisdiction (it is not clear whether any attempt was made to call him). Ms [NAME] was an employee of the Council when the proceedings were issued and discussed giving evidence with the Council’s lawyers. The Judge inferred from Council’s failure to call her that her evidence would not have helped the Council’s case.387 [259] When [NAME] [RESPONDENT] was considering purchasing the [ADDRESS] land and [NAME], the land’s owner, [NAME] [NAME], gave him what turned out to be an accurate narrative of facts. The land had been a [NAME] since 1964 and had been in operation

386 At [23]. 387 At [323].

since then. A [NAME] [NAME] inspector gave evidence that sometime between 1988 and 1995 one of the Council’s predecessor territorial authorities had been carting metal out of the [NAME]. The [NAME] had long been rated on the basis that it was land on which mineral extraction took place. It was clear, from the condition of the site, that there had been quarrying on site in the past. [260[NAME] [RESPONDENT] requested a land information memorandum (LIM) from the Council prior to settling the purchase of the land. The LIM showed no record of any permit or consent affecting the land. [NAME] [RESPONDENT] was not surprised. He believed there were at least existing use rights. [261] The first abatement notice was issued by the Council on 21 February 2005. A week later [NAME] [RESPONDENT] wrote to the Council responding to that statement including the following: While I am happy to apply for a resource consent, I find it hard to believe that the council has not issued a consent to the [NAME] as the [NAME] has been in use for 35 years that I know of, and I believe it unlikely that council would condone long-standing non-permitted quarrying for more than three decades. [NAME] have been collecting rates on it as a [NAME] all through that time. [262] At this point, [NAME] [RESPONDENT] was asserting the existence of a consent. [NAME] [RESPONDENT] followed up with an application for resource consent. In his accompanying letter, while again asserting long-standing quarrying acquiesced to by the Council, he raised the possibility of existing use rights under the RMA. This assertion of existing use rights was, of course, a natural position in the face of Council’s assertion that there was no existing consent — an assertion contained in the LIM, but repeated by means of the issue of an abatement notice and the requirement to apply for a resource consent. [263[NAME] [NAME], the [NAME] owner of the property, provided a written statement to the Council in support of [NAME] [RESPONDENT]’s request that the application for resource consent proceed on a non-notified basis. [NAME] [NAME] detailed the quarrying that had taken place on the land by his father, and then by himself when he bought the property in 1978. He narrated long-standing use of the [NAME], the carrying out of commercial quarrying by the [NAME[NAME] and the likewise long-standing rating of the property on the basis that it was in commercial use as a [NAME].

[264] The Council did not pause to check its records in light of this information evidencing long-standing quarrying on the site. The Council rejected the application for resource consent as incomplete on the day it received it. By letter dated 17 March, [NAME] [NAME] on behalf of the Council responded to the matters raised by [NAME] [RESPONDENT]. He maintained that [NAME] [RESPONDENT] needed a resource consent. He said that having received complaints about the quarrying, the Council was obliged under s 84 of the RMA to ensure compliance with the provisions of the District Plan. As to the claim the site had been quarried by the [NAME], [NAME] [NAME] merely responded: The [NAME] of the [NAME] were not issued with an abatement notice as far as I am aware. Council usually becomes involved in these issues when we receive complaints. As far as I am aware no complaints were received about the [NAME]’ activities. [265] The initial abatement notice was withdrawn in November 2005 because of a defect, but new abatement notices were issued that same month. In December 2005, the Council issued infringement notices, each notice imposing a fine of $750. [NAME] [RESPONDENT] was advised that further activity relating to mineral extraction would result in further infringement notices. [266] By 2006, [NAME] [RESPONDENT] had engaged extensive [NAME] assistance to help him deal with the perplexing situation in which he found himself. He owned a [NAME] that had been worked for decades, in a regulatory environment that carefully prescribed the circumstances in which such activity could be lawfully conducted (resource consent or existing use rights), and yet the Council claimed it had no record that there was a lawful basis for that quarrying. He filed a fresh application for resource consent. However, engaging planning experts did not assist [NAME] [RESPONDENT] in persuading Council either that the quarrying was being lawfully undertaken or that his resource consent application should be considered on the basis that commercial quarrying had been taking place on the site for decades. In fact, things only became more complex for him. [267] In March 2006, [NAME] [RESPONDENT] sought and obtained a search warrant for [NAME] [RESPONDENT]’s property. In the affidavit in support of the application, [NAME] [NAME] deposed that a resource consent was required for quarrying of that quantity, but there was no resource consent. He stated his belief that the quarrying activity was in breach of the

RMA and that offences had been committed. That search warrant was executed on 8 March, with police in attendance. [268] Shortly after, the Council obtained information from the Department of Labour that significant tonnage was extracted from “[NAME] [NAME]”. That information was shown to a [NAME] of [NAME] [RESPONDENT], who claimed that the “[NAME] [NAME]” referred to in those figures, was in fact located elsewhere in the region — on [NAME] — and not on [NAME] [RESPONDENT]’s property. The Council did not immediately speak to [NAME] or [NAME] [RESPONDENT] about this claimed confusion. It did however make inquiry of [NAME]), who had collected the tonnage information provided by the Department of Labour. [NAME] concluded that the figures it had collected [NAME] have inadvertently been in relation to a [NAME] on [NAME]. But, it said, it could not confirm this disparity, as the records were historical. [269] In November 2006, [NAME] met with [NAME] [RESPONDENT]’s planning advisors and presented his own conclusion that the extraction records relied upon by [NAME] [RESPONDENT] for the [NAME] were in fact for a [NAME] on [NAME]. [NAME] told [NAME] [RESPONDENT]’s advisors that it was for them to produce records of extraction volumes, because the [NAME] had no records. He suggested that in light of this information the application for resource consent should proceed on its merits, and not on the basis of existing use rights. [270] In fact, [NAME]’s advice, as set out above, had been more equivocal than represented by [NAME] [NAME], and no search of the Council records had been undertaken to check this new version of events proposed by [NAME] [NAME]. Moreover, even if the particular figures came from another property, this did not disprove the information the Council had been provided — that commercial quarrying had taken place over a lengthy period of time at the site, as reflected in mineral rates being levied and paid by the [NAME], and that the Council had itself used that commercial [NAME]. [271] In November 2006, the Council cancelled the mineral rates assessment for the site.

[272] A hearing of the resource consent application took place the same month. The Council opposed the application, asserting in written submissions that there was no resource consent for quarrying activities nor written confirmation of any existing use rights issued by the Council. The [NAME] therefore proceeded to determine the application on the basis that there was no existing consent. While evidence of existing use was produced, the [NAME] found that the level of use fell short of the level [NAME] [RESPONDENT] wished to extract. On 2 February 2007, the application for a resource consent was declined. [273] Further abatement and infringement notices from the Council followed over the next two years. At the same time, [NAME] [RESPONDENT] and his advisors continued to pursue access to information and material from the Council’s records to support [NAME] [RESPONDENT]’s assertion that there must be a lawful basis for quarrying on the site. In November 2007, through his solicitors, [NAME] [RESPONDENT] requested any material documenting consideration of existing use rights by Ms [NAME], the enforcement officer who issued an abatement notice the [NAME] month. [274] On 10 December 2007, the solicitors again wrote to the Council, on this occasion making a request under the Local Government Official Information and Meetings Act 1987 (LGOIMA) for any information held by the Council regarding mineral extraction or quarrying on the site and any and all information held on file for the property, including historical records. The letter included the following statement: “Pursuant to section 11 of LGOIMA, we request the Council’s reasonable assistance in notifying us of any records that [NAME] be missing, or archived, or destroyed, relating to the property.” In late January, the Council provided 834 pages but did not, notwithstanding the explicit request, search its historical records. Nothing of assistance to [NAME] [RESPONDENT]’s request was received. [275] On 31 July 2009, the Council applied to the [ADDRESS] for an enforcement order. [NAME] [NAME] swore an affidavit in support of that application. He narrated the long history of complaints regarding “unlawful mineral extraction activities” being undertaken by [NAME] [RESPONDENT] and his company. The affidavit detailed the procedural history in connection with abatement and infringement notices and the failed application for resource consent. It recorded that from time-to-time [NAME] [RESPONDENT]

had asserted existing use rights, but noted that [NAME] [RESPONDENT] had never established that the [NAME] owner had worked the [NAME], and opined that it was in any case improbable that the level of activity would have been at the level of recent activity. [NAME] [NAME] also made reference to the very difficult relationship Council staff had with [NAME] [RESPONDENT] from their very first interactions. [276] The commencement of enforcement proceedings prompted [NAME] [RESPONDENT]’s solicitors once again to request the Council for its historical records. His solicitors requested “all files relating to the [NAME] operation, including rates, any infringement notices, mineral extraction records etc”. This request seems to have been received by a different staff member from those with whom [NAME] [RESPONDENT] usually dealt. That staff member accessed the historical records, which contained a land use consent granted in 1988 to the “[NAME[NAME]” to operate a [NAME] for the extraction of red [NAME] rock at the [ADDRESS] property. They were the commercial operators [NAME] [NAME] had identified in his correspondence to the Council supporting [NAME] [RESPONDENT]’s first application for resource consent. [277] The existence of this consent was of profound importance to [NAME] [RESPONDENT]. It vindicated his position — maintained throughout — that it was highly probable there was a lawful basis for the quarrying on site. If it had been produced in response to the repeated requests made of the Council to search their records, including requests asking them to search for archived material, it would have changed the course of events affecting [NAME] [RESPONDENT]’s use of the land. That this is so is evidenced by the ease with which the subsequent owner was able to progress their own consent application.388 [278] Even with the discovery of the consent, further procedural complexity still lay ahead for [NAME] [RESPONDENT], as is narrated in the judgments of the courts below.389 I do not rehearse that here.

388 At [94]; and see [NAME] judgment, above n 277, at [40]–[42]. 389 [NAME] judgment, above n 277, at [35]–[40]; and [NAME] judgment, above n 279, at [11].

[279] Because the key Council officers did not give evidence, the Court of Appeal considered that it was not at a disadvantage when making findings regarding the officers’ knowledge.390 I consider that the same is [NAME] in this Court. [280] [[NAME] found that the Council officers were subjectively reckless as to the existence of a consent.391 As the [NAME] Judge found:392 … the Council’s officers acted recklessly in assuming the consent did not exist, despite evidence to the contrary, and in failing to make proper inquiries at relevant times, especially when issuing enforcement proceedings. [281] A finding of subjective recklessness was inevitable. For example, as the Court of Appeal recorded:393 [173] To recap, the Council now accepts that none of its officers searched any Council records for a consent or existing use rights at any time between November 2004, when the LIM was issued, and 25 January 2008, when the Council responded (without finding the 1988 land use consent) to the first official information request from [NAME] [RESPONDENT]’s solicitors. [282] The High Court Judge’s finding, adopted by the Court of Appeal, was that the Council officers failed to diligently search the files.394 [283] As noted above, the failure to conduct the search was negligent. But there were additional circumstances that render Council’s conduct unconscionable, so as to amount to fraudulent concealment. [284] It is important to note that there was a special relationship between the [NAME] [RESPONDENT]. He was a member of the class to which the statutory duties set out in the RMA were owed. As the owner of the land, he was the member of that class most directly affected by the Council’s failure to diligently discharge those duties. [285] From very shortly after the purchase of the property, [NAME] [RESPONDENT] put information before Council which suggested that there was a lawful basis for the operation of a [NAME] on site — the information from the [NAME] [NAME] [NAME] that

390 At [163]. 391 At [178]. 392 [NAME] judgment, above n 279, at [342]. 393 [NAME] judgment, above n 277. 394 [NAME] judgment, above n 279, at [23(b)]; and [NAME] judgment, above n 277, at [6].

the [NAME[NAME] had undertaken commercial quarrying onsite, and the long-standing collection of mineral rates for the property by the Council. He initially suggested that lawful basis was provided by a resource consent, and then by existing use rights. Throughout the period from 2005 until the Council finally conducted a proper search in 2009, [NAME] [RESPONDENT] and his agents continued to protest that there must be a lawful basis on which the property had been quarried, to provide evidence in support of that proposition and to press Council to, as they understood it, further search their records to check whether there was such a basis. [286] Council officers did not check the files in light of this new information. They did not check those records before issuing abatement notices (despite the statutory requirement for reasonable grounds for issue), before taking enforcement action, or before swearing an affidavit obtaining a search warrant of the property or an affidavit obtaining enforcement orders. Nor did they check archival records when specifically asked to. [287] As the High Court Judge and Court of Appeal found, the Council officers made a decision not to search the files for a consent or evidence of existing use. The High Court Judge found that this was because of their view that it was for [NAME] [RESPONDENT] to prove a lawful basis for quarrying.395 Whatever the reasoning, the important point is that a decision not to search was taken. It was taken on multiple occasions and in circumstances where the Council officers knew of evidence suggesting their position was wrong, to the detriment of [NAME] [RESPONDENT]. Conclusion [288] In light of this finding, was it unconscionable for the Council to invoke a limitation defence? It was. The reckless decision not to search was made although the Council was in a special relationship with [NAME] [RESPONDENT] in respect of the particular statutory duties. The ongoing failure to search had the effect of concealing the Council’s breach of duty because:

395 At [331].

(a) the files were the only possible source of information that could clarify the existence of a lawful basis for such quarrying, since the Council was the relevant regulatory body and had a statutory duty to keep records; and (b) the Council controlled access to the files and thereby controlled access to the evidence establishing the Council’s breach of duty. In this context, it would be unconscionable for Council to invoke the statutory time limit. [289] For these reasons, I would have dismissed the appeal.

Solicitors: [redacted] [NAME], Auckland for Respondent