IN THE MĀORI LAND COURT OF NEW ZEALAND WAIKATO MANIAPOTO DISTRICT A A A Applicant

Transcription

1 113 Waikato Maniapoto MB 245 IN THE MĀORI LAND COURT OF NEW ZEALAND WAIKATO MANIAPOTO DISTRICT A A A UNDER IN THE MATTER OF BETWEEN AND Sections 238, 231 and 239, Te Ture Whenua Māori Act 1993 Aramiro Trust BARBARA KEREOPA Applicant HENRY GRAY, KEVIN HEITIA, SUNNAH THOMPSON AND TAIPOROHENUI DAY AS TRUSTEES OF THE ARAMIRO TRUST Respondent Hearing: 39 Waikato Maniapoto MB dated 12 April Waikato Maniapoto MB dated 10 August Waikato Maniapoto MB dated 10 April Waikato Maniapoto MB dated 4 June Waikato Maniapto MB dated 16 September Waikato Maniapoto MB dated 20 April 2015 (Heard at Hamilton) Judgment: 7 January 2016 RESERVED JUDGMENT OF JUDGE S F REEVES Copies to: Ms Barbara Kereopa, 42 Orongo Road, Waitetuna Valley, RD1, Raglan 3295 Mr Kevin Heitia, C/ Trustees of Aramiro Trust, 26 Carter Drive, Rotorua 3015, kheitia@orcon.net.nz

2 113 Waikato Maniapoto MB 246 Introduction [1] This decision concerns applications for a review and enforcement of the obligations of the Aramiro Trust ( the Trust ) pursuant to ss 231 and 238 of Te Ture Whenua Māori Act 1993 ( the Act ). The applicants claim there have been ongoing issues with the management and condition of the Trust s farm, and that the trustees are failing to address concerns of the owners in any meaningful way. They further claim that there is a lack of financial transparency and accountability and seek either the removal or replacement of trustees in that regard. [2] At the outset I am aware that since these matters first came before the Court, a number of people have passed away who were intimately involved with the Trust. In particular I wish to acknowledge Mr Thompson, Mr Bowker, and chair of the Trust, Mr Taiporohenui Day. Background [3] Aramiro and Section 1 Survey Office Plan block is Māori freehold land 1, hectares in area, created by amalgamation order dated 24 November The block is operated as a sheep and beef farm and is located on Waitetuna Valley Road in Raglan. An ahu whenua trust was established over the block on 22 July [4] The original trustees were John Gillett, Wycliffe Rangiawha, Thomas Tauranga, Norman Hoete, Daphne Moors, Arnold Rapana, Henry Gray, Howard Morgan and Cletus Paul. The current trustees are Kevin Heitia, Taiporohenui Day, Heemi Pukeikura and Raiha Walker. 2 Procedural history [5] An application for the enforcement of obligations of the Trust was filed by Barbara Kereopa on 19 January 2012, on behalf of herself and her husband, Poata Kereopa, an owner in the block. The application was initially heard before Judge Clark on 12 April Waikato MB 204 (60 W 204). 70 Waikato Maniapoto MB 13 (70 WMN 13).

3 113 Waikato Maniapoto MB At the conclusion of that hearing, Judge Clark adjourned the application and directed the trustees to bring an application for a review of the Trust, arrange for recent accounts to be audited and provide the Court with a copy of the Trust s farm consultant report regarding the condition of the farm. 4 [6] An application for a review of the Trust was subsequently filed by the trustees, 5 and a further hearing held on 10 August 2012 before Judge Clark in relation to both the enforcement of obligations and review of trust applications. 6 Both applications were adjourned and directions made in relation to the impending annual general meeting ( AGM ), including proposed variations to the trust order and for the election of a further trustee to be considered. In addition, the trustees were directed to respond in writing to concerns raised by an owner, complete further audited accounts and provide an updated report on the condition of the farm. [7] The applications returned to Court for a further hearing on 10 April 2013, accompanied by a new application to add and replace trustees arising from the AGM held in December At the request of the parties, the applications were again adjourned and further directions were made by Judge Clark for compliance with earlier directions and for additional documents to be filed, which were to be addressed at the next Court hearing. 8 [8] A subsequent hearing was held on 4 June 2013, where the Court considered further issues regarding the Trust s finances, the appointment of new trustees, and the condition of the farm. 9 Orders were made to replace and add trustees, and for the Registrar to appoint an independent farm consultant to undertake a review of the documents filed with the Court, to liaise with the parties, carry out a site inspection and provide a written report to the Court regarding the condition of the farm and its management. In addition, the trustees were directed to file a report addressing various financial matters arising from the Trust s Waikato Maniapoto MB 75 (39 WMN 75). 39 Waikato Maniapoto MB 92 (39 WMN 92). Application A Waikato Maniapoto MB 280 (45 WNN 280). Application A Waikato Maniapoto MB 56 (56 WMN 56). 58 Waikato Maniapoto MB 66 (58 WMN 66).

4 113 Waikato Maniapoto MB 248 accounts. At the conclusion of the hearing, Judge Clark recused himself from further proceedings and adjourned the review and enforcement of obligations applications. [9] John Hall of Agfirst (Waikato) Limited was engaged as the independent farm consultant and provided his report to the Court regarding the management and condition of the farm in August [10] The matters then subsequently came before me for hearing on 16 September Mr Hall presented a summary of his report and an opportunity was given to all parties to question him regarding his findings and recommendations. At the conclusion of the hearing I considered that strategic planning for the Trust was needed and appointed Mr Hall to further assist the trustees in preparing a strategic and farm plan for the Trust. 12 The applications were adjourned for a further six months to allow the strategic plan to be prepared. [11] The strategic plan was completed and filed with the Court in April 2014, and a final hearing was subsequently held on 20 April In the intervening period a further application to add trustees had also been filed by the trustees, following elections held at the Trust s 2013 AGM. 14 Applicant s submissions [12] The original application made by Mr and Mrs Kereopa sought the enforcement of obligations of the Aramiro Trust. The application noted the failure of the trustees to convene a special general meeting in response to concerns expressed by the owners. Attached to the application was a letter sent to the trustees setting out those concerns, which was signed by a number of the owners. [13] The main issues raised in the application can be summarised as follows: Waikato Maniapoto MB 242 (25 WMN 242). 67 Waikato Maniapoto MB 66 (67 WMN 66). 84 Waikato Maniapoto MB 48 (84 WMN 48). 98 Waikato Maniapoto MB 76 (98 WMN 76). Application A

5 113 Waikato Maniapoto MB 249 (a) The employment of the farm manager, Ernie Day, including safety issues concerning staff and other people living on the land with regard to the relationship between them and Mr Day; (b) The day to day operation and condition of the farm; (c) The financial accounts of the Trust; (d) The overall management of the Trust and communication between trustees and owners; and (e) The election of additional or replacement trustees. [14] The applicants questioned the basis on which Mr Ernie Day was appointed as the farm manager and whether he had the necessary qualifications and skills to carry out the role adequately. Recent incidents on the farm had raised issues of safety, and the applicants submitted that the day to day operation and condition of the farm was poor, suggesting that the farm advisor s reports did not accurately reflect the true state of the farm. The applicants argued that the trustees were failing to address such issues and failing to ensure that the farm was properly managed. As a result tensions had arisen on the farm and the applicants sought a way to address issues in order to progress the Trust. [15] In addition, the applicants submitted that the trustees ongoing communication with the owners was deficient, and aspects of the Trust s finances were not adequately discussed or explained to owners. They considered that genuine attempts to obtain information from the trustees had been impeded and they expressed frustration at the repeated failure of the trustees to respond to the owners concerns in a timely way. In that regard they sought the election of additional or replacement trustees. Other owners concerns [16] Several other owners in the block supported the submissions of the applicants and raised similar issues as to the current condition of the farm and the financial matters. The general tenor of the owners submissions pointed to a lack of transparency around the

6 113 Waikato Maniapoto MB 250 management of the Trust and a need to ensure proper communication with owners and prudent management of the Trust. Trustees submissions [17] In response to the application, the trustees submitted that they had so far not convened a special general meeting as they had difficulty understanding the reason for the meeting, and did not consider the owners requests met the criteria contained in the trust order. They submitted that initially they met with Mrs Kereopa to clarify what her concerns were but matters were not resolved before an application was filed with the Court. The trustees noted that at the AGM held in 2012 they had expected particular concerns would be raised by owners in that forum for discussion, but that had not occurred. [18] The trustees submitted that the farm is generally running well, inspections are carried out regularly by a farm advisor whose reports show that the overall condition of the farm is good. In addition, the stock was inspected regularly and was in excellent condition, with top prices at sales. The trustees further submitted that the financial position of the Trust is now strong. Previously the Trust was severely in debt when in 2007 the Bank of New Zealand ( BNZ ) called in their term loan and overdraft. However, due to conservative spending and the generation of new income, the trustees have gradually improved the financial position of the Trust. They say this improvement will now allow money to be spent on maintenance of fences, weed control and improvement of soil fertility. The trustees noted however that it is unlikely that any dividend will be payable to owners in the near future. [19] In relation to communication with owners, the trustees submitted that regular AGMs are held and considerable effort is made to notify all owners of those meetings. They noted that the financial accounts of the Trust are traversed in detail at the AGM by the Trust s accountant, Mr Bowker, and the accounts are also available for owners to view and query any time at the office of the accountant. The trustees acknowledged that suggestions had been made by some owners of nepotism within the Trust, given the chairman s son was employed by the Trust as the farm manager, as well as one of his other relatives. The trustees noted however that the chairman distances himself from any issues that arise with the farm manager.

7 113 Waikato Maniapoto MB 251 [20] Finally, in relation to the trustees themselves, it was submitted that trustees expenses and overheads are minimal and administration fees are well below what is normal for this type of trust. Currently there are four trustees, who attend the AGMs along with the accountant and the farm advisor. The trustees suggested that a possible way forward in terms of the issues was for an additional trustee to be appointed who was acceptable to the concerned owners. The Law [21] Sections 231 and 238 of the Act provides as follows: 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. 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). [22] In Proprietors of Mangakino Township v Māori Land Court, the Court of Appeal noted that this Court has extensive powers in relation to trusts. 15 In a review of trust, the Court generally concentrates on higher level policy issues rather than day to day 15 Proprietors of Mangakino Township v Māori Land Court CA65/99, 16 June 1999.

8 113 Waikato Maniapoto MB 252 operational matters, although in some circumstances there may be a need to consider the operational management: 16 [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 s238: [23] The Court of Appeal went further to record that the Court has an armoury of powers under Part 12 of the Act to enable it to carry out its guardianship role, along with powers to call for the preparation of independent reports on the affairs of a trust, and all the powers and authorities of the High Court in respect of trusts generally. 17 However, a review of operational matters should only be carried out as a last resort, where the Court considers there is a reasonable apprehension of risk to the assets of the trust, or where some serious allegation has been made that requires the intervention of the Court, particularly through the application of s 238 for the enforcement of the obligations of the Act. 18 [24] In Clarke v Karaitiana the Court of Appeal referred to the Court s powers in terms of s 238 of the Act: 19 [36] Apart from the inherent jurisdiction enjoyed by the High Court and conferred on the Māori Land Court by s 237, the Māori 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 At [21]. At [24] [27]. Eriha v Trustees of Kairakau Lands Trust (2014) 32 Takitimu MB 84 (32 TKT 84) at [13]. Clarke v Karaitiana [2011] NZCA 154.

9 113 Waikato Maniapoto MB 253 As well, the Court has the power, at any time, to add, reduce, replace or remove trustees under ss 239 and 240. [25] The Court of Appeal in Rameka v Hall set out the relevant duties of trustees: 20 [28] The general responsibilities of responsible trustees are set out in s 223 of the Act. That section refers to the following: (a) (b) (c) (d) Carrying out the terms of the trust: The proper administration and management of the business of the trust: The preservation of the assets of the trust: The collection and distribution of the income of the trust. [29] As we have noted, these statutory duties are not exhaustive and general trustee law principles are also relevant. Further, the trust order applicable to the trust may add other responsibilities. The relevant obligations of trustees have been described by the Maori Appellate Court in these terms: a) A duty to acquaint themselves with the terms of trust; b) A duty to adhere rigidly to the terms of trust; c) A duty to transfer property only to beneficiaries or to the objects of a power of appointment or to persons authorised under a trust instrument or the general law to receive property such as a custodian trustee; d) A duty to act fairly by all beneficiaries; e) A duty of trustees to invest the trust funds in accordance with the trust instrument or as the law provides; f) A duty to keep and render accounts and provide information; g) A duty of diligence and prudence as an ordinary prudent person of business would exercise and conduct in that business if it were his or her own; h) A duty not to delegate his or her powers not even to co-trustees; i) A duty not to make a profit for themselves out of the trust property or out of the office of trust: Garrow and Kelly Law of Trusts and Trustees (sixth edition, pp inclusive). 20 Rameka v Hall [2013] NZCA 203.

10 113 Waikato Maniapoto MB 254 Report of the farm consultant [26] John Hall, a farm consultant of AgFirst Waikato Ltd, was engaged by the Court to provide a report regarding the existing state and condition of the Aramiro farm and whether it was being run competently, taking into consideration allegations made by owners. In preparing his report, Mr Hall was required to review materials relevant to the proceedings, liaise with the parties and carry out a site inspection. Mr Hall filed his report with the Court in August [27] Mr Hall s report examined key areas of the farm operation, including the condition of the farm, the governance and management, and financial matters. The overall findings of Mr Hall s report are summarised below. Condition of the farm (a) The general standard of the pastures, fences, track and races is satisfactory and the farm infrastructure of houses, woolshed and barns are in average to fair condition, however the stock yards need immediate maintenance and a new bridge will need to be considered; (b) The two main weeds of gorse and nodding thistle are at a reasonable level of control, but it is critical that there is an annual budget for weed spraying and that this is carried out at the correct time of year; (c) It is important that a regular programme of farm maintenance for fencing, drainage, farm buildings and water is planned each year. Quantities of fertiliser were previously applied in line with available cash each year but a fertiliser programme based on soil tests is now planned; and (d) The number of stock units on the farm is low by industry standards and these levels are considered manageable by one experienced sheep and beef farm manager.

11 113 Waikato Maniapoto MB 255 Governance and management (e) The farm lacks both a transparent strategic plan and an annual farm plan. An environmental plan to cover nutrients, water ways, and sustainable land use is also required; (f) The governance and management of the farm is spread across several people, including 4-5 trustees, an accountant, a farm manager, a farm advisor, and a stock agent. This collective input results in no singular person taking full responsibility for managing the whole business. A review of the management model and the number of meetings necessary should be considered; and (g) The farm manager has limited experience in carrying out all tasks normally expected in this role and the other revenue streams of dairy grazing and maize are managed independently of the farm manager. The development of a clear farming strategy is needed, establishing appropriate performance targets for the manager and to authorise and delegate spending limits so timely decisions can be executed. Financial matters (h) The accounts to 30 June 2012 showed stock returns were at a reasonable level and returns from dairy grazing and maize are fair and reasonable. However, expenditure was up in key areas such as fertiliser, house maintenance, weed spraying and wages. In particular, wage increases to engage labour for weed control appear very high; (i) An annual budget is prepared by the farm advisor, accountant and farm manager and discussed and approved by the Trustees; (j) Delegation for general on-farm expenditure is via the farm manager; however some expenditure decisions are delayed pending a trustee meeting, which is a potential cost against business. It is noted that it is not

12 113 Waikato Maniapoto MB 256 uncommon for the farm supervisor role to be delegated this higher level of responsibility; and (k) Capital expenditure will be needed for some major upgrades and farm development in relation to a new bridge, stock yards, plant and machinery, and house and building renovations. The trustees and management team will need to plan how this is managed. Other matters (l) Aramiro has 549 ha in forestry with the proposed harvest after The value is forecast at $2.5 - $3 million on present day returns. Future use of this land will need to be planned prior to harvest; (m) There is an existing arrangement with a local dairy farmer for grazing with revenue estimated at $60,000 - $70,000. The arrangement has worked well and this policy is considered to be a good ongoing opportunity for the farm; (n) The maize arrangements for silage by a local maize contractor have been ongoing for several years. The rental paid is fair and reasonable with benefits to the farm being revenue and the employment of a re-grassing programme; and (o) The concerns expressed by the owners were mainly in relation to the management and condition of the farm, and the lack of a transparent farm plan. The trustees responses to the concerns provided reasonable answers but lacked a longer term plan. It was acknowledged that some of the concerns raised by the owners will need to be incorporated into a farm plan. Strategic plan [28] The trustees completed the strategic plan for the Aramiro Trust in April 2014 and a copy was filed with the Court and distributed to parties. The plan sets out the mission statement, vision and values of Aramiro, and outlines the four main objectives of the Trust:

13 113 Waikato Maniapoto MB 257 (a) To have a profitable farm business; (b) To protect and enhance the land asset; (c) To utilise the farm forestry; and (d) To enhance shareholder pride. [29] The plan identifies specific actions to achieve the objectives and improve the management and overall business of the Trust. Importantly, it addresses the governance and operational structure of the farm and clarifies operational roles and responsibilities, outlines tools for monitoring and measuring the business performance, including forecast budgets and quarterly reviews, and it identifies the capital expenditure needs. [30] By direction of the Court the strategic plan was also presented to owners at an AGM held in December 2014 to outline the plan for implementation and for any feedback. According to the minutes of the AGM, the participants endorsed the strategic plan but noted that it should be implemented as a three year plan, rather than just one year, and should be monitored with progress reports provided at future AGMs. Review matters [31] As outlined earlier, following the initial hearing regarding the application to enforce the obligations of the Trust, Judge Clark noted that the Trust had not been reviewed since 1996 and directed the trustees to make that application. A review application was subsequently filed by the trustees. While the strategic plan addresses the governance of the Trust and its relationship to operational matters, Judge Clark also considered that the trust order needed to be reviewed and possible variations considered, given the issues regarding the auditing of accounts, the payment of trustee fees and appointment of trustees. Financial accounts [32] As the initial Court hearings identified, the trust order requires the financial accounts of the Trust to be audited annually; but this had not been completed in recent

14 113 Waikato Maniapoto MB 258 years. Mr Bowker confirmed that some of the accounts had not been audited due to the substantial expense involved and the financial position of the Trust at the time. He advised that the Trust had intended to seek a variation of the trust order to remove the audit requirement; however, while it had been briefly discussed with owners at AGMs, a variation had not yet been sought. [33] Following the direction of the Court, audited accounts were filed for the years 2009, 2010, 2011 and Further questions then arose regarding the financial accounts from owners, particularly in relation to timber sales, with some also expressing concern over personal loans to the Trust by the chairman, Mr Taiporohenui Day, and the accountant, Mr Bowker, without the proper approval of the owners. The Court also identified a significant increase in trustees reimbursements from the 2011 to 2012 years along with other administrative costs and wages paid. [34] The trustees explained the loans as being necessary for the immediate protection of the Trust, given the bank s withdrawal of loan and overdraft facilities in Urgent action was required to allow the Trust to continue to operate, with few options for financing available at short notice. Some capital stock was also sold to retire debt and spending and expenses were slashed. To the trustees credit a trading loss in excess of $150,000 in 2008 was turned around to a small annual profit in The Trust is now without debt, and by 2011 had posted an annual profit in excess of $135,000. [35] Other allegations that have been made regarding the financial accounts are of a general nature only and not supported by sufficient evidence for the Court to be aware of any serious financial issues. I also note that the auditors reports for 2009, 2010, 2011 and 2012 were unqualified, signalling that no issues with the accounts were immediately apparent. [36] The actions of the trustees in accepting personal loans from Mr Day and Mr Bowker in 2007 were unusual and could have resulted in conflicts of interest, for instance if the Trust had been unable to repay the loans. With the gift of hindsight, I accept that those decisions were taken at a time of crisis in order to preserve the assets of the Trust, and I am reluctant to now criticise the trustees for taking steps which allowed the farm operation to continue and return to profit. If unsuccessful then no doubt the trustees would

15 113 Waikato Maniapoto MB 259 have had to face the consequences of their actions. I also consider that the improved planning processes the trustees have adopted leave them better equipped to anticipate and deal with situations which could lead to financial pressures in the future. Trustee meeting fees [37] Mr Bowker advised that currently the trustees are paid meeting fees of approximately $ gross per meeting, in addition to reimbursement for travel expenses. This is the case despite the trust order only providing for reimbursement of the reasonable out-of-pocket expenses of trustees. This issue was raised early on by the Court and the trustees were warned that such payments were in breach of their trust order. The Court indicated that if such payments were to continue a variation to the trust order would be necessary. [38] The trustee meeting fees were subsequently discussed at the 2013 AGM and a motion passed that the trustees be paid a meeting fee to be determined by shareholders at each AGM. The amount of the fee set to apply from 1 January 2014 to 30 June 2014 was $ per meeting. The AGM also passed a motion that the trustee fees paid prior to 2012 be authorised. [39] Mr Hall s report identified that the governance and management of the farm was spread across too many people, with no single point of responsibility for managing the business and too many trustee meetings. This is likely to have contributed to the significant increase in trustees reimbursements from the 2011 to 2012 years. The trustees should now focus on reducing the number of meetings, and the improved planning and accountability process is likely to assist with that. [40] Although no specific wording was provided for the variation, I am satisfied that the payment of trustee fees has been approved and the variation to the trust order should be made. As I explained at the final hearing of these matters, I am prepared to allow the amount of $ per meeting which was approved to June 2014 to extend to the holding of the next AGM so that the owners may consider the level of meeting fee going forward from that point. An order in that regard will be made at the conclusion of this decision.

16 113 Waikato Maniapoto MB 260 Trustees [41] Another matter which arose was the question of the appointment of further trustees and a trustee rotation policy. In response to the concerns raised, the trustees suggested that an additional trustee could be appointed to the Trust to help alleviate concerns from owners regarding the overall management of the Trust. Elections were held at the 2012 AGM and, although there was some concern that new trustees be appointed amidst the existing conflict, two new trustees were appointed in 2013, one for that purpose and one to replace a resigning trustee. 21 Subsequently a further election was held at the 2013 AGM and Nicola Gilmoure was elected to replace Henry Gray who had resigned. Her appointment was approved at the final hearing of these proceedings and an order in that regard will issue shortly. 22 Overall performance of the Trust/Trustees [42] I am satisfied that the review has demonstrated that the Trust s approach to governance and management of the farm is generally sound. There are no grounds to remove or replace trustees on the basis of performance, and no orders will be made in that regard. [43] The preparation and adoption of the strategic plan by the trustees and owners addresses the lack of strategic and annual farm planning that was identified as an issue in the farm review. The plan responds to some of the issues raised by the applicants and other owners. As a result the trustees now have an effective tool to assist them in their planning and as a measure of the Trust s performance when they report to owners annually at the AGM. The plan now needs time to allow for its proper implementation. [44] The various concerns that have been raised by the applicants and other owners have been addressed during the hearings or in this decision. There will always be a range of views on how the farm should be run, and it is now time for owners to support the work of the trustees so they can focus on improving the operation of the Trust for the benefit all Waikato Maniapoto MB 99 (58 WMN 99). 98 Waikato Maniapoto MB 99 (98 WMN 99).

17 113 Waikato Maniapoto MB 261 owners. One way owners can support the work of the trust is to offer themselves for election as trustees. Remaining Issues [45] The only issues that now remain for the Trust are those regarding any further variations to the trust order, the replacement of trustees and the level of meeting fees. [46] I have confirmed Nicola Gilmoure s appointment as a trustee, which means that as things stand, the current trustees are Heemi Pukeikura, Kevin Heitia, Raiha Walker, Taiporohenui Day and Nicola Gilmoure. Given the passing of Mr Day, and from what I understand Ms Walker has expressed a wish to resign, an election for replacement trustees should be held at the next AGM. [47] The further matters which should also be addressed by the trustees at the next AGM are those regarding the level of meeting fees and a review of the overall trust order for potential variation or the adoption of the new ahu whenua trust order. In particular, consideration of whether a trustee rotation policy is needed, what an appropriate number of trustees might be, and whether the auditing requirement for the Trust s financial accounts is still necessary. Conclusion [48] I acknowledge the various concerns raised by the applicants and other owners. The majority of issues raised have now been dealt with. Mr Ernie Day is no longer employed by the Trust, the financial accounts of the Trust have been audited and filed with the Court and the Court has addressed the financial concerns raised by the owners with the trustees. The auditor s reports do not raise any additional concerns and the farm consultants report indicated that the financial returns for the farm appear reasonable. In terms of the condition of the farm, the farm consultant s report does validate some of the owners concerns but generally found the overall condition of the farm to be satisfactory. [49] The area of governance and operational management was the major concern and this has been addressed by the adoption of the strategic plan. With the plan now in place

18 113 Waikato Maniapoto MB 262 this should have a flow on effect in terms of improving the condition of the farm and the business of the Trust, but will need time to develop. The owners will be able to monitor progress against the plan when the trustees report annually at the AGM. The addition of new trustees should also go some way to further alleviating the owners concerns regarding trustees and should address some of the communication concerns. [50] An order is made pursuant to s 244 of the Act for a variation of the current trust order in relation to the Aramiro Trust by inserting the following clause: Each trustee is entitled to an honorarium by way of a trustee fee per trustee meeting as fixed at a General or Special meeting. In fixing the honorarium, the beneficial owners shall have regard to the nature of the Trust s activities and in particular their commercial nature, the profitability of the Trust, the number of trustees and the likely cost of such fees as a reasonable and valuable part of the Trust s operation. [51] The review is otherwise concluded and no enforcement of the obligations of the Trust is necessary. All applications are therefore concluded. The next review of the Trust should be conducted in Dated at Wellington this 7 th day of January S F Reeves JUDGE