IN THE MĀORI LAND COURT OF NEW ZEALAND TAITOKERAU DISTRICT A Eru Moka and Te Owai Pou Whānau Trust. Applicant

Transcription

1 61 Taitokerau MB 247 IN THE MĀORI LAND COURT OF NEW ZEALAND TAITOKERAU DISTRICT A UNDER Section 231, Te Ture Whenua Māori Act 1993 IN THE MATTER OF BETWEEN Eru Moka and Te Owai Pou Whānau Trust TE RAUTAU POU Applicant A UNDER IN THE MATTER OF BETWEEN Sections 113 and 117, Te Ture Whenua Māori Act 1993 Horo Himi Te Waihika Pou or Jim Pou IWINGARO SYLVIA COURTNEY RIRIPETI MIRA NORRIS Applicants Hearing: 15 June October February May April 2013 (Heard at Kaikohe) Judgment: 2 July 2013 RESERVED JUDGMENT OF JUDGE D J AMBLER

2 61 Taitokerau MB 248 TABLE OF CONTENTS Introduction Overview Background The 1989 application to establish the trust 250 The meeting of 27 February The 2009 application to replace trustees 254 The 2010 application for review of trust 254 The 2012 application to succeed to Jim Pou 262 The law The Court s jurisdiction 264 Trusts 267 Te Rautau Pou s complaints The house site for Te Rautau Pou 269 The house site for Wiremu Pou s family 269 The 2008 AGMs 269 The $20,000 loan to Mira Norris 270 The nature of the trust Jim Pou s intentions 270 The terms of trust 272 Succession to Jim Pou s estate Outcome Orders Conclusion

3 61 Taitokerau MB 249 Introduction [1] This decision concerns two applications that relate to the Eru Moka and Te Owai Pou Whānau Trust ( the trust ). [2] In the first application, Te Rautau Pou applies for a review of the trust. His initial complaint was that the trustees had not allocated to him a house site that he says he was previously promised. His complaint has broadened somewhat and the application now raises more fundamental issues to do with the nature of the trust and who are its beneficiaries. [3] Despite its name, the trust is not a whānau trust but an ahu whenua trust, having been established under s 438 of the Māori Affairs Act 1953 ( the 1953 Act ). 1 In the course of this review I must decide whether it is appropriate to reconstitute the trust as a whānau trust under Te Ture Whenua Māori Act 1993 ( the 1993 Act ). [4] The second application is to succeed to the land interests of the late Horo Himi Te Waihika Pou (more commonly known as Jim Pou). Jim Pou established the trust and remains the sole beneficial owner of the trust s lands (as well as holding interests in other Māori land). He died in The review application and the succession application are closely related and it is appropriate to deal with them in the one decision. Overview [5] At the time the trust was constituted in 1989, Jim Pou was the sole owner of Tuhuna 47 and Taraire 1B3C ( the land ), which he had received from his father, Eru Pou. Jim Pou was the second eldest child of the late Eru and Te Owai Pou. They had 10 children: seven sons and three daughters. Only four sons (Alfred, Arama, Archie and Te Rautau (the applicant)) and a daughter (Hinewaka) are still alive. They are all now aged in their 80s or thereabouts. I refer throughout this judgment to the descendants of Eru and Te Owai Pou as the whānau. 1 See the discussion in Ruapuha and Uekaha Hapu Trust v Norman Tane Hauturu East 8 Block (2010) 2010 Maori Appellate Court MB 512 (2010 APPEAL 512) at [86]-[96] where the Court addressed the application of s 354 of the 1993 Act to s 438 of the 1953 Act, whereby trusts constituted under s 438 are ahu whenua trusts for the purpose of the 1993 Act.

4 61 Taitokerau MB 250 [6] In 1989 Jim Pou applied to the Court to establish a trust over the land. He intended the trust to benefit all of his parents descendants, as per the whānau trust regime proposed in the then Māori Affairs Bill ( the Bill ) that would eventually become the 1993 Act. However, at the time the Bill was making slow progress through Parliament and the trust therefore had to be established under s 438 of the 1953 Act. [7] Jim Pou remains the sole beneficial owner of the land even though he died 23 years ago. There is now considerable tension within the whānau over the functioning of the trust and who are its beneficiaries. [8] On the one hand, it is clear that Jim Pou intended the trust to benefit all of his parents descendants. Furthermore, that intention accords with the views of those members of the whānau who attended the four hearings before me. Seemingly consistent with that view, Jim Pou s five daughters had not applied to succeed to his land interests since his death in 1990 that is, not until after the final hearing of the review application in [9] On the other hand, some of Jim Pou s daughters claim a special status in relation to the trust by reason of being his daughters and, so I was lead to believe, the rightful successors to his land interests under his will. Two of his daughters, Iwingaro Courtney and Mira Norris, played a central role in the review application and subsequently filed the succession application. The terms of Jim Pou s will have a bearing on the outcome of the review application. [10] Because of the nature and history of the issues raised by the applications I set out the background in some detail. I next address the law and then turn to the issues under the following headings: Background Te Rautau Pou s complaints; The nature of the trust; Succession to Jim Pou s estate. The 1989 application to establish the trust [11] Eru Pou died in Under his will he left all of his land interests to Jim Pou. Those interests included interests in various blocks of Māori freehold land including

5 61 Taitokerau MB 251 Tuhuna 47. There was also Taraire 1B3C, which was General land at the time but was subsequently changed to Māori freehold land. Eru Pou was the sole owner of these two blocks of land. In 1976 the Māori Trustee acting as administrator of Eru Pou s estate transferred the various interests to Jim Pou. [12] Jim Pou spent a considerable amount of time and effort administering the lands between 1976 and During this time various members of the whānau contributed money to a whānau fund, some received loans from that fund and some used the land. It remained of central importance to the whānau as a whole. Clearly Jim Pou did not see himself as having exclusive ownership of the land but rather as custodian on behalf of the whānau an unsurprisingly Māori perspective. [13] From the mid to late 1980s Jim Pou investigated options for ownership and administration of the land by the whānau, and in particular the new forms of trust promoted by the Bill. His investigations culminated in 1989 with his application under s 438 of the 1953 Act to establish the trust in respect of Tuhuna 47 and Taraire 1B3C, being the land in his sole ownership. A s 438 trust could not be constituted in relation to part interests in land, which seems to explain why the other interests were not to be included in the trust. [14] The application form dated 1 February 1989 and signed by Jim Pou sought to have the lands vested in a trust to be known as Te Owai and Eru Pou Family Trust. The grounds for the application were expressed as follows: (a) (b) I am the sole owner of both blocks of land and it is my wish that they be administered for the benefit of the descendants of Te Owai and Eru Pou. Eventually I wish to have the properties form the basis of a whānau trust as some (sic) is defined in the current Māori Affairs Bill. (emphasis added) [15] The hearing took place on 12 April I set out the minute in full: Extract from Minute Book: 68 WH & 31 Appln No/s: 195 Date: Wednesday 12 April 1989 Place: Present: Whangarei A D Spencer, Judge M Wiki, Clerk

6 61 Taitokerau MB S.438/53 TUHUNA 47 & TARAIRE 1B3C HORO HIMI TE WAIHIKA POU o/o Also Present: Archie Frederick Pou, Ivan Wiremu Pou, Riripeti Mira Pou (Norris) folio 30 HORO HIMI POU I produce to the Court a copy of the minutes of a meeting held on 27 th February The resolution to form a trust was not actioned as we were awaiting the new legislation to enable us to establish a whānau trust for our lands. Taraire 1B3C is presently General Land I ask that it be changed to Māori Freehold land as we wish to combine it in with Tuhuna 47 for the purposes of our S.438/53 Trust. COURT Pursuant to S.27(2)/53, the application is amended to include all application to cancel the General Land Status of the land pursuant to S.68/74. MR POU The proposed trustees are:- Alfred Pou Cilla Robust Ivan Pou present Mira Norris present Archie Pou present We wish the name of the Trust to be the Eru Moka & Te Owai Pou Whānau Trust. All the trustees have consented to appointment and attended the meeting. We discussed a draft trust order. COURT A copy is not on file the application is adjourned to enable this to be confirmed. folio resumes COURT The Deputy Registrar has attended a meeting of the family and has discussed the draft trust order Mr Wilson please refer that draft to the file. I am satisfied as to all matters and make the following orders: That Taraire 1B3C, being all the land in C.T. 19D/279, is now to be Māori Freehold Land. The General Land Title is hereby cancelled. This order is to release immediately pursuant to S.34(10)/53. The Tuhuna 47 and Taraire 1B3C blocks hereby vest in the abovenamed persons as Trustees upon the Trusts in the draft trust order approved by the family. Orders accordingly. Copy to applicant. [16] The five trustees appointed were Alfred Pou (Jim s brother), Ivan Pou (Jim s nephew), Cilla Robust (Jim s niece), Mira Norris (Jim s daughter) and Archie Pou (Jim s

7 61 Taitokerau MB 253 brother). Trusteeship has not changed since 1989 and nor have the trustees ever sought a review of the trust (in breach of s 351 of the 1993 Act). [17] The trust order has also not been varied since It is based on the standard s 438 trust order adopted in the Taitokerau district at the time. It appears that it was not modified to address the specific circumstances of the trust. For example, it refers to the existence of advisory trustees even though they were never appointed. More significantly, the objects of the trust are to administer the land for the beneficial owners, and to retain the land for the beneficial owners and their successors, as per the standard trust order. But, as noted, Jim Pou was the sole beneficial owner. Thus, the trust order does not expressly provide for the descendants of Eru and Te Owai Pou to be the beneficiaries of the trust even though they are accepted by all to be the intended beneficiaries. The meeting of 27 February 1988 [18] At the hearing on 12 April 1989 there was reference to the minutes of a whānau meeting on 27 February A copy of those minutes is contained in the Court s 1989 application file. They are headed up Family Meeting and relate to a meeting where 27 of the whānau were in attendance. They are relatively formal minutes recording discussions of previous minutes and financial statements and show that the whānau had been working collectively in relation to the land and finances for some time. There were funds of over $20, The minutes note that the investment of the funds was to be left for the whānau trustees to discuss. The meeting discussed the appointment of trustees. Three separate motions were put in relation to the number of trustees and where they had to reside. The meeting narrowly resolved for there to be five trustees, all of whom must live from Whangārei north. [19] The meeting went on to discuss the proposed house sites on Tuhuna 47. This is relevant to Te Rautau Pou s initial complaint. Jim Pou proposed three sites for his brothers Te Rautau, Percy Senior and the late Wiremu Pou s family. He proposed that he have the old home. Three of the brothers, Alfred, Joe and Arama Pou, had already been given sections. An issue arose as to sections to be allocated to the three sisters and their families so that all 10 children would have sections it is not entirely clear how that was resolved. In any event, a motion was passed confirming the house sites as per a sketch plan. The site

8 61 Taitokerau MB 254 indentified in the sketch plan for Te Rautau Pou is the same site the trustees have consistently offered to him ever since (as shown as site G in their scheme plan of September 2008). The 2009 application to replace trustees [20] In 2009 Alfred Pou, a trustee, and Te Aroha Reihana-Ruka, his niece and the daughter of the late Wiremu Pou, applied to the Court under s 239 to replace all the trustees. They relied on an AGM held on 20 September An AGM was also held on 15 November The minutes of the latter AGM record a discussion of the earlier AGM and concerns about notice of that meeting and, therefore, its validity. [21] The s 239 application came before Judge Spencer on 19 May There was a clear division in the whānau. The validity of the two meetings was discussed. Judge Spencer also discussed Jim Pou s original intention to establish a whānau trust and suggested that the current trust should now be brought in line with the whānau trust provisions of the 1993 Act. Ultimately, Judge Spencer was not prepared to appoint trustees based on the 20 September 2008 AGM. He dismissed the application with leave to bring a fresh application within six months. No such application was filed. The 2010 application for review of trust [22] Te Rautau Pou s review application first came before Judge Spencer on 15 June Judge Spencer once again discussed with the parties Jim Pou s original intention to establish a whānau trust to benefit all of the whānau. I note that Judge Spencer assumed that any succession to Jim Pou would be in favour of his daughters and would therefore defeat the trust, and no one corrected that assumption. He considered that the trust should now be reconstituted as a whānau trust and adjourned the application for the whānau to meet with the Court staff to discuss the terms of a whānau trust order. [23] The application came before me for the first time on 7 October The trustees in attendance explained that they had met with the Court staff but did not wish to change to a whānau trust. Nevertheless, the trustees readily acknowledged that the trust s Kaikohe MB 96 (47 KH 96). 25 Taitokerau MB 125 (25 TTK 125). 31 Taitokerau MB 5 (31 TTK 5).

9 61 Taitokerau MB 255 beneficiaries were the descendants of Eru and Te Owai Pou and considered the trust to be somewhere between an ahu whenua trust and a whānau trust. 5 I commented that unless Jim Pou s daughters first succeeded to their father s interests and agreed to re-establish the trust as a whānau trust, the Court could not force them to do so. But I made that comment in ignorance of the background to the formation of the trust as outlined above at the time I had not seen the 1989 application file. I had also not seen a copy of Jim Pou s will. As Te Rautau Pou did not attend the hearing I adjourned the application to give him an opportunity to address his complaint. [24] A third hearing took place on 22 February Te Rautau Pou, who lives in Wellington, was still unable to attend. Instead, he sent a 12 page letter dated 3 February 2012 setting out various concerns with the trust. His original complaint had broadened and he now raised issues in relation to the 2008 AGMs, Judge Spencer s dismissal of the 2009 application and the trust s $20, loan to a family member. He intended that his brothers, Arama and Alfred Pou, as well as his niece, Te Aroha Reihana-Ruka, speak on his behalf at the hearing. However, of those three only Alfred Pou attended the hearing and he did not address the letter. [25] As the trustees had not received a copy of Te Rautau Pou s further complaints I gave them an opportunity to review the documentation with the option to adjourn the hearing before responding. The trustees were happy for the hearing to proceed. I explained that I did not need to hear from them in relation to the 2008 AGMs and the 2009 application as there had been no appeal against Judge Spencer s dismissal of the application. [26] We discussed the $20, loan. It transpired that the trustees had leant this money to a company owned by one of the trustees, Mira Norris, and her husband. Mira Norris said that the money was secured against a $4,000,000 property, though she did not produce any documentation to support that statement. She said she could quickly repay the money if required Taitokerau MB 8 (31 TTK 8). 37 Taitokerau MB 76 (37 TTK 76).

10 61 Taitokerau MB 256 [27] We also discussed the extent to which the trustees had been holding general meetings. I pointed out that the trust order required the trustees to have an AGM every year. That had not been occurring. The trustees could not tell me what AGMs had been held since It also transpired that Ivan Pou had resigned some years ago and that Alfred Pou also wished to resign. I indicated that the trustees would need to convene an AGM. [28] The trustees present then posed the question which is now fundamental to the present application: who are the beneficiaries of the trust? Are the beneficiaries Jim Pou and his successors as beneficial owners or are they the descendants of Eru and Te Owai Pou? [29] Finally, Iwingaro Courtney and Mira Norris indicated that they would now apply to succeed to their father s land interests. Throughout the hearings they gave the impression that they and their sisters were entitled to succeed under the will. I believe Judge Spencer also gained that impression. But as I will shortly explain, that is not so. [30] I concluded the hearing on the basis that I would deliver a reserved judgment which addressed Te Rautau Pou s complaints and the question of who are the beneficiaries of the trust. However, upon my return to Chambers and my review of the Court s trust file and the 1989 application file, I realised that a further hearing was required. This is explained in my minute of 24 February 2012 which I set out in full: 7 This application came before me on 22 February 2012 at Kaikohe. The applicant, Te Rautau Pou, was not present but had filed with the Court a 12 page letter together with some supporting documentation setting out new allegations against the trustees. I gave the trustees an opportunity to review this material and offered them the option to further adjourn the application. They decided to proceed with the hearing and address the allegations. During the course of the hearing it was disclosed that $20, had been lent by the trustees to a company associated with one of the trustees, Mira Norris. It was suggested that the loan was secured and that, in any event, it would be repaid. I now require to see any documentation relating to that loan and issue a direction below in regard to that. Furthermore, I note that there is clear caselaw that a trustee who is also a debtor of the trust is in an untenable position: see Marino- Repongaere 4G (Part)(2004) 34 APGS 98. In light of that decision, I put Mira Norris on notice that the Court may invoke its jurisdiction to remove her as trustee Taitokerau MB 168 (36 TTK 168).

11 61 Taitokerau MB 257 Earlier today I reviewed the Court s trust file together with the Court s application file that relates to the late Jim Pou s application to establish the trust in As the parties will appreciate, one of the issues raised in this review is whether the trust is for the benefit of the descendants of Eru and Te Owai Pou, as per a whānau trust, or whether the trust is for the benefit of the beneficial owner only, which at the moment is the late Jim Pou. The application file contains four items of evidence that are directly relevant to the issues before me. First, the application form signed by Jim Pou. Second, the Deputy Registrar s file note of 11 April Third, the minutes of the family meeting held on 27 February 1988 including the sketch plan of house sites. Fourth, the minutes of the Court sitting of 12 April 1989 when the trust was established. I consider that all parties need to have an opportunity to review these documents and to attend a further hearing where they can address them. The documents are on their face consistent with the beneficiaries of the trust being the descendants of Eru and Te Owai Pou. The documents also indicate that the late Jim Pou intended the trust to eventually become a whānau trust under Te Ture Whenua Māori Act Therefore, the Court may consider using its various powers to clarify that aspect of the trust, whether by determination or orders. Furthermore, the 1988 sketch plan appears to allocate Te Rautau Pou a house site consistent with the trustees 2008 sketch plan. A further hearing is therefore required. Accordingly, I direct as follows: (i) The application is set down for a further hearing at Kaikohe in May 2012 (2 hours). (ii) I direct the trustees of the trust to file with the Court by 30 April 2012 any documentation relating to the loan of $20, to the company associated with Mira Norris, that is, any trustee minutes, loan documentation or other security documentation. (iii) I direct the Case Manager to send to each of the parties copies of the four documents in the 1989 application file referred to above by 30 March I give notice that the Court may rely on s 37(3) and invoke its other powers under the Act, including ss 18, 214, 219, 238, 239, 240, 241 and 244 to remove Mira Norris and/or determine the nature of the trust. This may include orders re-constituting the trust as a whānau trust. The application is now adjourned to the further hearing in Kaikohe in May [31] The final review hearing took place on 23 May This was by far the best attended hearing of the three review hearings I conducted. Te Rautau Pou was finally in attendance Taitokerau MB 248 (54 TTK 248).

12 61 Taitokerau MB 258 [32] We began by addressing the house site for Te Rautau Pou. He explained that he considered that the site the trustees were offering him was not the same site his brother Jim had offered him. He said the site should be further to the north of the totara tree (I have marked the area he identified with an x on exhibit A produced on 7 October 2011). However, the trustees maintained that the area they had offered him accorded with the 1988 sketch plan and that it made sense for his site to be on the southern boundary. [33] We then discussed the $20, loan. Mira Norris produced correspondence and minutes from late 2007 which related to the loan. Cilla Robust also produced some records. The material shows that at a meeting of the trust on 25 November 2007 Mira Norris signalled her wish to borrow funds at 10% interest. But Mira Norris and Cilla Robust were the only trustees present, which was not a quorum. In any event, they did not make a decision. Mira Norris then formalised her request in a letter of 5 December 2007 to the trustees. The trustees did not meet to discuss the request but Cilla Robust telephoned Alfred and Archie Pou regarding the loan. According to Cilla Robust, they both agreed. The decision to grant the loan was never documented. [34] On 20 December 2007 the trust paid an amount of $20, to Mira Norris (or most likely to her and her husband s company, Rewa Rewi Ltd). On 16 May 2008 Mira Norris and her husband signed a document headed up personal guarantee (which does not appear to have been drafted by a lawyer) in respect of the loan. As at the date of the hearing on 23 May 2012, Mira Norris had paid only one amount of interest of $2, and no principal. She confirmed that interest was compounding and estimated that she owed approximately $30, in total. [35] We then discussed Te Rautau Pou s concern that the family of the late Wiremu Pou had not been allocated a house site. Wiremu Pou s daughter, Te Aroha Reihana-Ruka, confirmed that although at one stage a house site had been sought, the family were now happy with a site for a garden and piggery only. This is what her mother, Irihapeti Pou, had told me at the previous hearing. [36] Finally, we discussed the central issue of the nature of the trust and who are its beneficiaries. I explained that the documents on the Court record demonstrated that the

13 61 Taitokerau MB 259 beneficiaries of the trust were intended to be Eru and Te Owai Pou s descendants, and that Jim Pou intended that the trust eventually become a whānau trust. [37] Te Aroha Reihana-Ruka agreed with what the Court record showed. She also produced correspondence which supported this view from Mr Coutts of the Office of the Māori Trustee in the lead up to the 1989 application. These comprised, in summary: A letter dated 29 October 1984 from Mr Coutts on behalf of Jim Pou to Cilla Robust. This was a standard letter sent to all of the whānau outlining Jim Pou s proposal for the land. In summary, he wished to involve all of the whānau in the ownership and administration of the land by transferring an equal share to his nine siblings, by forming a s 438 trust (or some other form of suitable trust such as one of those contemplated in the new Māori Affairs Bill) and by each family group contributing $2, to meet the initial costs of administration; A letter dated 20 October 1986 from Mr Coutts to Irihapeti Pou where he advised: I have had further discussions with Mr Jim Pou and it is now quite apparent that it will be a little while yet before the new Māori Affairs Bill becomes official legislation. This could be two years away, and in the meantime, Mr Pou has decided that he would like to proceed with the formation of a trust under the existing legislation with a view to altering the format of the trust once the new legislation becomes effective. I should note the point here that the proposed new Māori Affairs Act contains provision for the formation of a variety of trusts which are more closely linked to the proposals that Mr Pou has in mind. However, an an (sic) interim provision would be possible to form a trust pursuant to section 438 of the Māori Affairs Act 1953, and after discussing this with Mr Pou he wishes to proceed accordingly. Mr Pou has asked me to write again to all members of the family and advise them of the interim proposals. He will retain ownership of the block meantime but will transfer ownership when the new legislation becomes operative. (emphasis added); A letter dated 22 October 1987 from Mr Coutts to Irihapeti Pou concerning a further proposed whānau meeting scheduled for 21 November 1987.

14 61 Taitokerau MB 260 Attached to the letter was an agenda for that meeting which included reference to a meeting that had been held on 4 July 1987: At the meeting held on 4 July 1987 the various types of trusts provided for in the new Māori Affairs Bill were discussed. It was generally agreed by those present that a whānau trust would be more appropriate in the first instance although this could be extended to a whānau tōpu trust (sic) at some stage in the future. (emphasis added); A letter dated 24 November 1987 from Mr Coutts to Irihapeti Pou following the meeting on 21 November It comments at the outset: I refer to the discussion that we had at the family meeting held at 21 November 1987 concerning the proposal to eventually establish a whānau trust in respect of Tuhuna 47. (emphasis added) [38] Mere Pou, a daughter of the late Percy Pou Senior, produced a report she had prepared for the whānau in She also understood that her Uncle Jim intended establishing a whānau trust when the legislation allowed for it. [39] Iwingaro Courtney spoke of her father s intentions in creating the trust. She submitted a chronological outline of events from 1956 to Unfortunately, the outline is a summary only and she produced only three selected documents from the various minutes and correspondence referred to. Not all have a bearing on the issues before me: First, the minutes of a meeting of Jim Pou s immediate family dated 23 April 1988 which discuss various matters to do with the family s affairs including some form of trust. Iwingaro Courtney did not explain how this relates to the trust that Jim Pou eventually established for the whānau; Second, the second page of an unsigned document in Jim Pou s name prepared in 1989 that has a handwritten section. The handwritten section, addressed to Deputy Registrar Rex Wilson of the Māori Land Court at Whangarei, reads as follows: Dear Rex. The Māori Land Court will confirm Trustees for the family trust in April this year. Please urge Joe and Rama to pay up their contribution otherwise they will miss out.

15 61 Taitokerau MB 261 Regards Jim [40] It is unfortunate that Iwingaro Courtney did not produce the whole of this document to put the handwritten comment in context. Nevertheless, the typewritten part of the document at the top of the page is instructive and reads as follows: I would also like to record that the trustees under the interim section 438/MA1953 Trust and under the whānau trust should be empowered to grant housing sites on Tuhuna 47 to my brothers Rau and Percy and to my own family as well as to the family of my late brother Wiremu. The intention here is that one house site be granted or set aside for each family. (emphasis added); Third, a letter dated 27 February 1989 from Deputy Registrar Rex Wilson to Jim Pou which sets out the options to enable three family members to be able to build on the land. These options were for him to transfer shares under s 213 of the 1953 Act or to establish a trust under s 438 of the 1953 Act and then grant licences to occupy. [41] Iwingaro Courtney claimed that although at the hearing on 12 April 1989 her father said he wanted to form a whānau trust, he was not really aufait with what that entailed. She said that in late 1988 he had suffered the tragic loss of one of his daughters and in 1989 his health had been poor. She said that her father had doubts about the whānau trust option though she agreed that he wanted the trust to benefit his parents descendants. She also said that one of her father s main concerns was the effect of handing out individual shares. [42] When I pressed Iwingaro Courtney and Mira Norris on what particular aspects of the whānau trust regime did not fit with their father s plans, they could not point to any single matter apart from the lack of functioning of the trust. But as the situation of the current ahu whenua trust demonstrates, any dysfunction is to do with personalities and not any inherent defect in the whānau trust concept. Iwingaro Courtney acknowledged that her real concern was that she and her sisters would no longer be able to retrieve the land if a whānau trust was formed once again, a comment that assumed that Jim Pou left the land to his daughters. Mira Norris added that her father was adamant that at least one of the trustees should be one of his daughters.

16 61 Taitokerau MB 262 [43] Finally, at the conclusion of the hearing Arama Pou asked the Court to remove the current trustees and appoint himself and his brothers, Alfred and Te Rautau, and his sister, Hinewaka, as replacement trustees. The 2012 application to succeed to Jim Pou [44] On 8 June 2012 Iwingaro Courtney and Mira Norris filed the succession application. The application sought orders in favour of four of Jim Pou s five surviving daughters. Filed in support of the application was the High Court s 1990 grant of letters of administration with will annexed in favour of Mira Norris and two of her sisters, Ruka Latimer and Atareta Horn, the Māori Trustee having renounced probate of the will. [45] The will is dated 15 May 1989 that is, a month after the hearing that established the trust and was prepared by the district solicitor of the Office of the Māori Trustee in Whangarei. Clauses 5(2) and (3) of the will are relevant: (2) I GIVE devise and bequeath all my right title share or interest in Māori freehold land blocks namely: Tuhuna 1A Tuhuna 12B Tuhuna 21 Rangihamama K3D3B Tuhuna 47 Maungapohatu North Okuratope 2 Taraire 1B3C to the ERU MOKA AND TEOWAI POU FAMILY TRUST and I EXPRESS THE INTENTION that none of the lands are to be sold. (3) I GIVE the residue of my estate (after payment by my trustee out of my estate of any debts including funeral and testamentary expenses and any other death duty) to such of my children IWINGARO SYLVIA COURTNEY, ATARETA MARGARET HORN, MIRA RIRIPETI NORRIS, ROKA RAEWYN LATIMER and NGAHUIA ASHLEIGH POU as are living at my death and if more than one in equal shares. [46] As noted, the succession application was not filed until the review application hearings had concluded though the possibility was signalled during the hearings. Of particular note, at no time during the earlier hearings had Iwingaro Courtney or Mira Norris disclosed that the will in fact provided for the land interests to go to the trust. They

17 61 Taitokerau MB 263 had given the impression that they and their sisters would succeed to the land. I understand that since 1990 they had given the same impression to the rest of the whānau. [47] The succession application came before me on 24 April I asked Iwingaro Courtney and Mira Norris why they had lead me to believe that they and their sisters were entitled to the land interests when they knew that under the will the interests were to go to the trust. They had no plausible explanation. Mira Norris accepted that her father intended the interests to go to the trust. On the other hand, Iwingaro Courtney maintained that her father was confused and was still coping with the recent death of his daughter, and she did not feel the will reflected his intentions. Nevertheless, in the more than two decades since administration of the estate was granted no one has sought to challenge the will. [48] I also asked Iwingaro Courtney and Mira Norris why they had delayed 22 years in applying to vest the lands in the trust. Again, they had no plausible explanation. [49] The other members of the whānau present confirmed that the will reflected their understanding that Jim Pou wanted the land to vest in the trust. We discussed two ancillary matters. [50] First, clause 5(2) of the will does not mention the Rawhiti 6 block, the only other block of Māori freehold land in which Jim Pou holds interests. Iwingaro Courtney explained that she understood that this was because her father intended those interests to go to his daughters. However, Te Rautau Pou disputed this and said that his father had received these interests from Hone Waipuna by way of gift and that he had always intended returning those interests to Hone Waipuna s whānau. That never happened and the interests were subsequently inherited by Jim Pou. [51] Second, the application proposed that four of Jim Pou s daughters receive the land interests. There was no mention of the fifth daughter, Ngahuia Ashley Pou. Iwingaro Courtney explained that her sister Ngahuia suffers a disability and that a kaitiaki trust would be required to administer any interests she receives.

18 61 Taitokerau MB 264 The law The Court s jurisdiction [52] Te Rautau Pou s application began as an application under s 231 of the 1993 Act but because of the underlying issues I expanded it to include the Court s wider jurisdiction under ss 18, 214, 219, 238, 239, 240, 241 and 244 to remove Mira Norris and/or determine the nature of the trust, including reconstituting the trust as a whānau trust. [53] The Court s ability to invoke its other powers under the 1993 Act is expressly provided in s 37(3): (3) In the course of the proceedings on any application, the Court may, subject to the rules of Court, without further application, and upon such terms as to notice to parties and otherwise as the Court thinks fit, proceed to exercise any other part of its jurisdiction the exercise of which in those proceedings the Court considers necessary or desirable. [54] Given the broad nature of a review, it is unsurprising that the Court may be required to invoke its other powers. Section 231 provides: 231 Review of trusts (1) The trustees or a beneficiary of a trust (other than a kai tiaki trust) constituted under this Part may apply to the Court to review the terms, operation, or other aspect of the trust. (2) There can be no more than 1 review of a trust within a period of 24 consecutive months. (3) The Court may, on any review, (a) (b) (c) confirm the trust order for the trust without variation; or exercise its powers under section 244; or terminate the trust if the Court is satisfied that there is a sufficient degree of support for termination among the beneficiaries. [55] In the Proprietors of Mangakino Township v The Māori Land Court 9 the Court of Appeal discussed in some detail the Court s extensive powers on a review of a trust: [19] We entirely agree with McGechan J that a review of the trust cannot sensibly be conducted unless the Court pays some regard to its performance how 9 Proprietors of Mangakino Township v The Māori Land Court CA65/99, 16 June 1999.

19 61 Taitokerau MB 265 well or how badly have its affairs been running? That necessarily requires the Court to look at the competence of the trustee(s). What Parliament has called for in ss 231 and 351 is a general review of the trust's governance and management of its assets on behalf of the beneficial owners. Are those assets being administered in the best interests of the beneficiaries? Is the trust fulfilling its purpose as an ahu whenua (care of the land) trust, as that purpose appears from the statute (s 215, read in the light of the preamble to the Act and s 2) and from the objects stated in the trust order?... [21] In carrying out a general review of this kind the Court ought to concentrate on the broader picture and not become drawn into matters of detail, but it is in our view impossible to see any bright line between matters of governance and policy, on the one hand, and questions of operational management, on the other. As McGechan J appreciated and as is reflected as well in comments of Judge Savage during one of the hearings, it comes down to a question of common-sense how far into the affairs of a trust the Maori Land Court should burrow. Certainly its primary focus ought to be on the policies that the trust is pursuing and on how in a general way those policies are being implemented, but in order to see whether a policy is working at ground level in the best interest of the beneficiaries the Court can hardly avoid some consideration of particular operational matters. [22] There is indeed a danger that by concentrating too much on detail the Court could distract itself from the real issues facing a trust, which may require its direction, but we see no way in which the extent of the Court's investigations can be prescribed and limited as a matter of law. Even if any such prescription could be found, it would be of no continuing relevance as soon as the Court invoked its powers under s 238: 238. Enforcement of Obligations of Trust- (1) The Court may at any time require any trustee of a trust to file in the Court a written report, and to appear before the Court for questioning on the report, or on any matter relating to the administration of the trust or the performance of his or her duties as a trustee. (2) The Court may at any time, in respect of any trustee of a trust to which this section applies, enforce the obligations of his or her trust (whether by way of injunction or otherwise). [23] There is no reason why the Court could not proceed under this section or use other powers available to it under the Act at the same time as it was proceeding with a review. Section 37(3) provides: (3) In the course of the proceedings on any application, the Court may, subject to the rules of Court, without further application, and upon such terms as to notice to parties and otherwise as the Court thinks fit, proceed to exercise any other part of its jurisdiction the exercise of which in those proceedings the Court considers necessary or desirable. [24] There is an armoury of powers given to the Court in relation to trusts under Part XII so that it can carry out its guardianship role and there is good reason to read ss 231 and 351, which apply to the particular situation of a general review, in a manner consistent with those powers.

20 61 Taitokerau MB 266 [56] As noted, this Court s armoury of powers includes s 238. In Paki v Māori Land Court 10 the High Court discussed the scope of s 238 and confirmed that the Court has the duty to look to the enforcement of the obligations of the trust even in the absence of an application: [69] I agree with Mr Carter that to some extent there is an inevitable tension in the statute between the protective function of the Court on one hand, and the need on the other hand to respect Maori self management. For instance, section 351 of the Act is a review provision. And, section 238 in my view puts the Court in the position where it has a statutory duty to look to the enforcement of the obligations of a trust, even absent an application by any other person, where circumstances come to the knowledge of the Court which require it to act on its own motion. The very existence of that power, however, creates distinct procedural difficulties. It is to that aspect of the case which I will shortly turn. [57] In Clarke v Karaitiana 11 supervisory powers, particularly under s 238: the Court of Appeal reiterated that this Court has wide [36] In the light of this statutory background, there is no doubt that, in relation to his decisions of 29 June 2007 and 30 July 2008, Judge Harvey was exercising the jurisdiction available to him under ss 237 and 238 of the Act. Indeed, the formal decisions issued by the Court cite those provisions in the intituling. Apart from the inherent jurisdiction enjoyed by the High Court and conferred on the Maori Land Court by s 237, the Maori Land Court has wide supervisory and enforcement powers under s 238. These include the power to require any trustee to provide a written report to the Court and to appear before the Court in any matter relating to the administration of the trust or the performance of his or her duties as a trustee. In addition, the Court may, at any time, in respect of any trustee, enforce the obligations of the trust whether by injunction or otherwise. As well, the Court has the power, at any time, to add, reduce, replace or remove trustees under ss 239 and 240. [58] As for the other powers I invoked on 24 February 2012, they may be briefly summarised. Under s 18 the Court has the power to determine issues to do with land and interests in land, including under s 18(1)(a) in relation to any interests in equity. The determination of the nature of the trust falls under s 18(1)(a). Under ss 214 and 219 the Court can constitute a whānau trust. Sections 239 and 240 relate to the removal of trustees. Section 241 contains the power to terminate a trust and s 244 contains the power to vary a trust Paki v Māori Land Court [1999] 3 NZLR 700. Clarke v Karaitiana [2011] NZAR 370.

21 61 Taitokerau MB 267 [59] Accordingly, the Court has the broadest possible powers to address the underlying issues that are affecting the trust. That goes as far as reconstituting the trust as a whānau trust if that is what is needed to enforce the actual trust in place. Trusts [60] A trust is said to be, at its essence, an equitable obligation under which a trustee having control of property is bound to deal with property either for the benefit of defined beneficiaries or for some object or purpose permitted by law. 12 [61] Importantly, a trust may be express or implied, and so also may be its terms. An express trust will ordinarily be formed by express written words, though it may also be inferred from the words or actions of the settlor. Implied trusts comprise resulting trusts and constructive trusts. A resulting trust is said to arise because it is presumed that a trust is what the settlor would have wanted. Constructive trusts arise by operation of law. 13 [62] An ahu whenua trust is an express trust. Ordinarily the terms of an ahu whenua trust will be found in the express terms of the trust order. However, the terms of trust or, perhaps more correctly in the present circumstances, the duties of the trustees may also be found outside of the trust order. They may, for example, arise by operation of law or because of the particular circumstances. [63] Two cases illustrate that the terms of trust may exist outside of the Court s orders. Both concern vesting orders but I believe the principle also applies to trust orders. In Peihopa v Peihopa 14 the High Court held that a vesting order whereby parents vested land in their son gave rise to a trust even though there was no reference to a trust in the Court s order. Similarly, in the Māori Appellate Court s decision in Tau v Ngā Whānau o Morven & Glenavy Waihou 903 Section IX Block, 15 the Court upheld the decision of the Chief Judge that an 1887 vesting order gave rise to a trust even though the order was silent as to the existence of a trust For the extended definition see Garrow and Kelly, Law of Trusts and Trustees (6th ed, Lexis Nexis, Wellington,2005) para Butler, Equity and Trusts in New Zealand (2nd ed, Thomson Reuters, Wellington, 2009) para Peihopa v Peihopa HC Whangarei A37/82, 19 June Tau v Ngā Whānau o Morven & Glenavy Waihou 903 Section IX Block (2010) Māori Appellate Court MB 167 (2010 APPEAL 167).

22 61 Taitokerau MB 268 [64] Regardless of the different methods by which a trust may be formed, a trust will only exist if it satisfies the three certainties. First, certainty of intention. That is, the trust s creator must have intended to establish a trust. No particular form of words are required. Second, certainty of subject-matter. That is, certainty as to what the property is and the extent of the beneficial interest of each beneficiary. Third, certainty of objects. In other words, certainty as to the beneficiaries of the trust. 16 [65] A number of principles apply to the interpretation of documents constituting trusts. First, they are to be construed in accordance with the plain, ordinary meaning of the words used. Secondly, where there is ambiguity or uncertainty, resort may be had to the factual matrix surrounding the documents. Thirdly, the interpretation of a trust deed will be affected by the context and purpose of the particular trust. Fourthly, where terms of art are used in a trust deed that has been drafted by a lawyer, the Court will be inclined to interpret the term accordingly. Fifthly, the document will be interpreted as a whole rather than using one clause to undermine another. Sixthly, the interpretation can be affected by whether the trust is executory or executed. Finally, the interpretation of individual clauses can be affected by the nature or subject-matter of that clause. 17 [66] Finally, the courts of equity have the power of rectification of documents. This ordinarily applies to contracts but can also apply to trust deeds. 18 As the authors of Equity and Trusts in New Zealand put it: 19 The object of a claim for rectification is to bring a document, which was intended to record or give effect to a prior agreement, into harmony with that prior agreement. It is not the agreement that is rectified but the incorrect manner in which the common intention of the parties has been expressed in the document sought to be rectified. [67] It is not clear whether the general equitable remedy of rectification could be invoked to correct a trust order of this Court. But there is of course this Court s power under s 86 of the 1993 Act to correct errors and the Chief Judge s jurisdiction under s 45 of the 1993 Act. More relevantly, I see no reason in principle why this Court could not Butler, Equity and Trust in New Zealand at para 4.2. Ibid para 3.3. Re Stokes Family No 2 Trust HC Hamilton M288/94, 30 September Butler, Equity and Trusts in New Zealand at para

23 61 Taitokerau MB 269 effectively rectify a trust order that contains a clear error in the course of a trust review under s 231 of the 1993 Act. Te Rautau Pou s complaints The house site for Te Rautau Pou [68] Te Rautau Pou s original complaint was over the allocation of his house site on Tuhuna 47. The trustees say that the site accords with Jim Pou s original directions and that Te Rautau Pou now simply wants a different site, which they do not agree with. [69] I have had the benefit of reviewing the minutes of the whānau meeting of 27 February 1988 and the sketch plan of house sites. When the 1988 sketch plan is compared to the trustees September 2008 scheme plan (prepared by a surveyor), it is clear that the site promised to Te Rautau Pou in 1988 is the same as site G which the trustees continue to make available to him. [70] As I observed at the hearing on 7 October 2011, the trustees have the responsibility for deciding how the land should be occupied. They have allocated a site that accords with what was proposed in In my view, Te Rautau Pou has no cause for complaint. He may not like the site but that does not justify the Court s intervention. I dismiss that aspect of the application. The house site for Wiremu Pou s family [71] As I have already explained, Wiremu Pou s widow and daughter confirmed that they do not seek a house site and are happy with an area for gardens and a piggery, which they have had for some years. I therefore dismiss that aspect of the application. The 2008 AGMs [72] Te Rautau Pou continues to complain about the 2008 AGMs and the hearing before Judge Spencer in May It would be entirely inappropriate for me to enquire into these complaints which amount to a challenge to Judge Spencer s dismissal of the 2009 application. Nevertheless, I will return to the question of updating trusteeship and the need for an AGM as part of the trust review.

24 61 Taitokerau MB 270 The $20,000 loan to Mira Norris [73] In 2007 the trust leant $20, to Mira Norris, a trustee, and her husband. Mira Norris justified the loan on the basis that the trust was receiving 10 per cent interest which was much better than what the banks could offer and that the loan was secured. [74] There are three problems with the loan. First, it is prima facie in breach of trust as Mira Norris is a trustee and, therefore, now a debtor of the trust. 20 Second, the loan was not discussed at a trustees meeting where a quorum was present, and nor was it documented. Third, the loan is not secured against a property as was suggested by Mira Norris but is supported by personal guarantees only. [75] The trust may in theory be receiving a higher interest rate than is possible from a bank but that was also the experience of the many individuals who invested in finance companies that collapsed in the last five years. The short point is that trustees must take a prudent and necessarily conservative approach to investing. An unsecured loan to a trustee does not meet the test of prudence. Furthermore, and of more fundamental concern, the loan was granted in breach of the fundamental fiduciary duty that a trustee must not benefit from trust property. And, given that annual interest has only been paid once since 2007, the loan is in substantial default and the trustees have done nothing about that default. [76] I conclude that the loan is in breach of trust and that Mira Norris position as trustee is untenable while the debt is owed. The nature of the trust [77] I address the nature of the trust by addressing Jim Pou s intentions and then considering the terms of trust. Jim Pou s intentions [78] I find the evidence of Jim Pou s intentions for the land and the trust to be clear and uncontradicted. I conclude that he saw himself as holding the land interests on behalf of the whānau; that he wanted to vest the lands in a whānau trust as per the Bill; that he 20 See the discussion in Marinov Horsfall Repongaere 4G (Part) (2004) 34 Gisborne Appellate Court MB 98 (34 APGS 98).