IN THE MĀORI LAND COURT OF NEW ZEALAND [NAME OF REGISTRY] A Applicant. RANGIMOEKE HOUPAPA Respondent

Transcription

1 85 Waiariki MB 107 IN THE MĀORI LAND COURT OF NEW ZEALAND [NAME OF REGISTRY] A UNDER Section 240, Te Ture Whenua Māori Act 1993 IN THE MATTER OF BETWEEN AND HURAKIA TRUST KAWANA WIKIRIWHI Applicant RANGIMOEKE HOUPAPA Respondent Hearing: 21 October 2013 (Heard at Rotorua) Appearances: Mr Colin Handley for the applicant and Mr Mark Milroy for the respondent Judgment: 24 October 2013 RESERVED JUDGMENT OF JUDGE C T COXHEAD Copies to: Mr Colin Handley, McKechnie Quirke & Lewis, PO Box 242, Rotorua lynette@mql.co.nz Mr Mark Milroy, Foster & Milroy, 4 Knox Street, Hamilton mark@fmlawyers.co.nz

2 85 Waiariki MB 108 Introduction [1] This is an application to remove Rangimoeke Houpapa as a trustee of the Hurakia Trust. [2] The essence of the application is that Mrs Houpapa has failed to carry out her duties as a trustee satisfactorily in interfering in the dairy farming activities of the Trust against the specific directions of the trustees. Further, she does not or will not recognise her proper function as a trustee. Trustees Application [3] There are 6 trustees on this Trust being Mr David Cairns, Kawana Wikiriwhi (chairperson), Miriama Matene, Stacey Hakaraia, Wanda Ashby and Rangimoeke Houpapa. Mrs Houpapa was appointed in [4] The application was initiated following a meeting on the 14 th of August 2013 where resolutions were passed by 5 of the 6 trustees that: (a) That the trustees confirm earlier resolutions that all matters relating to farm management are to be handled through the chairman and/or David Cairns; (b) That the trustees resolve the actions to date of Rangimoeke Houpapa in interfering in management and other matters relating to the farm are completely out of order and she must forthwith desist; (c) That to assist in the above the trustees resolved that a trespass order be issued against Rangimoeke Houpapa forbidding her to enter on to the Trust property; (d) That the trustees request that Rangimoeke Houpapa forthwith resign as a trustee of the Trust and if that resignation is not received at this meeting then an application be made to the Māori Land Court pursuant to the Trust powers as set out by the Court, namely clause 8(b)(ii) and pursuant to s240 of Te Ture Whenua Māori Act 1993 for the immediate removal of said Rangimoeke Houpapa as a trustee on the grounds that she has failed to carry out the duties of her trusteeship satisfactorily

3 85 Waiariki MB 109 and further that her actions mean that the trustees cannot carry out the effective management of the Trust property and the achievement of the purposes of the Trust; (e) That each of these resolutions shall be taken separately and in the above order. All resolutions may be passed by majority of trustees. [5] The resolutions were passed and Mrs Houpapa did not resign. Therefore, an application was made for her removal. Applicants evidence [6] Evidence was presented on behalf of the applicants which show that Mrs Houpapa s behaviour has at times been difficult for the other trustees and staff of the Trust farm to deal with. She has also involved herself in a number of farm management issues. [7] Mr Stephen Graham spoke about how Mrs Houpapa has continually questioned historical decisions of previous trustees even though those decisions have been rescinded by current trustees. Further, he stated that meetings attended by Mrs Houpapa are difficult due to her behaviour, to the point where she has left a meeting. Further, in one incident Mrs Houpapa refused to sign a finance agreement even though all trustees had previously approved the Capex budget. Although Mr Graham did confirm for the Court that the financial implications of this were limited. [8] Mr Lee Matheson had raised governance concerns with regards to the conduct of the Hurakia trustees. I confirmed with him that his concerns were not solely with Mrs Houpapa, but were with all trustees. Mr Matheson also speaks about Mrs Houpapa threatening him in writing, being disruptive, and her actions exposing the Board the Trust to considerable risk in particular, in undermining the appropriately delegated authority of the farm manager and subjecting the farm manager to unacceptable and unreasonable personal attacks. [9] The farm manager, Mr John Mitchell, also provided evidence of Mrs Houpapa s actions disrupting farm management.

4 85 Waiariki MB 110 [10] The chair of the Trust Mr Kawana Wikiriwhi, provided evidence that Mrs Houpapa has constantly gone against the Board s decisions for her not to enter on to the farm, she has been disruptive and he raised concerns that they may lose more staff members due to her flagrant abuse. He had concerns that her behaviour would affect the farm and Trust assets. [11] All the evidence provided paints a picture of Mrs Houpapa being a somewhat disruptive trustee. She is a person who has questioned the decisions of the trustees as well as questioning actions of the farm advisors and Trust accountants who act as the Trust secretary. [12] In his closing submissions Mr Handley submitted that the actions of Mrs Houpapa put the assets of the Trust at risk. Further, a number of the advisors appeared to be reluctant to work with Mrs Houpapa given her behaviour. He asked that the Court remove her and reduce the number of trustees in order that at the next AGM an election of trustee can be held. Respondent [13] The respondent did not provide any evidence. [14] Mr Milroy in closing submissions sees things at a different angle than the applicants. He submits that it is appropriate for Mrs Houpapa to question decisions of the trustees. He has submitted that robust discussion is needed and required. He also submits that the Trust has not been stopped from continuing to operate and can make decisions by majority. [15] Mr Milroy inferred that there were questions regarding the abilities of all the trustees and submitted that all trustees should be required to attend trustee training. Legal Principles [16] The Proprietors of Mangakino Township v The Maori Land Court & Anor (CA65/99, 16 June 1999, Wellington) the Court of Appeal confirmed that this Court has

5 85 Waiariki MB 111 extensive supervisory powers in relation to trusts. Blanchard J noted at pp 9-10 that the Maori Land Court: is expressly given in s237 in respect of any trust to which Part XII applies all the same powers and authorities as the High Court has (whether by statute or by any rule of law or by virtue of its inherent jurisdiction) in respect of trusts generally. In other words it is to have the most extensive supervisory powers. [17] Section 238 of TTWMA provides the Court with jurisdiction to enforce the obligations of trust and to require trustees to account for their performance as trustees. Section 240 allows the Court to remove a trustee if the trustee has failed to, or is incapable of, satisfactorily carrying out their duties as trustee. Those sections state: 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). 240 Removal of trustee The Court may at any time, in respect of any trustee of a trust to which this [Part] applies, make an order for the removal of the trustee, if it is satisfied (a) (b) That the trustee has failed to carry out the duties of a trustee satisfactorily; or Because of lack of competence or prolonged absence, the trustee is or will be incapable of carrying out those duties satisfactorily. [18] Section 240 of the Act requires a trustee to have failed to carry out the duties of a trustee satisfactorily. The prerequisite for removal is not simply failure or neglect of duties but rather failure to perform them satisfactorily. An assessment of a trustee s overall performance in the role of trustee is essential when applying s240 and determining whether removal is appropriate. [19] Trustees of trusts constituted under TTWMA have four main responsibilities 1 : (a) Carrying out the terms of the trust;

6 85 Waiariki MB 112 (b) The proper administration and management of the business of the trust; (c) The preservation of the assets of the trust; (d) The collection and distribution of the income of the trust. [20] It is also worth noting the general duties of trustees which are: (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).

7 85 Waiariki MB 113 Decision [21] From the evidence put before the Court and in particular the evidence of Mr Wikiriwhi, it is clear that Mrs Houpapa s behaviour has caused issues for the Trust. She is obviously opinionated and makes her opinions known. She questions the advice of the farm advisors and questions the advice of the Trust s accountant. [22] However, there has been no evidence provided which suggests that the Trust has stopped operating or cannot continue to operate. Decisions continue to be made by the Trust and, even in Mrs Houpapa s absence, the trustees have moved forward and passed resolutions. [23] Mr Wikiriwhi expressed concern that the Trust advisors may discontinue working for the Trust if the trustees did not remove Mrs Houpapa. He provided evidence that the advisors did not want to deal with Mrs Houpapa. This is the closes inference provided, that in some way Mrs Houpapa s behaviour may affect the Trust through the trustees having to find new advisors and a new farm manager. [24] From the evidence provided it does not appear yet, that there is an inability of the trustees, in this Trust, to function. [25] I have not been provided any references to breaches of the Trust deed. The closes that has been mentioned is Mrs Houpapa missing three consecutive meetings. And therefore being in breach of clause 8(a)(iii), this evidence was given by Mr Wikiriwhi who confirmed for me that Mrs Houpapa had missed three consecutive meetings, but I find his recollection somewhat unreliable given he could not recall when the last AGM was or when the last annual audited accounts were presented. Nor was the Court provided with minutes of meetings showing Mrs Houpapa had not attended meetings. [26] It is clear that Mrs Houpapa is a nuisance. She will need to modify her behaviour and needs to ensure that she works with the trustees not against the trustees. However, I do not find that there are any breaches of Trust or that there is enough for me to consider that she is failing to carry out her duties satisfactorily as a trustee. However, I do not find that

8 85 Waiariki MB 114 there are any breaches of trust or breaches of trustees duties. Nor do I find that Mrs Houpapa is failing to carry out her duties satisfactorily as a trustee. [27] Therefore, Mrs Houpapa should not be removed and the application for her removal is dismissed. Concluding remarks [28] I do conclude with final words of warning to Mrs Houpapa. She does need to think seriously about the implications of her behaviour with regards to the Trust. At this moment there is not enough before the Court to conclude that her actions are putting the assets of the Trust at risk or that her performance in her role as trustee is such, to conclude that she has failed to perform her duties of a trustee satisfactorily. [29] However, Mrs Houpapa does need to remember that she is part of a team. If her actions get to such a point where she demonstrates an inability to work with the trustees, then that then maybe considered as a failure to carry out her duties satisfactorily and that could give reason for the Court to remove her as a trustee. [30] I agree with Mr Milroy, that all trustees should attend trustee training. The trustees are to contact the Māori Land Court to organise a time for them to attend trustee training. Pronounced in open Court at am/pm in Rotorua on the 23 rd day of October 2013 C T Coxhead JUDGE