IN THE MĀORI LAND COURT OF NEW ZEALAND TAITOKERAU DISTRICT A Sections 19, 231, and 238 Te Ture Whenua Māori Act 1993.

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1 150 Taitokerau MB 151 IN THE MĀORI LAND COURT OF NEW ZEALAND TAITOKERAU DISTRICT A UNDER IN THE MATTER OF BETWEEN Sections 19, 231, and 238 Te Ture Whenua Māori Act 1993 Matoa, Whara and Te Karaka Ahu Whenua Trust ROSE DUDLEY Applicant Hearing: 5 December 2016, 143 Taitokerau MB March 2017, 146 Taitokerau MB April 2017, 149 Taitokerau MB (Heard at Kaikohe and Whangarei) Judgment: 23 May 2017 REASONS FOR DECISION OF JUDGE M P ARMSTRONG

2 150 Taitokerau MB 152 Introduction [1] On 26 April 2017, I granted an order appointing Sam Rapana, Ani Toki, Donna Porowini, Nukumai Kingi, Piki Te Ora Mitchell, John Craven and Ripeka Menary as the trustees for the Matoa Whara Te Karaka Ahu Whenua Trust, with reasons to follow in writing. 1 [2] This decision sets out the reasons for granting that order. The history of the proceeding [3] The Matoa, Whara and Te Karaka Ahu Whenua Trust ( the trust ) administers the Matoa, Whara and Te Karaka blocks. 2 These blocks are Māori freehold land and are located near Kerikeri. [4] On 07 October 2016, Rose Dudley filed an application on behalf of the Ngatote Eruera Pirini & Ngawai Erika Akuhata Whānau Trust ( NEPNEA ) seeking: (a) A review of the trust; (b) To enforce the obligations of the trustees; and (c) An urgent injunction against the trustees. [5] By memorandum dated 30 September 2016, Ms Dudley advised that she was seeking the removal of all trustees. [6] The application was heard on 5 December By the time of the hearing, six of the seven trustees of the trust had resigned. 4 An election had also been conducted at the annual general meeting on 22 October 2016 for the appointment of new trustees. I raised with Ms Dudley that as the majority of the trustees had resigned, whether the removal of Taitokerau MB (149 TTK ). 87 Whangarei MB (87 WH ). 143 Taitokerau MB (143 TTK ). The trustees who resigned were Cyrus Lui, Piki Te Ora Mitchell, Merehora Taurua, Harawe Thompson, Rangimarie Harding and Pereka Taniora. The seventh trustee, Kahi Akuhata, had not resigned.

3 150 Taitokerau MB 153 the trustees had, in effect, been made redundant, and whether the Court should instead focus on the appointment of new trustees. [7] Ms Dudley agreed with this approach, but argued that the election conducted at the 2016 annual general meeting was flawed. In particular, Ms Dudley raised whether there had been sufficient notice, whether all of those who voted were owners, and whether the count of the votes was accurate. Ms Dudley submitted that a fresh election was required. There was general support for a fresh election amongst those in attendance at the hearing. [8] The question remained as to what should happen in the interim as the majority of the trustees had resigned. I determined that I would appoint those persons elected at the 2016 annual general meeting on an interim basis, namely: Rose Dudley, Donna Porowini, Olive Waipouri, Audrey Martin, Harawe Thompson, Ripeka Menary, John Craven and Rangimarie Harding. Kahi Akuhata also remained as the only existing trustee who had not resigned. This resulted in a total of nine trustees. The trust order provides for a maximum of seven trustees. 5 I allowed the appointment of nine trustees, as an interim measure, until seven permanent trustees were appointed. I directed the trustees to call a further meeting of beneficial owners in order to conduct a fresh election for the appointment of permanent trustees. [9] Unfortunately, two factions formed within the interim trustees. On 04 March 2017, the two factions held two separate special general meetings, at two different venues, and conducted two separate elections. The two elections produced two different results. [10] The application was then heard on 10 March After hearing from the parties, I determined that I could not rely on the results from either election for the purpose of appointing permanent trustees. In particular, I have to be satisfied that any persons appointed as trustees are broadly acceptable to the beneficiaries. I considered that if I was to appoint permanent trustees based on the results from one election, the views of the beneficial owners who voted at the other election would be discarded. This would be unfair on the beneficial owners who attended the second special general meeting believing that it was legitimate. As such, I directed that a further special general meeting was to be Taitokerau MB (81 TTK ) at clause of the Trust Order. 148 Taitokerau MB (148 TTK ).

4 150 Taitokerau MB 154 held. I also directed that a staff member of the Māori Land Court was to attend and facilitate the election to ensure that a robust process was followed. Finally, I granted an order removing Olive Waipouri and Rangimarie Harding as trustees as they had resigned. [11] A Deputy-Registrar, Brandon Ward, and case manager, Brynn Pitman-Peek, were nominated to facilitate the election pursuant to my directions. On 31 March 2017, Mr Ward and Mrs Pitman-Peek sought directions concerning the agenda, and voting, at the special general meeting. I issued an urgent minute providing directions on these issues. 7 [12] The special general meeting was held on 1 April 2017 at Oromahoe Marae ( the final SGM ). Mr Ward and Mrs Pitman-Peek attended the final SGM and facilitated the election. They filed a report dated 3 April 2017 on the process and outcome of the election. I directed the Registrar to distribute a copy of the report, and the supporting material, to the interim trustees, and to those persons nominated as trustees at the final SGM. [13] A final hearing was held on 26 April 2017 ( the final hearing ). 8 Ms Dudley was unable to attend the final hearing due to ill health and sought an adjournment. At the commencement of the final hearing, I raised Ms Dudley s request with those present and heard submissions both in support of, and in opposition to, the request for an adjournment. I declined the adjournment and proceeded with the hearing. [14] Audrey Martin subsequently advised that Ms Dudley had authorised her to speak on Ms Dudley s behalf. 9 Ms Martin made submissions in support of her and Ms Dudley s appointment. Bella Samuels was also present at the final hearing. Ms Samuels is a trustee on the NEPNEA Whānau Trust, along with Ms Dudley. Ms Dudley filed this application on behalf of NEPNEA. As such, the whānau trust still had representation at the final hearing Taitokerau MB (147 TTK ). 149 Taitokerau MB (149 TTK ). 149 Taitokerau MB (149 TTK ) at MB 228.

5 150 Taitokerau MB 155 [15] I also heard from other nominees and beneficial owners at the final hearing. Kahi Akuhata advised that he wished to withdraw as a trustee and that he no longer wanted to be considered for appointment. 10 [16] After hearing from the parties, I granted an order appointing Sam Rapana, Ani Toki, Donna Porowini, Nukumai Kingi, Piki Te Ora Mitchell, John Craven and Ripeka Menary, as trustees of the trust, with reasons to follow in writing. That order was conditional on all trustees undertaking trustee training within three months from the date of the order. The Law [17] Section 239 of Te Ture Whenua Māori Act 1993 ( the Act ) states: 239 Addition, reduction, and replacement of trustees (1) The Court may at any time, on application, in respect of any trust to which this Part applies, add to or reduce the number of trustees or replace 1 or more of the trustees. (2) The Court may amend the Court's records for a trust if a trustee dies and the Court receives a death certificate for the deceased trustee. (3) In exercising the powers in subsections (1) and (2), the Court may order the vesting of land or other assets of the trust in any person or persons (with the consent of that person or those persons) upon the terms of the trust, whether or not that person was previously a trustee. [18] Section 222 of the Act states: 222 Appointment of trustees (1) Subject to subsections (2) and (3) of this section, the Court may appoint as trustee of any trust constituted under this Part of this Act (a) (b) (c) (d) (e) An individual; or A Maori Trust Board constituted under the Maori Trust Boards Act 1955 or any other enactment, or any body corporate constituted by or under any enactment; or A Maori incorporation; or The Maori Trustee; or Public Trust; or Taitokerau MB (149 TTK ) at MB

6 150 Taitokerau MB 156 (f) A trustee company within the meaning of the Trustee Companies Act (2) The Court, in deciding whether to appoint any individual or body to be a trustee of a trust constituted under this Part of this Act, (a) (b) Shall have regard to the ability, experience, and knowledge of the individual or body; and Shall not appoint an individual or body unless it is satisfied that the appointment of that individual or body would be broadly acceptable to the beneficiaries. (3) The Court shall not appoint any individual or body to be a trustee of any trust constituted under this Part of this Act unless it is satisfied that the proposed appointee consents to the appointment. (4) Subject to subsection (5) of this section, the Court may appoint any such individual or body as a responsible trustee, or an advisory trustee, or a custodian trustee. (5) For every trust constituted under this Part of this Act the Court shall appoint 1 or more responsible trustees, and may appoint 1 or more advisory trustees and 1 or more custodian trustees. [19] The application of s 222(2) of the Act was considered by the Court of Appeal in Clarke v Karaitiana: 11 [51] The touchstone is s 222(2) itself. In appointing a trustee, the Court is obliged to have regard to the ability, experience and knowledge of the individual concerned. In considering those issues, the Court will no doubt have regard to such matters as the nature and scale of the assets of the trust concerned and the issues the trust is facing. The importance of the views of the beneficial owners of the trust is underlined by s 222(2)(b) which forbids the Court from appointing a trustee unless the Court is satisfied that the appointment of that person will be broadly acceptable to the beneficiaries. [52] It may be putting the matter too highly to say that the Court should only depart from the views of the owners in rare circumstances. The Court is not bound to appoint the leading candidates resulting from an election by the beneficial owners. A candidate who has strong support from the owners might be regarded by the Court as unsuitable through lack of ability, experience and knowledge or for other reasons. For example, the existence of conflicts of interest might be relevant or the need to obtain a suitable spread of skills amongst the trustees. Nevertheless, the Court would ordinarily give substantial weight to the views of the owners as demonstrated by the outcome of the election. If the Court is minded not to appoint the leading candidates as elected by the owners, it must still be satisfied the requirements of s 222(b) are met. For that purpose, the Court would need to have appropriate evidence before it. The outcome of an election at a meeting of owners is a useful means of obtaining such evidence. 11 Clarke v Karaitiana [2011] NZCA 154.

7 150 Taitokerau MB 157 [20] I adopt the principles set out in that decision. Are the trustees broadly acceptable to the beneficiaries? [21] Mr Ward and Mrs Pitman-Peek filed a detailed report on the process, and the outcome, of the election held on 1 April That report notes that 14 people were nominated as trustees. Votes were cast which ranked the nominees in the following order: (a) Sam Rapana 19 votes; (b) Ani Toki 17 votes; (c) Donna Porowini 16 votes; (d) Nukumai Kingi 15 votes; (e) Piki Te Ora Mitchell 14 votes; (f) John Craven 13 votes; (g) Ripeka Menary 12 votes; (h) Audrey Martin 12 votes; (i) Kahi Akuhata 11 votes; (j) Rose Dudley 11 votes; (k) Peter Paerau 9 votes; (l) Merehora Taurua 8 votes; (m) Lorraine Martin 8 votes; and (n) Eva Frost 8 votes.

8 150 Taitokerau MB 158 [22] The election was for all seven trustee positions. 12 The highest polling candidates were Sam Rapana, Ani Toki, Donna Porowini, Nukumai Kingi, Piki Te Ora Mitchell, John Craven, Ripeka Menary and Audrey Martin. Ripeka Menary and Audrey Martin received an equal number of votes and were tied in seventh place. [23] Two objections were raised at the final SGM concerning the voting process. 13 Merehora Taurua sought to vote as a beneficiary of the Arihia Pokai Whenua Tuku Iho Whānau Trust, which is a beneficial owner in the Matoa block. Mr Ward and Mrs Pitman- Peek did not allow Ms Taurua to vote as she is not a current trustee of the whānau trust, nor did she hold a proxy from the trustees. The approach adopted by Mr Ward and Mrs Pitman-Peek was correct. It is the trustees of a whānau trust who are entitled to exercise voting rights not beneficiaries. Ms Taurua is not a trustee of the whānau trust and she did not hold a proxy to vote on their behalf. [24] Albie Apiata also sought to cast a vote on behalf of his mother, Temepara Apiata, who is a beneficial owner in the Matoa block. Mr Ward and Mrs Pitman-Peek did not allow Mr Apiata to cast a vote as he was not an owner in his own right and did not hold a proxy for his mother. Once again, this was the correct approach. Mr Apiata is not an owner and does not have a right to vote on behalf of his mother unless he held a valid proxy. 14 [25] At the final hearing, Audrey Martin raised an objection to the process adopted for nominating trustees at the final SGM. She advised that when nominations were being taken from the floor, some persons nominated themselves. Ms Martin argued that this should not have been allowed and that trustees should have been nominated by another beneficial owner. [26] Mr Ward advised that nominations were taken from the floor. Mr Ward confirmed that some people did nominate themselves, however, those nominations were accepted Taitokerau MB (81 TTK ) at clause of the Trust Order. See the report to the Court by Mr Ward and Mrs Pitman-Peek dated 3 April McLelland Ngati Hine H2B (2011) 21 Taitokerau MB (21 TTK 57-72) ay [33]-[34] citing Thomson v Newton Pokuru 1A1B2 and 1A2D2 (1997) 19 Waikato Maniapoto Appellate Court MB 66 (19 APWM 66) and Whaanga Mahia Township Sections 90 and 91 (2000) 34 Gisborne Appellate Court MB 12 (34 APGS 12).

9 150 Taitokerau MB 159 given the support that those people had from the beneficial owners who were present at the meeting. [27] There is no requirement in the trust order that a person must be nominated by another beneficial owner, or that a beneficial owner cannot nominate him or herself. While such a practice may be adopted by other trusts, there is no requirement to do so in the present case. My direction did not expressly address this issue, it only required that nominations must come from an owner (or their proxy): 15 There is no limit on the number of persons who can be nominated as trustees, provided that they are nominated by an owner (or their proxy) during the period where nominations are received as set out above. [28] There is no evidence of any prejudice suffered as a result of the process adopted by Mr Ward and Mrs Pitman-Peek in accepting these nominations. While some people may have nominated themselves, it was the beneficial owners who determined whether or not to support that nominee through casting votes at the election. I do not consider that this issue invalidates the election process or otherwise affects whether I can rely on the outcome of the election. Ultimately it was the beneficial owners who expressed their view on who to support when voting for those persons nominated as trustees. [29] No other objections were raised at the final SGM, or at the final hearing, concerning the process adopted for the election. Despite that, I briefly address why I directed Mr Ward and Mrs Pitman-Peek to adopt the one person one vote regime. [30] Clause of the trust order for this trust states: Where a resolution is put to a general meeting requiring a vote by the beneficial owners: (a) (b) Voting shall be by show of hands PROVIDED THAT if not less than twenty five percent (25%) of the beneficial owners present in person call for a poll the vote shall be in accordance with shareholding; The trustees shall ensure that those persons voting are either beneficial owners [or their proxies] Taitokerau MB (147 TTK ) at [16].

10 150 Taitokerau MB 160 [31] As noted, in response to a request from Mr Ward and Mrs Pitman-Peek, I issued directions concerning voting at the election as follows: 16 [9] This trust is constituted over three separate blocks, Matoa, Whara and Te Karaka. Directions are sought on: if a person is an owner in more than one block, are they entitled to more than one vote. [10] As noted above, clause 4.5.8(a) of the trust order provides that, unless a poll vote is required, voting shall be by show of hands. A vote by show of hands entitles each person present who is entitled to vote (either as an owner or a proxy) to exercise only one vote. [11] As such, if a person is an owner in more than one block he or she is still only entitled to cast one vote. Similarly, if an owner is also holding a proxy, he or she can only cast one vote. That is, such an owner cannot vote once as an owner and again as a proxy. The same also applies to any person who is holding multiple proxies, he or she can only cast one vote regardless of the number of proxies held. [12] Finally, as seven trustees are going to be elected each owner (or their proxy), may vote for up to seven trustees. This is one vote for each trustee position. [32] In Wall v Maori Land Court, 17 the Māori Appellate Court considered what approach should be adopted where voting is by a show of hands. The Māori Appellate Court held: [59] We have also been referred to various authorities on these topics. For the purpose of this exercise we adopt the following principles from those authorities: a) At common law a vote on a show of hands means that each person present and entitled to vote has one vote and only one vote and those that wish to vote do so by show of hands: Ernest v Loma Gold Mines [1897] 1 Ch 1. Under this method the voting does not take into account variations and sizes of shareholdings or other entitlements, nor the presence of representatives of absent persons entitled to vote. A proxy cannot vote on a show of hands unless the rules or articles, or relevant statute expressly provides otherwise. However, even when rules permit a proxy to vote on a show of hands, a member who holds a proxy for another member may exercise only one vote on a show of hands. This is on the same principle that the person exercising a vote on a show of hands must be personally present and can exercise only one vote: Horsley s Meetings Procedure, Law & Practice (4th ed) Butterworths, paragraph 14.12; Taitokerau MB (147 TTK ) at [9]-[12]. Wall v Māori Land Court [2010] Māori Appellate Court MB 55 (2010 APPEAL 55).

11 150 Taitokerau MB 161 [64] The authorities cited above clearly establish that a vote by show of hands entitles each person present who is entitled to vote either as an owner or as holder of a power of attorney to exercise only one vote. [33] This decision was overturned by the Court of Appeal in Clarke v Karaitiana. 18 However, the Court of Appeal did not dispute that voting by a show of hands provides for the one person one vote regime. Rather, the Court of Appeal considered that the notice for the meeting of owners in that case created confusion and an expectation as to how voting would occur. The Court of Appeal considered that, in those circumstances, the one person one vote regime should not have been enforced. Despite this finding, the Court of Appeal still commented that the one person one vote regime is inherent in the show of hands approach: 19 [45] The Mäori Appellate Court referred to common law authority to support the proposition that a member who holds a proxy for another member may exercise only one vote on a show of hands. However, we accept Ms Aikman s submission that, given the confusing nature of the notice and the effect that had on the owners expectations about the voting arrangements, it was not appropriate to enforce the one person/one vote regime inherent in the show of hands approach. [Emphasis added] [34] The issue as to notice in Clarke v Karaitiana does not arise in the present case. The notice for the final SGM stated: MATOA WHARA TE KARAKA Ahuwhenua Trust SPECIAL GENERAL MEETING 9.00a.m Saturday, 1 st of April 2017 KAUPAPA: Oromahoe Marae 9.30 to 10.30a.m Registrations Karakia/Mihimihi ELECTION OF SEVEN [7] TRUSTEES]. [35] This notice was silent on how votes were to be cast. The trust order provides for voting by a show of hands unless a poll vote is called for. As such, I directed that voting Clarke v Karaitiana [2011] NZCA 154. Ibid at [45].

12 150 Taitokerau MB 162 should be conducted pursuant to the terms of the trust order, by a show of hands, adopting the one person one vote regime, which is inherent in that approach. [36] The report from Mr Ward and Mrs Pitman-Peek record that proxies held by Audrey Martin, Bonny Craven and Piki Te Ora Mitchell were not accepted for voting at the final SGM. This was due to those persons holding multiple proxies, or choosing to vote in their personal capacity as a beneficial owner, rather than as a proxy. Ms Martin, Ms Craven and Ms Mitchell all appeared, and addressed me, at the final hearing. None took issue with the one person one vote regime, or that those proxies were not allowed. [37] As noted, Sam Rapana, Ani Toki, Donna Porowini, Nukumai Kingi, Piki Te Ora Mitchell, John Craven, Ripeka Menary and Audrey Martin were the highest polling candidates as a result of the votes cast at the election. While some objections were raised as to the process adopted for the election, those objections have no merit, and do not affect whether I can rely on the outcome of the election to assess the views of the beneficial owners. I am satisfied that those persons who were the highest polling candidates at the final SGM are broadly acceptable to the beneficiaries. [38] I note that Ripeka Menary and Audrey Martin received an equal number of votes and were tied in seventh place. In these circumstances, I found that both were broadly acceptable to the beneficiaries. When considering the suitability of the nominees, I determined who to appoint between those persons, as addressed below. Are the trustees suitable having regard to their ability, experience and knowledge? [39] As noted, the Court is not bound to appoint the leading candidates resulting from an election by the beneficial owners. A candidate who has strong support from the owners might be regarded by the Court as unsuitable through lack of ability, experience and knowledge or for other reasons. Nevertheless, the Court would ordinarily give substantial weight to the views of the owners as demonstrated by the outcome of the election. 20 [40] Adopting this approach, I first considered whether the highest polling candidates were suitable for appointment having regard to their ability, experience and knowledge. If 20 Clarke v Karaitiana [2011] NZCA 154.

13 150 Taitokerau MB 163 I found that those highest polling candidates were not suitable, I then would have considered whether to appoint a lower polling candidate in their place. [41] To assist with this determination, I directed that all persons nominated, who were seeking appointment, were to file curriculum vitae ( CVs ) setting out their background, qualifications and experience. CVs were filed by Rose Dudley, Ripeka Menary, Kahi Akuhata, John Craven, Sam Rapana, Audrey Martin, Ani Toki, Donna Porowini and Piki Te Ora Mitchell. Some of those CVs were filed late. However, as the CVs were to assist me to determine the suitability of those persons, and as there was no prejudice to other parties, I accepted all CVs filed. The nominees present at the final hearing also addressed me on why they considered they should be appointed as trustees. [42] Nukumai Kingi did not file a CV nor did he attend the final hearing. His sister, Olive Waipouri, advised that Mr Kingi s child had been hospitalised in Australia with an aneurism. Given these circumstances, I invited Ms Waipouri to address me on Mr Kingi s background and experience. She also made submissions in support of her brother s appointment. [43] I also note that at the final SGM, the beneficial owners passed a resolution that the trustees appointed by the Court should be required to undertake trustee training provided by Māori Land Court staff. I agreed with this request and the order I granted was conditional on all trustees undertaking this training within three months. As such, when considering whether the trustees were suitable for appointment, I took into account not only their existing ability, experience and knowledge, but also whether those attributes would be further enhanced by completing the training with Court staff. [44] When assessing the suitability of the trustees, I took into account the issues currently facing the trust. This trust is constituted over three separate blocks. The Matoa block is hectares in size and has 498 beneficial owners. Housing is an important issue concerning the Matoa block. A number of occupation orders have been granted over parts of the block, licenses to occupy have been entered into, as well as tripartite deeds between the trust, beneficial owners and the Housing Corporation of New Zealand. Leases have also been granted to Housing New Zealand, who have established houses on the block, which have then been rented out by residential tenancy. Recently, issues have arisen

14 150 Taitokerau MB 164 over the potential sale of the Housing New Zealand houses to the tenants currently occupying them. It appears that large areas of the Matoa block are still undeveloped, or are at least, are not currently utilised. 21 [45] The Te Karaka block is hectares in size and has 125 beneficial owners. This block appears to be largely undeveloped. 22 [46] The Whara block is hectares in size and has 71 beneficial owners. This block also appears to be largely undeveloped, although part of it has been cleared, is in pasture, and has an access-way running through it. 23 [47] In summary, this trust administers three separate blocks, on behalf of a large number of beneficial owners. The Matoa block is the biggest by size, it has the greatest number of owners, and is the block that is most actively utilised. Housing, and the issues surrounding that, are clearly important in relation to the Matoa block. How to develop and/or utilise the balance of the Matoa block, as well as the Whara and Te Karaka blocks (if at all), will also be an important issue. [48] In order to properly administer these blocks, having experience as a trustee would be useful, but is not a pre-requisite. Experience or knowledge around housing is clearly desirable. Knowledge, skills and experience concerning developing land is also important. Strong leadership will be required and so experience in leadership roles is again helpful. It is also important that those persons appointed display a strong passion and desire to administer this trust, and utilise these lands, on behalf of the beneficial owners. General skills in administration, account management, and knowledge of the role and responsibilities of trustees, are also important for any trust. [49] Sam Rapana has a strong background in farming. His CV demonstrates that he has extensive qualifications and experience working on a number of different farms including in management roles. Mr Rapana has filed written references from his employers which show that they hold him in high regard See satellite images of the Matoa block at See satellite images of the Te Karaka block at See satellite images of the Whara block at

15 150 Taitokerau MB 165 [50] Ripeka Menary is an interim trustee on this trust. She has a diverse background including teaching Te Reo Māori at Waikato University and acting as a Māori Counsellor at Auckland Unitec. According to John Craven, Ms Menary also has experience in housing. [51] Audrey Martin is also an interim trustee. She has a strong background in management and administration roles. Ms Martin has a range of qualifications including a National Certificate in Business Communication and Administration, and a National Certificate in Sustainable Rural Development. [52] Donna Porowini is an interim trustee on this trust, and is also an existing trustee, and is the treasurer, for the Mangaiti 5A Māori Reservation. She has a range of work experience and qualifications including keeping accounts, and certificates in Te Reo Māori and Tikanga. [53] Piki Te Ora Mitchell was a permanent trustee on this trust until she resigned at the 2016 AGM. Ms Mitchell acted as the treasurer for the trust during that period. She has experience in management roles and has previously undertaken trustee training in 2012, 2015 and Ms Mitchell also advised that she has been undertaking research on papakāinga housing including liaising with Te Puni Kokiri officials. [54] John Craven is another interim trustee. He has qualifications in NCEA levels 1, 2 and 3. He has worked in sales and marketing, in the building industry, and has recently worked for Housing New Zealand. [55] Ani Toki has experience as an accounts manager and has worked in various team leader and management roles. [56] Nukumai Kingi is an existing trustee on the Te Rangaihi Ahu Whenua Trust. According to his sister, he has a range of skills and experience including working as a supervisor for Fonterra. [57] This material demonstrates that these candidates have a range of experience, skills and qualifications. Not all have acted as trustees before though that is not fatal. In fact, I

16 150 Taitokerau MB 166 consider that there is a good mix of experienced trustees, and an injection of new blood, which will provide a good balance amongst the trustees. I also consider that the skills, experience and qualifications of these candidates put them in good stead to act as trustees on this trust. Some of the skills and experience they hold will be extremely useful in their role as trustees on this trust. Other skills may not be directly transferable to the trust, but they still demonstrate the aptitude and ability of these candidates in a range of fields. I also consider that all trustees have demonstrated that they are passionate about acting as trustees, and administering this trust, in the best interests of the beneficiaries. [58] When combining their existing ability, experience and knowledge, with the additional training that they are to receive by Court staff, I was satisfied that all eight of the highest polling candidates could properly demonstrate that they were suitable for appointment as trustees. [59] That was not the end of the matter. In determining whether to appoint the highest polling candidates, I also had to consider the objections raised against those persons, and who should be appointed as the seventh trustee between Ripeka Menary and Audrey Martin. Objections raised against the highest polling candidates [60] At the final hearing, Bella Samuels objected to the appointment of John Craven as a trustee. Bella Samuels is a trustee on NEPNEA, along with Rose Dudley. Ms Samuels took issue with the fact that John Craven objected to Rose Dudley who was not present at the hearing. Ms Samuels argued that this conduct demonstrates that he is not fit to be a trustee. [61] Mr Craven was not the only person who objected to Ms Dudley s appointment as a trustee. It is clear that divisions have formed between the interim trustees and that strong views are held. The ability of the trustees to work together in a productive and objective manner is a relevant factor to consider when determining appointment. However, I do not consider that John Craven raising an objection to Rose Dudley demonstrates that he is unfit to be a trustee.

17 150 Taitokerau MB 167 [62] By dated 15 March 2017, Ms Dudley raised objections against Ripeka Menary, Donna Porowini and John Craven. 24 Ms Dudley states that, following the Court hearing on 10 March 2017, the interim trustees met to, amongst other things, nominate a secretary for the trust. At that hearing I had reduced the number of trustees to seven as Olive Waipouri and Rangimarie Harding had resigned. Ms Dudley states that an altercation occurred as four of the trustees, Ripeka Menary, Donna Porowini, Harawe Thompson, and John Craven, refused to accept her nomination as secretary. Ms Dudley contends that those four trustees voted in favour of Merehora Taurua being appointed as an independent secretary for the trust. Ms Dudley argues that this decision was in breach of the trust order. [63] Clause of the trust order states: Following their appointment by the Court the trustees shall at their first meeting of trustees appoint from amongst themselves a chairperson and a secretary. [64] This provision is clear that the trustees must appoint a secretary from amongst themselves. The trust order does not allow for an independent secretary. The secretary must also be a trustee. [65] The appointment of Ms Taurua as secretary was in breach of the trust order. However, Ms Dudley states that Ms Menary was told by a member of the Court staff that they could appoint an independent secretary. Clearly this advice was wrong. Trustees are obliged to acquaint themselves with the terms of trust and to strictly adhere to the terms of trust. Ripeka Menary, Donna Porowini and John Craven did not do so when appointing Ms Taurua as an independent secretary. However, there is a reasonable explanation in this case as it appears that they relied on incorrect advice from Court staff. Accordingly, I did not consider that this prevented those persons from being appointed as trustees on this trust. [66] Ms Dudley also states that this altercation over the appointment of a secretary took place in a public area, and as a result, she lodged a complaint with the Police. Ms Dudley 24 Ms Dudley also raised an objection against Harawe Thompson, who was not appointed, and so that objection has not been considered further.

18 150 Taitokerau MB 168 states that this is the second complaint she has made to the Police involving the same trustees. [67] Ms Dudley s submission does not set out any detail of what she says took place during this altercation, or what led her to make a complaint to the Police. There is no further evidence which addresses this incident. As such, I was unable to determine whether the conduct of the trustees on that occasion demonstrated that they were unsuitable for appointment. [68] Evidence was presented during the final hearing concerning the first incident which resulted in a complaint to the Police. Ripeka Menary advised that a trustee meeting was held at Audrey Martin s house. Ms Menary stated that accusations were made against one of the interim trustees which she objected to and that this resulted in a heated argument. Ms Menary advised that following the meeting a complaint was made to the Police. The Police then visited Ms Menary, Mr Craven and Ms Porowini. Ms Menary accepted that a heated argument occurred but considered that there was no need to involve the Police. Ms Menary states that she apologised to Ms Martin over the incident and that her apology was accepted. Ms Menary also stated that Ms Porowini and Mr Craven were not involved in the argument and it is unclear why complaints were made to the Police against them. [69] Ms Martin also presented evidence on this meeting which was held at her house. Ms Martin advised that she did not make the complaint to the Police. Ms Martin accepts that heated arguments occurred but she says that she was not afraid, nor did she feel threatened, during the meeting. [70] As noted, clear divisions were formed between the interim trustees during the course of this proceeding. This resulted in heated discussions taking place at the meeting at Audrey Martin s house. However, Ms Martin states that she was not afraid and did not feel threatened. While Ms Dudley made a complaint to the Police there is no evidence before me that criminal charges were laid, or that the Police took any further steps other than to talk to the persons involved. [71] Trustees must be able to act in a rational and objective manner. Trustees voicing their opinion and noting their disagreement on issues before the trust is to be expected.

19 150 Taitokerau MB 169 Such disagreement can also provoke healthy discussion and debate to ensure that robust decisions are made. However, trustees must ensure that they maintain a rational and objective approach to ensure that discussions are productive. It appears that on this occasion emotions boiled over. While that is unfortunate, I do not consider that this provides a sufficient basis to determine that Ms Menary is unsuitable to act as a trustee. [72] If there was clear evidence that a nominee was repeatedly acting irrationally and inappropriately, and was impacting on the ability of the trustees to discharge their duties, I may well refuse to appoint such a person. The evidence does not demonstrate that in the present case. While discussions were heated, Ms Martin downplayed the incident at the final hearing. Ms Menary also advised that she had apologised to Ms Martin and her apology was accepted. That should have resolved the issue. [73] It is not clear why objections were raised concerning Donna Porowini and John Craven in relation to this incident. It appears that they were simply bystanders and were not involved in the argument that occurred. [74] Ms Dudley further submitted that Donna Porowini, Ripeka Menary and John Craven consistently demonstrated their refusal to follow the trust order, to act with professionalism, and without prejudice against Ms Martin, Kahi Akuhata and herself. No further information or evidence has been provided to substantiate this allegation. [75] Finally, Ms Dudley states that Ripeka Menary and John Craven are currently living on the Matoa block and are refusing to pay rates. She alleges that this is a conflict of interest. [76] Issues surrounding housing and outstanding rates are important matters that will require consideration and determination by the trustees. There is insufficient information before me to determine who is responsible for the current rates arrears. [77] I accept that a conflict of interest may arise when the trustees are attempting to address these issues as Ripeka Menary and John Craven are currently occupying the Matoa block. However, clause and of the trust order state:

20 150 Taitokerau MB Notwithstanding any rule of law to the contrary and subject to clauses and no trustee shall be disqualified from being appointed or holding office as a trustee by reason only of a conflict of interest Where a trustee has a conflict of interest: (a) (b) (c) That trustee shall disclose the nature and extent of the conflict of interest to the other trustees; That trustee shall not take part in any of the discussions or decisions relating to the conflict of interest and must absent himself or herself from any such meeting of trustees and shall be disregarded for the purpose of forming the quorum of any such meeting; That other trustees may apply to the Court for directions where they consider that the conflict of interest may compromise the operation of the trust and the Court may make any such directions or orders that it thinks fit including the removal of the trustee. [78] These provisions are clear that a conflict of interest does not disqualify a person from being appointed as a trustee. Clause sets out a clear process for trustees to follow to avoid a conflict of interest. Provided that process is followed, no problems should arise. The existence of a potential conflict does not prevent Ms Menary and Mr Craven from being appointed as trustees. Even if Ms Menary and Mr Craven are excluded from decisions due to a conflict, there are still five other trustees who form a sufficient majority and are able to make decisions concerning the trust. [79] I also note that if the particular housing issue before the trust does not affect Ms Menary, or Mr Craven, so that a conflict does not arise, then their experience in living on the block, as well as in housing generally, may be very useful in assisting the other trustees to make determinations. [80] John Craven opposed Ms Martin s appointment. Mr Craven argued that Ms Martin had not been a team player and that she and others attempted to split the trust when two different factions formed. [81] That factions formed within the interim trustees is unfortunate. Trustees must work together. If they are unable to come to a consensus, decisions can be made by majority. I accept that the ability of the trustees to work together in a productive manner is a relevant consideration when appointing trustees. However, I also consider that an opposing view

21 150 Taitokerau MB 171 from a trustee can be helpful. Differing views can promote discussion and debate ensuring that decisions made have been properly tested and are robust. [82] The fact that Ms Martin took a different position on certain issues while she was an interim trustee did not prevent her from being appointed. As noted, a dissenting voice can be positive for a trust. I did not consider that this provided a sufficient basis to refuse Ms Martin s appointment. However, her conduct as an interim trustee is a relevant factor which influenced my decision to appoint Ms Menary instead of Ms Martin as addressed below. [83] I note that Piki Te Ora Mitchell was an existing trustee on this trust until she resigned at the 2016 annual general meeting. She was subsequently re-elected at the final SGM and has now been re-appointed as a trustee. Ms Dudley s original application sought the removal of those previous trustees, including Ms Mitchell, for allegedly failing to discharge their duties. In re-appointing Ms Mitchell, I did consider whether this was appropriate given that Ms Dudley s original application sought the removal of her, and the other trustees, who were in office at that time. [84] Ms Dudley has been vigorous in her prosecution of this application, and in her objection to certain trustees. Despite that, she did not object to Ms Mitchell s reappointment, nor did she argue that Ms Mitchell was unsuitable for appointment because of her conduct as a previous trustee. I have already found that Ms Mitchell is broadly acceptable to the beneficiaries, and is suitable for appointment. As no objections were raised concerning her past conduct as a trustee, I did not consider this further. Why I appointed Ripeka Menary instead of Audrey Martin [85] As noted, Ms Menary and Ms Martin received an equal number of votes and were tied for the seventh position of trustee. Deciding who to appoint between Ms Martin and Ms Menary was difficult. I considered that both were suitable for appointment having regard to their skills, experience and knowledge. I also considered that both could make valuable contributions to the administration of the trust. Nevertheless, the trust order only

22 150 Taitokerau MB 172 allows for the appointment of seven trustees. 25 Martin and Ms Menary, should be appointed as the seventh trustee. As such, I had to decide who, between Ms [86] While both Ms Martin and Ms Menary have a lot to offer as trustees, I considered that Ms Martin had the edge in terms of her skills and qualifications. Ms Martin has worked in a number of leadership roles which would provide valuable experience in administering this trust. Her CV also records that in 2014 she received a National Certificate in Business Communication and Administration. In 2016, she received a National Certificate in Sustainable Rural Development. These qualifications, and the skills that Ms Martin developed in obtaining them, would be particularly useful in the administration of this trust. Had I made my decision based solely on the skills, qualifications and experience as set out in their respective CVs, I would have appointed Ms Martin as the seventh trustee. [87] Ultimately, it was Ms Martin s conduct as an interim trustee that swayed me to appoint Ms Menary. [88] As noted, on 5 December 2016, I appointed the interim trustees and directed them to call a meeting of beneficial owners to hold a fresh election. A trustee wānanga hui was held on 14 January Six of the nine trustees were present at that meeting namely: Audrey Martin, Donna Porowini, John Craven, Kahi Akuhata, Olive Waipouri and Ripeka Menary. Those trustees passed a unanimous resolution that a special general meeting was to be held on Saturday 4 March 2017, at Oromahoe Marae, to conduct an election for all seven trustee positions. [89] A separate trustee hui was held on 11 February 2017 in Whangārei. Four of the nine trustees were present at that meeting namely: Audrey Martin, Kahi Akuhata, Harawe Thompson and Rose Dudley. Those trustees passed the following resolutions: (a) Appointing Audrey Martin as the chairperson and Rose Dudley as the secretary and treasurer; and Taitokerau MB (81 TTK ) at clause of the Trust Order.

23 150 Taitokerau MB 173 (b) Moving the venue for the special general meeting from Oromahoe Marae to the Turners Centre in Kerikeri. [90] The remaining trustees did not acknowledge the resolutions passed on 11 February 2017 as there was no quorum at that meeting. Those trustees proceeded to hold the special general meeting at Oromahoe Marae as resolved on 14 January The trustees at the 11 February 2017 hui relied on the resolutions passed there to hold a separate special general meeting at the Turners Centre in Kerikeri. This lead to two separate special general meetings being held on the same day at the same time at two different venues. Two different elections were held which produced two different results. This also resulted in two different factions being formed within those trustees. [91] At the hearing on 10 March 2017, Ms Dudley complained that insufficient notice had been provided for the hui held on 14 January This was disputed by other trustees at that hearing. The evidence as to notice for the 14 January hui is unclear. From the material presented from both sides, it appears that the trustees were told of the meeting on 14 January 2017 verbally, but not in writing. There are differing accounts as to who was meant to advise the trustees in writing of that hui. Some allege that Ms Martin was meant to provide written notice, though she disputes that. Ms Dudley further argued that proper notice was provided to all trustees for the hui held on 11 February [92] Clause of the trust order states: The quorum for a valid meeting of trustees shall be five (5) trustees present throughout the meeting. [93] Clause of the trust order states: The powers of the trustees may be exercised at a meeting of trustees by a majority of trustees and all such acts and proceedings arising shall be as valid and effectual as if all trustees had concurred PROVIDED THAT where a trustee dissents in writing from the majority decision of the trustees before the decision is implemented that trustee shall be absolved from any personal liability arising out of the decision in accordance with section 227(6) of the Act. [94] Clause of the trust order reflects s 227 of the Act which allows trustees to act by majority.

24 150 Taitokerau MB 174 [95] Although questions were raised around whether sufficient notice was provided for the hui on 14 January 2017, the trustees at that hui reached quorum, and had sufficient numbers to form a majority. They determined that the special general meeting should be held at Oromahoe Marae. [96] The trustees at the hui on 11 February 2017 did not have a sufficient quorum, and did not form a majority. They did not have authority to make decisions on behalf of the trust. Despite that, those trustees, including Ms Martin, proceeded to make decisions for the trust including appointing a chairperson, secretary and treasurer, and changing the venue for the special general meeting. [97] At the hearing on 10 March 2017, Ms Dudley advised that she was aware that a majority of trustees was required to make decisions on behalf of the trust. It is not clear whether Ms Martin was aware of this or not. Either she wasn t aware of this requirement, or she was, and she participated in decision making anyway. [98] Either way, this demonstrates that Ms Martin failed to adhere to a fundamental requirement that underpins the very ability of trustees to exercise their powers. It is not enough to say that the trustee meeting on 11 February 2017 was properly notified. If the trustees at that meeting did not form a majority, then they could not make decisions on behalf of the trust. [99] I consider that this was a significant error by Ms Martin, and those other interim trustees, who purported to pass resolutions at the meeting on 11 February This conduct demonstrates a failure on behalf of those persons to understand, or apply, a core requirement that trustees must act by at least a majority. [100] I am aware that Ms Dudley has argued that the other interim trustees have failed to follow the trust order. That is true in relation to appointing an independent secretary. However, that is a relatively minor issue, and there is a reasonable explanation for it. That may also be true in relation to calling the meeting on 14 January 2017, if trustees were only advised verbally, and not in writing, as required by the trust order. However, the evidence is unclear around whether notice was provided in writing, or whether trustees were only advised verbally. There is also a dispute as to who was meant to provide notice in writing