Section 240, Te Ture Whenua Maori Act Parihaka X Trust. NATHAN COUPER Applicant RESERVED JUDGMENT OF JUDGE L R HARVEY

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1 212 Aotea MB 38 IN THE MAORI LAND COURT OF NEW ZEALAND AOTEA DISTRICT UNDER IN THE MATTER OF A Section 240, Te Ture Whenua Maori Act 1993 Parihaka X Trust NATHAN COUPER Applicant PAUL RANGIPUNGA Respondent Hearing: 12 August 2008 (Heard at New Plymouth) Appearances: Mr Nathan Couper, in person Mr Paul Rangipunga, in person Judgment: 25 August 2008 RESERVED JUDGMENT OF JUDGE L R HARVEY Introduction [I) Nathan Couper seeks the removal of Paul Rangipunga and Margaret Taylor as trustees of Parihaka X Trust. He says Mr Rangipunga and Ms Taylor have been absent from trustee meetings without proper excuse and do not participate constructively in the busi ness of the trust. More importantly Mr Couper claims that Mr Rangipunga incurred unauthorised expenditure of approximately $5 I,000 with BTW Ltd, surveyors and mapping consultants of New Plymouth, and has consequently placed the trust at risk. For these reasons he says Mr Rangipunga must be removed as a trustee. [2) Mr Rangipunga denies the claims. He contends that the application for removal is in part a response to his continual questioning of the activities of the

2 212 Aotea MB 39 tlustees. While he admits that the cost of the mapping services surprised him too, he argues that the benefits to the tlust will outweigh the costs. He also denies that he is disluptive and says that he should remain as a tlustee. [3] During the hearing Mr Couper withdrew his application for removal against Ms Taylor. So the issue for determination is simply whether the applicant has satisfied section 240 of Te Ture Whenua Maori Act 1993 that the respondent should be removed as a tlustee. However, there is some background to the present application and so a brief review of recent events provides a context to the present proceedings. Background [4] According to the Court's records Patihaka X is Miioti freehold land some hectares in area, although it is understood this figure is incorrect and the area is in excess of 700 ha. It was created by an amalgamation order on 25 January 1962, 72 Taranaki MB 87. At present there are some 2,764 owners in the land. Patihaka X is administered by an ahu whenua trust. In a reserved judgment dated 17 June 2005 I appointed Peter Moeahu, Ted Tamati, Peter Wharehoka, Te Ru Wharehoka, Rita Rukuwai and Colleen Tuuta as responsible tlustees for a petiod of three years, 154 Aotea MB 45. A rotation of trustees and voting by show of hands regime was also instituted at that time. Ms Tuuta has since resigned while Messrs Wharehoka and Tamati are now deceased. [5] Then on 13 December 2007 I appointed Nathan Couper, Russell Hohaia, Peter Moeahu, Paul Rangipunga, Rita Rukuwai and Margaret Taylor as responsible trustees, 198 Aotea MB 166. Prior to that Mr Rangipunga had raised a number of matters with the Court concerning the previous tlustees' administration and management of tlust assets. He questioned many of the decisions and practices of the then tlustees both at hearings and duting meetings of owners. Mr Rangipunga has also been at the centre of proceedings involving the Patihaka Papakainga Trust and the then Patihaka X trustees.

3 212 Aotea MB 40 Hearing: 20 June 2008 [6] The trustees were directed to attend Court to answer questions per section 238 of the Act and provide an update on the trust's activities, 208 Aotea MB 213. At this hearing a number of issues were raised by the trustees including the awarding of contracts, proposals to engage a farm manager for the trust, notice of and attendance at trustee meetings, conflict of interest and ownership of buildings on trust land. Mr Couper also requested the removal of Mr Rangipunga and Ms Taylor because he claimed they had failed to attend four trustee meetings without proper excuse. Mr Rangipunga questioned the propriety of trustees making decisions when it appeared that a conflict of interest might be evident. [7] On that occasion I expressed concern at some of the practices of the trustees including the failure to adhere to the conflicts of interest clause of the trust order. A contract to deal with strategic planning had been awarded to a company associated with Mr Couper and his wife. While he was not present, his mother, Ms Rukuwai was. Given that Mr Rangipunga and Ms Taylor did not attend the hui, the absence of Mr Couper and Ms Rukuwai would have rendered the trustees' meeting inquorate. Consequently, I told the trustees, the hui could not have properly awarded the contract to Mr Couper's company. I directed the trustees to follow a tendering process for any subsequent strategic planning work if and when the trust required further assistance. [8] Mr Couper also advised that the trustees had resolved to create a full time faffil manager position. Mr Rangipunga and Ms Taylor were not completely supportive of the idea because they claimed that the other trustees, including Mr Couper and Ms Rukuwai, had pushed ahead with advertising the position when they understood the idea was to be further explored. Mr Rangipunga considered that even the idea of a farm manager should be discussed by the owners at their next hui. It then emerged that Mr Couper had decided to seek the position for himself and had made application accordingly. Unsurprisingly, Mr Rangipunga raised questions over process and conflict. He also noted that during a trustee hui to discuss the position a dispute arose between himself and Mr Couper over whether a redundancy clause should be included in the employment agreement for the position. I made it plain to the trustees and Mr Couper in particular that while there was no prohibition against trustees working for

4 212 Aotea MB 41 the trust, care needed to be taken to ensure even the appearance of conflict was not present or at least minimised by following proper process. I directed Mr Hohaia to deal with the advertising and short-listing for the position of farm manager with an independent professional farm consultant assisting him and to report back as soon as possible. [9] Mr Couper then claimed that Mr Rangipunga and Ms Taylor were not adding value to the trust, had missed trustees meetings and so should be removed by the Court. This was denied. The manner of calling hui and notifying trustee members was also cause for comment. Mr Rangipunga and Ms Taylor said that hui were being called without proper notice to them and that from time to time they could not attend because of competing commitments. It was not, they stated, because of any lack of interest in attending trustee meetings. I noted the comments of Ms Rukuwai the secretary, acknowledged what the affected trustees had to say and encouraged them to work co-operatively to dispose of any outstanding issues that might remain unresolved. Ownership of buildings [10] Mr Rangipunga had previously filed an application regarding the ownership of certain buildings on trust land. He stated that when the decision to file was made, the trustees were unanimous in supporting him. It was claimed that a group known as the Parihaka Peace Festival and the Parihaka Management Trust had from time to time been allowed use of certain buildings and other assets on trust land. Mr Rangipunga had raised questions as to the authority of the PPF and the PMT to use those assets and their ownership. Apparently the trustees of Parihaka X had not at that point resolved a particular position on the ownership question, hence the apparent desire to support the application. The parties were directed to attempt a resolution of the issues and failing that a hearing would be held on 12 August next to determine ownership. Mr Couper wrote to the Court on 3 August 2008 confirming that ownership issues had been resolved and accordingly Mr Rangipunga's application should be dismissed. [II] At the hearing on 12 August Mr Rangipunga objected to any dismissal of his application, pointing out that while ownership had been resolved, an order from the

5 212 Aotea MB 42 Court was still required to put the matter beyond doubt. I agreed and issued a section 18 (I)(a) order determining that the two buildings in question were the property of the trust. Additional directions were also issued concerning two other dwellings on the land. [12] A conference was then convened to deal with the present application for removal, filed on 3 August Mr Couper contended that there was sufficient evidence to proceed. I adjourned the conference briefly to give Mr Rangipunga the chance to consider his position and whether or not he wanted to seek legal advice before continuing. He agreed to proceed. At the conclusion of the conference I formally convened the Court, having been satisfied that Mr Rangipunga needed to respond to the allegations made by Mr Couper. For completeness I note that Mr Rangipunga was advised by the Registrar to seek legal advice prior to the hearing on 12 August last. Submissions for the Applicant [13] Mr Couper stated: (a) Mr Rangipunga met with Mr Dickie of BTW on 13 March 2008 to give instructions that the mapping project should proceed. This fact is confirmed in a letter prepared by Mr Dickie for the purpose of the current proceedings dated 7 August 2008; (b) at a meeting held on 15 March 2008 Mr Rangipunga advised the trustees that the cost for the draft mapping report would be $5,000 and that is recorded in the minutes of the meeting. Those minutes were subsequently confirmed as true and correct at the 6 April 2008 meeting of the trustees. On both occasions Mr Rangipunga was present; (c) Mr Rangipunga was replaced as chairperson of the trust by the applicant on 5 April 2008;

6 212 Aotea MB 43 (d) Mr Aitken of BTW was asked to make a presentation to the tmstees as to progress with the mapping project on 6 July It was at that meeting that the cost of the mapping exercise to date was revealed as $24,000 with approximately $27,000 required to complete the task; (e) Mr Rangipunga failed to disclose that his son was employed by BTW during the mapping project; (f) following the presentation by Mr Aitken the applicant made numerous enquiries with BTW to determine whether Mr Rangipunga had given the instructions. This was confirmed by the letter from Mr Dickie; (g) at a meeting of trustees held on 3 August 2008 Peter Moeahu questioned Mr Rangipunga's failure to advise that his son had been employed by BTW. The minutes record in summary the discussion and the emphasis on the indicative price being $5,000. (14] In short, Mr Rangipunga had no authority from the trustees to incur expenses beyond $5,000. His claim that the trustees were advised that the figure of $5,000 was for an 80 hectare farm-when he knew that Parihaka X was in excess of 600 hectares - is denied. None of the trustees apart from Ms Taylor SUppOIt the respondent's recollection. The minute secretary who recorded the ' meeting in April last also denies that Mr Rangipunga made any qualification to the $5,000 figure he mentioned at the llui. He has therefore put the trust in jeopardy by effectively pledging credit in the trust's name in the amount of $51,000 without authority. This is a gross breach of his duties as a trustee and as a consequence the only remedy is his removal. Submissions for the Respondent [15] Mr Rangipunga denied that he had failed to fulfil his duties as a trustee. He acknowledged that the cost was in excess of what he understood the total amount might be but he emphasised that the exercise would be of significant benefit to the trust. He referred for example to the apparent increase in area of the trust's corpus

7 212 Aotea MB 44 lands as a result of more accurate boundaries being settled through the mapping process. Mr Rangipunga also noted that once he had been replaced as chairperson he assumed it would have been Mr Couper's responsibility to deal with BTW and ensure the project was completed satisfactorily including dealing with any cost issues. Mr Rangipunga stated that on numerous occasions he implored the trustees to follow the matter up with BTW. Other evidence [16] Mr Phil Dickie from BTW gave evidence. He stressed that his company wished to finish the task that they had been contracted to complete, in good faith, and in reliance on Mr Rangipunga's representations. He offered to accept payment by instalments if that would assist the trust. [17] MsRukuwai, the daughter of Rita Rukuwai and sister to Mr Couper, acted as minute secretary at the trustees' meeting of 6 April She denied Mr Rangipunga's claim that he qualified the estimate of $5,000 for the BTW commission. Ms Rukuwai offered an audio recording to confirm that Mr Rangipunga had not mentioned anything other than a cost of $5,000 for the project. The clerk received the recorder into her custody but on reflection I declined to listen to the recording since there was no obvious means to confirm that it was authentic and had not been altered in any way, inadvertently or otherwise. [18] Rata Pue gave evidence and denied a suggestion from the respondent that he had given instruction to B TW. Mr Pue also raised concerns over the earthworks the respondent had commissioned including the digging of a large pond. Mr Pue considered that work to be dangerous to the trust's cattle. The Law [1 9] Section 240 of the Act states: "The COllrt may at ally time, ill respect of ally tmstee of a tnlsl to which this [Part) applies, make all orderfor the removal of the ii1lstee, ifit is satisfied- (a) That the tmstee has failed to cony Ollt the dillies of a tmstee satisfactorily; or ~"V'-r

8 212 Aotea MB 45 (b) Becallse of lack of competellce or prolollged absellce. the trllstee is or will be ii/capable of canyillg alit those dllties satisfactorily... (20) The leading cases of this and the Maori Appellate Court on the removal of trustees are Pori pori Farm A Trust - Ellis Faulkner (1996) 57 Tauranga MB 7 and in re: Matata 930 Rangitihi Marae - Pryor v Perenara (2003) 10 Waiariki Appellate MB 233 (10 AP 233). The principles set out in those decisions are adopted here. Discussion (21) As the background to this decision demonstrates, there has been a history of tension between some of the trustees concerning claims of lack of accountability by the previous trustees, conflict of interest and use of trust. assets. Mr Rangipunga was elected chairperson of the trust but less than 6 months into their tenure the other trustees resolved to replace him in that role with Mr Couper. Concerns have also been raised over the calling of trustee meetings and a perception that some trustees have been prevented from contributing to the trust's decision making. This history provides some context for the present proceedings. As foreshadowed however, the only matter for immediate determination is whether or not Mr Rangipunga should be removed as a trustee. (22) It is not in dispute that Mr Rangipunga. is an experienced trustee. He has appeared before the Court in respect of Parihaka Papakainga and this trust on several occasions before Her Honour Judge Fox and myself. He has always appeared to be familiar with trustees' duties and has made various submissions on trustee accountability more than once. It was therefore surprising to discover that Mr Rangipunga pledged the trust's credit in the amount of $51,000, unwittingly or otherwise. The problem for the trust is that it has not made any budget provision for this expense. These costs are thus unbudgeted expenditure. (23) Turning to the responsibility for incurring the debt, Mr Dickie states in his letter that it was Mr Rangipunga who gave him the instructions to proceed on \3 March 2008, two days before the trustees' meeting authorising the brief to proceed for $5,000. Mr Dickie made it plain that he did not give any quote to Mr Rangipunga but simply indicated that for a 200 acre farm the cost would be $5,000. He also said that

9 212 Aotea MB 46 he told Mr Rangipunga that the costs would be kept low. Unsurprisingly BTW now expects to be paid for the work it has completed to date. [24] The evidence confirms that Mr Rangipunga was present at the April trustees' meeting where the minutes of the previous hui held on 15 March 2008 were confirmed as con-ect. Those minutes state that the cost of the mapping project with BTW would be $5,000. There is no mention of any additional estimate or cost. There is no reference to $5,000 and an 80 ha farm as an example of what the costs might be. Mr Rangipunga made no objection at the time as to the accuracy of the minutes. [25] Turning to the key question of performing trustees' duties satisfactorily, it is evident that Mr Rangipunga made a serious mistake in not obtaining a quote or even a written estimate for this work. Mr Rangipunga was the chairman at the time and it was he who instructed BTW. It is hardly surprising that the company accepted his instructions. It was then his duty to ensure the terms of engagement were clear. It was not reasonable for him to have engaged BTW without setting those terms. The respondent failed in his responsibility to agree the terms with BTW before engaging their services and for that he must now be held accountable. [26] The authorities confirm that before the Court will take the step of removal it must be satisfied that there is evidence of real failure to perform the duties of a trustee, or there has been an abuse of the trustee's position or there is evidence of malfeasance. But that alone is insufficient to justify removal. The final step in any assessment is to consider whether or not a positive defence is available. I find that there is evidence of a failure to fulfil the duties of a trustee satisfactorily and that in this case there is no defence. In addition, I do not accept the claim that the application was filed in some kind of retaliatory manner for Mr Rangipunga's questioning of trustee decisions. Even if it had been such a basis is iltelevant since the real issue for determination is whether Mr Rangipunga should be removed. Similarly, having reviewed the evidence of Mr Dickie on the point, I consider the claim of conflict over Mr Rangipunga's son being engaged by BTW to be equally iltelevant to the application.

10 212 Aotea MB 47 [27] Taking into account the submissions of the parties and the evidence before the Court, I accept the applicant's submissions that the criteria set out in section 240 have been met in that the respondent has failed to fulfil his duties satisfactorily. I agree that the application for removal should be granted. There is an order pursuant to section 240 of Te Ture Whenua Maori Act 1993 removing Paul Rangipunga as a trustee of Parihaka X Trust. [28) For completeness I note that at the upcoming annual general hui of the beneficial owners to be held on or about 22 September 2008 two trustee positions fall vacant with the retirement of Ms Rukuwai and Mr Moeahu. They of course are able to offer themselves for re-election if they wish. With the removal of Mr Rangipunga there will now be three trustee positions available for nomination at the 2008 annual general meeting of Parihaka X Trust. There is nothing to stop the beneficial owners nominating Mr Rangipunga for one of the vacancies. That said, it is well settled that the Court is not bound to accept the outcome of the owners' hui on whom to appoint and will take into account the requirements of section 222 of the Act when making any appointments. Decision [29) Paul Rangipunga is removed as a trustee of Parihaka X Trust for failing to fulfil his duties as a trustee satisfactorily, per section 240 of the Act. [30) There will be no order as to costs. Pronounced in open Court at.:t. c S-~ in on the.:2 5"11+ day of ~ G1AS\ 2008 L RHarvey JUDGE