IN THE MĀORI LAND COURT OF NEW ZEALAND AOTEA DISTRICT A IN THE MATTER OF Horowhenua 11

Transcription

1 293 Aotea MB 165 IN THE MĀORI LAND COURT OF NEW ZEALAND AOTEA DISTRICT A UNDER Sections 239, Te Ture Whenua Māori Act 1993 IN THE MATTER OF Horowhenua 11 AND JONATHAN PROCTER, KERI TE PA, BRENTON TUKAPUA, ROBERT WARRINGTON, WAYNE HURUNUI, MATHEW SWORD, KELLY TAHIWI, VIVIENNE TAUEKI, EUGENE HENARE, MAROKOPA MATAKATEA AND CHARLES RUDD Applicants Hearings: 290 Aotea MB 261, 2 October Aotea MB 24, 16 January 2012 (Heard at Levin) Judgment: 26 November 2012 RESERVED JUDGMENT OF JUDGE L R HARVEY Introduction [1] On 23 July 2009 the current trustees of the Lake Horowhenua Trust were appointed for a term of three years. 1 Brenton Tukapua was appointed on 16 January On 4 August 2012 at my direction a general meeting of beneficiaries was convened by the Registrar for the purpose of conducting an election of trustees as all 11trustee positions were deemed to have fallen vacant. 3 More than 11 nominations were received and considered by the beneficiaries including several current trustees Aotea MB 1 (238 AOT 1) 278 Aotea MB 172 (278 AOT 172) 285 Aotea MB 135 (285 AOT 135)

2 293 Aotea MB 166 [2] After that meeting opportunity was given to the beneficiaries to make submissions on the nominees and the election process both at hearings and in writing. A number of submissions have been made and objections filed against the appointment of several nominees. Since then the affected individuals have also been provided with the opportunity to make submissions in response. [3] As all submissions have now been received and have raised a number of important points I consider that the relevant issues for determination are: (a) (b) (c) (d) (e) (f) Does the Court have jurisdiction to appoint trustees? Was the election process flawed? How are beneficiaries of the trust identified? Do any of the nominees have conflicts of interest? Who should the Court appoint as trustees? Should the Court apply terms of trust? Submissions in support of the successful nominees [4] The 11 highest polling candidates submitted that they had the ability, experience and knowledge to fulfil the role of trustee and that they were fit and proper persons for appointment. A number also rejected criticisms of their past performance and claims of conflict of interest and argued that they had performed their duties diligently as trustees. [5] Several nominees also highlighted their professional background and credentials, underscoring the skills that they say they bring to bear to the role of trustee. Some nominees also pointed out that they were also supported by a majority of beneficiaries and accordingly should be appointed forthwith. Submissions in opposition [6] A number of submissions in opposition to the appointment of the 11 successful nominees were also made, primarily by Charles Rudd, Tama Ruru, Philip Taueki and Vivienne Taueki. Several points were made including claims that the election process itself was flawed because voting was not by shares. In addition, objection was raised to the process of identification of beneficiaries and also the requirement on the voting form for a statutory declaration of affiliation to Muaūpoko.

3 293 Aotea MB 167 [7] Further, concerns were expressed over allegations of lack of accountability of current nominees over assets of the trust. Mr Ruru in particular referred to the loss of trust property including vehicles where he claimed that at least two of the current nominees had responsibility for the stewardship and control of such assets. In his view their alleged failure to be accountable for trust assets meant that they should be ineligible for appointment. [8] Another key submission in opposition concerned claims of conflict of interest and how at least two of the nominees had placed themselves in either an actual or at least a perceived conflict, given their contractual relationships with local authorities and third parties including another iwi. It was suggested that such conflicts had not been managed and had influenced particular trustees decision making to the detriment of the interest of the beneficiaries. Examples of alleged conflicts included representation claims, working for the tribal authority or local authority, acting as representative for another iwi, giving permission to territorial authorities to enter trust land and cause harm to the land and customary fishing rights. [9] The submissions in opposition also made reference to ongoing litigation in this and other Courts concerning activities in and around Lake Horowhenua and the roles of current nominees in those events. The recent conflicts and disputes at the Lake itself has been a continuing point of contention for various parties including the beneficiaries and the trustees from time to time. Mention was also made in passing of what could be described as mandate issues concerning Lake Horowhenua, Muaūpoko iwi and the beneficiaries of this trust. Discussion Does the Court have jurisdiction to appoint trustees? [10] Phillip Taueki submits that section 353 of the Act in effect prohibits the Court from appointing trustees. I disagree. Section 236 of the Act provides that s 239 applies to all trusts over Māori land. It is a fact that trustees were appointed to this land in the late nineteenth century. It is also a fact that they have been replaced on several occasions by the Court. I am not aware of any appeals or applications for rehearing or judicial review being filed in respect of those appointments. I am therefore satisfied that this Court does possess the necessary jurisdiction to appoint trustees.

4 293 Aotea MB 168 Was the election process flawed? [11] Mr Rudd and to some extent Mr Ruru complain about the process of election. They both say that voting should have been by shares rather than one owner one vote. I disagree. All previous meetings of this trust have been on a one person one vote basis. That includes the meetings that supported Mr Rudd s own nomination as a trustee. If he is now saying he opposes that method then that must surely call into question his own appointment which I did not understand him to suggest. The Court of Appeal in Clarke v Karatiana 4 has held that the Māori Assembled Owners Regulations 1995, which require voting by shares, amongst other things, do not apply to meetings convened where the land is subject to a trust. I need not encumber this decision with their reasoning suffice to say that a voting by shares regime does not apply in this instance. [12] In addition, it will be remembered that the Māori Appellate Court has also held that where terms of trust are silent on the mode of voting then voting will be by show of hands or one person one vote rather than shares. 5 I am satisfied therefore that based on those precedents referred to and the practice of this trust over the last decade that voting on a one person one vote basis was appropriate. [13] Complaint is also made as to the use of postal ballots. As was underscored in my previous judgment, I see no reason to exclude the views of beneficiaries who cannot attend a general meeting in person. Their reasons for non-attendance may include care-giving, employment, health or transportation challenges, and even so, I do not accept that their opinions cannot be taken into account when considering issues like the appointment of trustees. The Māori population remains a constantly changing demographic with the effects of urbanisation and now resettlement overseas. The personal domestic circumstances of a beneficiary or owner should not deny their ability to express their view one way or the other on the appointment of trustees. [14] Mr Rudd has also expressed concerns over previous successions and how, due I apprehend, to suggestions of a lack of notice, some successions might have been challenged in open Court. The process of successions to the original 81 grantees of Horowhenua 11 has been in train for almost a decade. A number of challenges have arisen as part of those 4 5 Clarke v Karaitiana [2011] NZCA 154 at [51]-[53] Thomson - Pokuru 1A1B2 and 1A2D2 (Wipaea Manu Block) (1997) 19 Waikato Maniapoto Appellate Court MB 66 (19 APWM 66)

5 293 Aotea MB 169 succession processes. I am sure they will continue to arise in the future. If Mr Rudd or any other interested party questions or disputes any of the previous succession orders then they are free to apply for a rehearing, to appeal or to apply for a judicial review. Mr Rudd can also request a list of individuals who have been subject to succession as it concerns Lake Horowhenua. In the meantime, however, until there is any further order of the Court then the succession orders that have been made remain valid. How are beneficiaries of the trust identified? [15] A continuing point of contention raised from time to time by beneficiaries is the vexed question of beneficiary identification. It has been determined previously that to be a beneficiary of the present trust an individual must first be an owner in Horowhenua 11 and a member of the Muaūpoko iwi. A determination as to whether or not an individual is an owner in the Horowhenua 11 block is a question of fact. While I acknowledged that some may question whether an individual is an owner by whakapapa or through succession via a will, legal adoption or some other form, the point remains that such individuals that are on the Court s list are in fact owners. The answer to the next question - is the individual a member of the Muaūpoko tribe - is surprisingly more contentious. I have emphasised repeatedly, both in two previous written judgments, and during hearings, that it is not for the Court to decide who is and who is not a member of Muaūpoko. That is a matter for the whānau and hapū of Muaūpoko supported by the traditional custodians of their customary knowledge, the kaumātua. [16] Ms Taueki makes a valid point that a member of the iwi ought to know the hapū and marae with whom they affiliate. However, it is interesting to note in this context the fact that, according to the last census, the most numerous group of Māori were those who did not know their tribal affiliation. Put another way, there will be those exceptional cases where, for various reasons, individuals have become disconnected to their tribal home lands and access to customary knowledge. They may not know which hapū and marae they affiliate with directly. That will not mean in terms of whakapapa and affiliation they are not members of the tribe. It just means they do not know which hapū and marae they connect with. So having a nomination or voting form that includes reference to hapū, marae and even urupā would be useful for tribal census purposes and to ensure that a more robust form of database is slowly being created by the people themselves. I did not understand however that tribal affiliation necessarily required knowledge of marae and hapū.

6 293 Aotea MB 170 Do any of the nominees have conflicts of interest? [17] Ms Taueki and others have alleged that at least two of the trustees, Messrs Proctor and Warrington have or may have conflicts of interests due to their contractual relationships with local authorities and other third parties. Mr Ruru also argues that Mr Matakatea has a conflict of interest along with Mr Warrington over an alleged lack of accountability regarding trust assets, namely two vehicles that are no longer recorded in the trust s schedule of assets. [18] Dealing with the last matter first, Mr Matakatea confirmed at the last hearing that the vehicles mentioned were acknowledged in the trust s 1997 annual accounts. Since that time has elapsed, some 15 years in accordance with orthodox accounting practices, they would have been written off in any event due to their age. More importantly, he argues that the annual accounts which included reference to the writing off of the two vehicles had been accepted by the beneficiaries. It will be remembered that in a decision issued in 2005 I also recorded that the performance of the then trustees left much to be desired and that accountability for use of trust resources, primarily funds, was not in accord with best practice. Of those trustees only Mr William Taueki and Mr Matakatea remain in office to this day. [19] In any event, the beneficiaries who took part in the election process who attended previous meetings of the trust will have been aware of the state of the trust s finances and the questions surrounding the vehicles. I accept Mr Matakatea s evidence given on oath that he does not have knowledge of what eventually happened to the two vehicles that were the property of the trust. If Mr Ruru or anyone else has other evidence then they are welcome to submit that to the Court for further inquiry. The short point is that I do not consider the issues raised by Mr Ruru should disqualify either Mr Matakatea or Mr Warrington. [20] Turning to the claims of actual or perceived conflicts of interest, as foreshadowed, trust orders often make provision for the management of such issues. It is well known that the standard wide powers ahu whenua trust order makes explicit reference to how conflicts of interest are to be managed. In addition, some trust orders for whenua tōpu trusts have more detailed provisions for dealing with conflicts of interests by trustees. Regardless of whether or not any of the current trustees have actual or perceived conflicts of interests, it is critical for the ongoing administration of the trust that this matter is dealt with appropriately. It is likely that the only practical way of disposing of this issue is for the Court to issue terms

7 293 Aotea MB 171 of trust that prescribe in detail a process for managing any actual of potential conflicts of interest. [21] Regarding the allegations of actual or perceived conflicts both Dr Proctor and Mr Warrington must ensure that they adhere to robust and transparent processes where such circumstances might arise. This means that if they are connected with or interested in any contract, agreement or arrangement of any kind with a third party which may give rise to their duty to the beneficiaries conflicting with their personal interests, they must give notice of the possibility of any potential or actual conflict to the trustees and then they must withdraw from any discussion or deliberation. This also means that they must leave any properly convened meeting of trustees where such matters are being discussed to ensure that they do not influence in any way the outcome of the trustees discussions. [22] If at any time either they or any other trustee who may fall into this position or the trustees as a group are unsure then they must apply immediately for directions from the Court. The purpose of rules against conflicts of interest is to ensure that the interests of the beneficiaries remain paramount and that the activities of the trustees both as individuals and as a group are beyond reproach. Put another way, rules for managing conflicts of interest are applied to ensure all of the interests of affected parties and in particular the beneficiaries are protected at all times. It is a well settled principle of trust law that a trustee cannot be the author of his or her terms of engagement. [23] In my assessment of the available evidence before the Court, I discern nothing therein to excite the Court s suspicion that actual conflicts of interest exist that would compromise the ability of either Dr Proctor or Mr Warrington to act as trustees. That said, it is essential, as I have mentioned, for both nominees and indeed any other trustees, to ensure that they declare any possible conflicts and that they do not participate in any deliberation of the trustees concerning such matters. At the risk of belabouring the point, where trustees are unsure or have concerns then they must apply to the Court for directions Who should the Court appoint as trustees? [24] It is evident from the evidence that once again the beneficiaries remain divided. Given the history to the present proceedings, and indeed of the Lake Horowhenua Trust itself over the preceding decades, this is unsurprising. The views of individuals and their supporters are strongly held and that too is understandable given the circumstances. Even so, the trust requires trustees if it is to operate at all, let alone effectively. Trustees are

8 293 Aotea MB 172 appointed by the Court following a process of election. While in previous decades that process may have been less controversial than it is today, the present reality is that for almost a decade in my experience, the role of trustees and the process for their election has been contested. Regardless of what the Court may or may not do that situation is unlikely to change. That is because there is no short or simple answer to the many issues that challenge and vex both the trustees and the beneficiaries of this trust. [25] A publicly notified election process was overseen by the Registrar. It included provision for postal ballots to enable those beneficiaries who could not attend the meeting in person to express their point of view. The Court of Appeal has underscored that this Court should fashion its processes to ensure the widest possible participation of beneficiaries in an election process. Following the conclusion of the election process, as foreshadowed, opportunity was provided for beneficiaries to make submissions in support of or in opposition to the nominees. [26] The tests for the Court are set out in s222 of the Act. These tests have been considered on many previous occasions. The 11 highest polling candidates are clearly broadly acceptable to the beneficiaries. I am also satisfied that all nominees, including those who are unsuccessful, possess a range of relevant and complementary skills. Having reviewed all relevant evidence in the Court record, including that of previous proceedings, I acknowledge that all nominees have the necessary ability, experience and knowledge to fulfil the role of trustee. [27] In summary, having carefully considered the submissions that have been made, I am not persuaded that the Court should intervene to disturb the outcome of the election process. The 11 highest polling candidates will therefore be appointed responsible trustees for the Lake Horowhenua Trust for a term of three years. I rely on the principles set out by the Māori Appellate Court in its decision Short v Mitchell, Pukeroa Oruawhata Trust, which underscored the importance of accountability on trustees through the mechanism of rotation and the periodic election of trustees process. 6 It has also been evident since the issue of my decision in 2005 that the beneficiaries strongly prefer that trustee appointments are not open ended and are for a finite term to enable the beneficiaries to either re-elect or replace trustees as they consider appropriate. 6 Pukeroa Oruawhata Trustees v Mitchell - Pukeroa Oruawhata Trust (2006) 11 Waiariki Appellate MB 66 (11 AP 66)

9 293 Aotea MB 173 Should the Court apply terms of trust? [28] Mr Rudd argues that if only the Court had accepted a trust order approved by the beneficiaries by show of hands then the current challenges over trustee rotation, election and appointment could have been avoided. That stance conflicts with Mr Rudd s strident opposition expressed at the 2011 general meeting which considered the adoption of a draft trust order. To say in 2012 that somehow it was the Court s responsibility to impose the 2009 draft of a trust order against the wishes of beneficiaries including the subsequent opposition of Mr Rudd appears somewhat contradictory. [29] That said, it may be that as this trust has not been subject to statutory review per section 351 of the Act that I should simply order terms of trust based on the more comprehensive examples currently used by the Court in whenua tōpu trusts where a high degree of prescription has been included. Such prescription appears to be necessary for those trusts where there is a history of dysfunction and dispute over elementary processes including the convening, recording and facilitating of meetings as well as issues like accountability of trust funds and actual or perceived conflicts of interest and how they can be appropriately managed. The uncontroverted evidence is that this trust does not function effectively to the point where independent facilitator s of trustee meetings is required. On this point at least all of the trustees are agreed. [30] Proposed terms of trust have been with the trustees and beneficiaries before Detailed procedures for even the most mundane matters of convening meetings, the notice required and meeting procedures are clearly required for this trust. As I mentioned in a previous judgment, without the participation of Court staff to facilitate trustee meetings, such hui would simply not proceed or would soon break down into open conflict. While I accept that the purpose and objects of the trust remain a work in progress from the perspective of some beneficiaries, at the very least the trustees will be assisted by the provision of detailed terms of trust that focus on the administration and management of trustee and beneficiary meetings. [31] That said, any terms of trust that will apply to the trustees from the date of this judgment should properly be subject to ongoing discussion with the beneficiaries at the earliest opportunity. To that end I direct the trustees to raise at the next general meeting of beneficiaries for discussion the terms of trust annex to this decision. For the avoidance of doubt, the trust order will operate from the issue of this decision and all trustees and the beneficiaries are to be bound by its terms.

10 293 Aotea MB 174 [32] For completeness I direct Court staff to attend the next meeting of trustees and for Mr Hau to facilitate the hui. The agenda should include the election of officers namely a chairperson, deputy if required and a secretary. The issue of conflicts of interest will also need to be dealt with including the use of a conflicts register. The court staff should again take the minutes of the meeting and provide me with a report on the outcomes as soon as possible. Decision [33] In accordance with the election held on 4 August 2012 Jonathan Procter, Keri Te Pa, Brenton Tukapua, Robert Warrington, Wayne Hurunui, Mathew Sword, Kelly Tahiwi, Vivienne Taueki, Eugene Henare, Marokopa Matakatea and Charles Rudd are appointed trustees for a term of three years. [34] Terms of trust concerning the administration and management of the trust are annexed to this judgment. The trustees are directed to adhere to these terms of trust without exception. The trust order will be discussed at the next general meeting of beneficiaries of the trust to be held within 12 months from the date of this decision where the trustees may consider any proposals for variation of trust to ensure that the trust order remains responsive to and relevant for the aspirations of the beneficiaries. These orders to issue forthwith, per rule 7.5(2)(b) of the Māori Land Court Rules Pronounced in open Court at 2.15 pm in Rotorua on Monday this 26th day of November 2012 L R Harvey JUDGE