IN THE MĀORI APPELLATE COURT OF NEW ZEALAND TAKITIMU ... · An appeal by Hōhepa Mei Tatere and Te Aroha Edwards, against orders of the Māori Land Court made on 29 March 2012 at

2013 Māori Appellate Court MB 243

IN THE MĀORI APPELLATE COURT OF NEW ZEALAND TAKITIMU DISTRICT

A20120007050

APPEAL 2012/4 UNDER

Section 58, Te Ture Whenua Māori Act 1993

IN THE MATTER OF

An appeal by Hōhepa Mei Tatere and Te Aroha Edwards, against orders of the Māori Land Court made on 29 March 2012 at 15 Takitimu MB 4-14 and on 4 April 2012 at 15 Takitimu MB 203-221 in respect of Mangatāinoka No 1BC No 2C, Tāmaki 2A2A (Balance) also known as Ngawapurua and Rua Roa Trusts

BETWEEN

HŌHEPA MEI TATERE AND TE AROHA EDWARDS Appellants

AND

TE AUTE TRUST BOARD AND THE EDWARDS WHĀNAU WAIAPU BOARD OF DIOCESAN TRUSTEES AND ANGLICAN PARISH OF DANNEVIRKE AND EMERY WHĀNAU Respondents

Hearing:

15 August 2012 (Heard at Hastings)

Court:

Judge L R Harvey (Presiding), Judge G D Carter, Judge S Te A Milroy

Appearances:

Mr L Watson and Ms E Dawson, for the Appellants Mr J Appleby, for the Edwards Whānau and Te Aute Trust Board Mr S Webster, for Waiapu Board of Diocesan Trustees and the Anglican Parish of St John's Dannevirke Mr N Milner, for the Emery Whānau

Judgment:

14 June 2013

RESERVED JUDGMENT OF THE MĀORI APPELLATE COURT

Copies to:

Mr Leo Watson, Barrister & Solicitor, PO Box 92 Paekakariki Kapiti Coast, [email protected].

Ms Emma Dawson, Bramwell Grossman, PO Box 500 Hastings 4156, [email protected].

Mr John Appleby, Ladbrook Law, PO Box 37633, Parnell, Auckland 1151.

Mr Nathan Milner, Kahui Legal, PO Box 1654, Wellington 6140.

Mr Stuart Webster, Sainsbury Logan & Williams, PO Box 41 Napier 4140

Ms Nicola Roberts, Dorrington Poole, PO Box 69, Dannevirke 4930.


Contents

Introduction [1]

Issues on appeal [6]

Background [8]

The whānau of Hōhepa Tatere I [8]

The Trusts [11]

Administration of the trusts [18]

The Distribution Agreement [20]

Māori Land Court proceedings [25]

Application for variation of trust order [25]

Application for rehearing [31]

Rehearing - 6 August 2009 [36]

Post rehearing events [40]

Māori Land Court decision [43]

Case on appeal [44]

The Law [49]

Discussion [54]

Reasons for Māori Land Court decision [54]

Estoppel – clean hands – good conscience [56]

Consent [64]

Withdrawal of consent [73]

Case of the Emery Whānau [86]

Decision [100]

Nature of Orders [102]

Delay [114]

Orders [117]

Costs [120]


Introduction

[1] On 9 July 1968 Hōhepa Tatere I had two trusts established by orders of the Mäori Land

Court over three separate blocks of Mäori freehold land that he had received by way of

succession from several tīpuna including Nireaha Tāmaki and Manāhi Paewai. One trust was

called Rua Roa and the other Ngawapurua. The trusts provided that specific whänau beneficiaries

would be entitled to income for a defined period of time after which the land would revert to

separate capital beneficiaries, namely Te Aute Trust Board in the Hawkes Bay (“TATB”) and the

Anglican Parish of Dannevirke (“the Parish”). Both TATB and the Parish are also income

beneficiaries. Hōhepa Tatere I died in 1971.

[2] The trustees adopted a policy of capital growth at the expense of income distribution.

They made no distribution to the income beneficiaries. Sometime after 2000, no doubt prompted

by complaints from income beneficiaries they realised that their policy was unfair, particularly to

the whānau beneficiaries, who were not also capital beneficiaries. In 2003 the trustees’ then

solicitor, Marcus Poole advised that they should take steps to provide for the whānau

beneficiaries. As a consequence the trustees initiated negotiations with the TATB and the Parish

on the possibility of an arrangement that would include the whānau beneficiaries.

[3] In 2007 a negotiated outcome was agreed where the capital beneficiaries would receive

Ngawapurua and the income beneficiaries would get Rua Roa. While the arrangement was not

recorded in a formal deed its details were confirmed by an exchange of solicitors’ correspondence

and in open Court. The trustees then filed an application for variation of the trust orders of Rua

Roa and Ngawapurua by bringing forward the dates upon which the entitlement of the income

beneficiaries ceased. This was to enable the income and capital beneficiaries to put the

distribution agreement into effect.

[4] The Mäori Land Court granted the variation application on 4 December 2007 by bringing

forward the date of distribution for both trusts to 1 February 2008. In June 2008 TATB took over

the farming operations of Ngawapurua including stock, Fonterra shares, chattels and land. The

sum of $1 million to reduce the mortgage over Rua Roa was paid by TATB to the trustees on or

about 8 October 2008. To secure its position TATB had the trustees sign an indemnity for $1.5

million payable if the trustees failed to transfer the title to the Ngawapurua lands in accordance

with the agreement. As at the date of the appeal hearing TATB continued to manage

Ngawapurua.


[5] The respondents named the Emery Whänau applied for a rehearing on the grounds that

they had not been notified of the original hearing and that as members of the preferred class of

alienees they were entitled to be heard. A rehearing was granted and heard on 6 August 2009.

The Court issued a judgment on the rehearing on 29 March 2012 reversing its earlier decision by

declining to grant the variation of trust orders. It was held that there was insufficient support for

the application. In response to argument that the beneficiaries were estopped from denying that

they consented to the application the Court found that the doctrine of equitable estoppel was not

available to the trustees, due in part to their conduct as alleged by TATB. The trustees have

appealed that decision.

Issues on appeal

[6] Two issues arise under this appeal for determination. Firstly, whether the Court, having

before it, the written consents of all the beneficiaries of the trusts, should have declined to vary

the trust orders in accordance with those consents. Secondly, whether TATB and the Parish are

estopped by their conduct from withdrawing their consents to the variation.

[7] For convenience we refer to the Record on Appeal as the “ROA” and the relevant page

numbers as “Folio”.

Background

The whänau of Hōhepa Tatere I

[8] According to counsel, Hōhepa Tatere I and his brother Nireaha Paewai were the

biological sons of Rangirangi Paewai and the grandsons of Manāhi Paewai. We are told that

Hōhepa Tatere I received his interests in the Tāmaki 2A1C and 2A2A blocks through succession

from Rangirangi and Manāhi Paewai. Counsel also states that Mangatāinoka 1BC No 2C1 was

held by Nireaha Tāmaki who had a daughter, Pirihira Tatere. Pirihira had no children but brought

up two whāngai sons, Richard Renata and Hōhepa Tatere I. Hōhepa Tatere I received lands by

succession from Pirihira and Richard including the Mangatāinoka 1BC No 2C1 block. It is said

that both blocks are affiliated to the Ngäti Pakapaka hapū of the Rangitāne tribe.

[9] Richard Renata and Isobel Tatere were the biological parents of Hōhepa Mei Tatere II,

one of the appellants in this appeal. Hōhepa Mei Tatere II has been described as the whāngai son

of Hōhepa Tatere I. Hōhepa Tatere I had no children. He legally adopted Pearl Tatere Emery, the

biological daughter of his brother Nireaha Paewai. Pearl Emery was the mother of Te Aroha


Edwards, the other appellant trustee in this proceeding. It is also said that Hōhepa Tatere I

brought up Te Aroha Edwards as his whāngai. Counsel further states that before he died Hōhepa

Tatere I married his former sister in law, Isobel Tatere.

[10] Pearl Emery had Te Aroha Edwards and four other children – those four children are the

respondents named as the Emery Whänau.

The Trusts

[11] The two trusts were established under s 438 of the Māori Affairs Act 1953 on 9 July 1968

over land owned by Hōhepa Tatere alias Hōhepa Mei Tatere I (“the Settlor”).1 Rua Roa Trust was

created over Tāmaki 2A1C Block (40.4686ha) and Tāmaki 2A2A (39.8969ha). Ngawapurua

Trust was established over the Mangatāinoka 1BC2C1 Block (84.3986ha). The trustees were

Hōhepa Mei Tatere II and Alan Raymond Fitchett. Mr Fitchett retired and was replaced by Te

Aroha Matawai Annette Edwards by order of the Court on 6 November 1998.2 Variations to each

trust were made by orders of the Court on 13 July 1970.3

[12] Initially the trusts provided for the payment of income to the settlor. He died on 20

August 1971. A further period of income distribution was then provided with the period ceasing

on the death of the survivor of certain named beneficiaries or the date upon which the last of a

class of beneficiaries attains the age of 40 years, whichever is the later.

[13] In the Mäori Land Court hearings the date when distribution of income ceases was

referred to as the date of distribution and we continue to refer to it in those terms. At the date of

the first hearing of the application on 4 December 2007 the date of distribution for the

Ngawapurua Trust was the later of the date of death of Te Aroha Edwards or 22 March 2012. For

the Rua Roa Trust it was 22 March 2012.

[14] Once the date of distribution for a trust is reached the payment of annuities and income

distributions for that trust cease and the final beneficiaries become entitled. These beneficiaries

(“the capital beneficiaries”) are the same for each trust and are TATB and the Parish as to a 4/5th

share and 1/5th share respectively. The Parish is not a legal entity and is administered by the

Waiapu Board of Diocesan Trustees which is shown as a respondent. For the sake of continuity

1 102 Napier MB 140 (102 NA 140) 2 155 Napier MB 64 (155 NA 64) 3 104 Napier MB 137 (104 NA 137)


we carry on using that reference while bearing in mind that it is represented by the Waiapu Board

of Diocesan Trustees.

[15] Both trusts provided for the net annual income to be applied in payment first of:4

All instalments of principal due under any Mortgage from time to time registered against

the said lands or any sums of money required to pay in whole or in part any indebtedness or

obligation incurred or entered into by the said Trustees in connection with the trusts hereof

or in the exercise of the powers or discretions conferred upon them.

[16] Then followed provisions for payment of several annuities. Of these the only annuities

remaining payable in December 2007 were $600 to Te Aroha Edwards under the Ngawapurua

Trust and $200 to the Parish under the Rua Roa Trust. The requirement for the latter payment

ceased on 22 March 2012.

[17] The balance of the income from each trust was to be paid to six children of Te Aroha

Edwards (“the Edwards whänau”), three children of Hepa Tatere (“the Tatere children”) and

TATB and the Parish “in such shares or proportions and to the exclusion of any one or more of

them as the said Trustees shall think fit”.5 We refer to these beneficiaries collectively as the

discretionary beneficiaries and to the Edwards whänau and the Tatere children collectively as the

nine discretionary beneficiaries.

Administration of the trusts

[18] The trust property is farmland. The trustees retained the original lands and farmed them

until they were removed by order of the Mäori Land Court on 4 April 2012.6 Over the years the

trustees purchased a number of other blocks of land and considerably increased the total area of

land farmed and correspondingly the value of the trusts’ assets. It is common ground that the

trustees have not made any distributions to the discretionary beneficiaries and instead chose to

expand the activities of the trusts by purchasing and selling investment lands from time to time

and generally making the lands profitable and reinvesting those profits.

[19] More recently the lands of both trusts have been farmed together under the Tatere

Partnership which was established in 1995. The trustees have signed partnership agreements on

behalf of each trust setting out terms including how partnership income is to be apportioned

4 102 Napier MB 140 (102 NA 140) 5 102 Napier MB 140 (102 NA 140) at clause (C) 6 15 Täkitimu MB 204 (15 TKT 204)


between each trust. The partnership it is said still operates today although from 1 August 2008

possession and control over the Ngawapurua lands and various assets has been exercised by

TATB in accordance with a distribution agreement negotiated between the parties.

The Distribution Agreement

[20] In 2007, after earlier approaches, the trustees, aware that the development of the trusts

meant that the discretionary beneficiaries had received no benefit from trust income, proposed to

TATB and the Parish that they would bring forward the date of distribution and that the two

capital beneficiaries would take one of the farms and the nine discretionary beneficiaries the

other. It was said that the arrangement would compensate the nine discretionary beneficiaries for

the fact that they had received no benefit from the trusts.

[21] It was eventually settled that the capital beneficiaries would take the Ngawapurua farm

free of debt. The nine discretionary beneficiaries were to take the Rua Roa farm subject to any

debts held by the trusts. This proposal met with general approval. TATB considered that by this

agreement it avoided the prospect of claims by the nine discretionary beneficiaries over the

failure of the trustees to provide any distributions to them. The agreement would also provide the

settlor’s whänau with some land. More importantly, the evidence confirms that the early receipt

of the Ngawapurua farm with its associated cash flow suited TATB’s then financial

circumstances.

[22] These negotiations resulted in the filing, late in 2007, of the application for variation of

the trust orders by bringing forward the date of distribution for both trusts. In a memorandum to

the Court dated 30 November 2007 Mr Gartrell as counsel for the trustees explained:7

Following a change in the legal and accounting advisors, a fresh examination occurred as to the terms of the Trusts and more particularly as to whether the income beneficiaries had been appropriately recompensed. Various figures were obtained but without historic records going back to the inception of the Trusts there was a huge amount of difficulty in terms of settling what might be the income beneficiaries’ interests. However on a prospective basis, it is clear that the income beneficiaries could have expected to receive substantial amounts if the capital assets were invested and income returned to those beneficiaries.

[23] Mr Gartrell forwarded to the Court with that memorandum a copy of a letter dated 18

October 2007 from TATB to the Parish recommending that the Parish agree to the arrangement

7 Folio 01120-01121 ROA


and a copy of a resolution of TATB dated 10 October 2012. The letter included reasons for

TATB’s support for the proposal as follows:

The Te Aute Trust Board has given its support to the settlement proposal in principle on the basis that:

It recognises that the enterprise has grown to such an extent that entitlements which the family may feel they have to the land given those changing circumstances can be met without rancour and long drawn out legal attrition and

Both beneficiaries access an income stream at a time when [dairy] prices are at record highs.

... In the meantime we will be seeking more financial information and having a budget undertaken by a farm consultant just to give us a full understanding of the income likely to accrue but suffice to say that this represents for both of us a substantial opportunity to access a solid income stream. So far as TATB is concerned it comes at [a] time of some financial strain for the Trust Board and would enable its finances to be put into a much stronger position where it can provide greater and much-needed support to both TATB and Hukarere.

[24] The letter went on to explain that an application had been filed in the Mäori Land Court

on a preliminary basis seeking a hearing on 3 December 2007 and that a necessary component of

that hearing would be that consents of the TATB and the Parish be available. The minutes of the

meeting of TATB on 10 October 2007 set out details of the arrangement:8

Agreement had been reached at the meeting subject to confirmation by the board that:

1. An application should be made to the Mäori Land Court forthwith to advance the date of distribution from the current date of March 2012. 2. The distribution is on the basis that the Tatere family retain the Rua Roa block. 3. All of the debt currently held by the trusts should go with the Rua Roa property. 4. The Ngawapurua property should go to the residual beneficiaries (the Te Aute Trust Board and the Dannevirke Anglican Parish of St Johns). 5. A payment of $50,000 per year for 5 years could be made by the residual beneficiaries to assist with debt financing. 6. The properties are to be divided on a ''going concern” basis – that is the cattle and Fonterra shares would go with the respective properties such that each property operates as a separate going concern. It was resolved that: That the proposal to accept the Ngawapurua farm stock and assets debt free in settlement of

the Te Aute Trust Board and Dannevirke Parish entitlement under the will in this matter be

approved in principle subject to due diligence and legal sign off, noting that the interest of

the Dannevirke Parish and thereby their approval must be taken into account.

8 Folio 01126 ROA


Mäori Land Court proceedings

Application for variation of trust order

[25] The application for variation of the trust orders to bring forward the date of distribution

was filed by the trustees and set down for hearing on 4 December 2007. The date of distribution

specified in the application was the date of hearing or another date to be confirmed.

[26] At the hearing Mr Gartrell, nominated 1 February 2008 as that date. In response Deputy

Chief Judge Isaac commented that the Court was not made privy to the proposed settlement. In

reply, Mr Gartrell explained that there were difficulties with Rabobank, which held a mortgage

over some of the lands and that final consent from the mortgagee had not yet been obtained.

Consequently some fine tuning could be necessary. He stated “what was required was to bring

the date of distribution forward and that was the only variation that was required to the two trust

orders”.9

[27] The Court made an order under s 244 of the Act varying the trust orders by bringing the

date of distribution forward to 1 February 2008. The order was subject to the filing of consents

by the income and capital beneficiaries. In a subsequent decision dated 19 August 2008 granting

a rehearing of the application for variation of the trusts the Court acknowledged that the consents

of both groups of beneficiaries had been filed by 11 August 2008.10

[28] After the hearing, as anticipated, the distribution arrangement had to be modified.

Rabobank would not consent to the proposal unless the mortgage over the Rua Roa lands was

reduced. TATB, who were to pay $50,000 per year for 5 years to reduce Rua Roa’s debt, was

instead required to pay $1 million for this purpose. Despite this significant change to the

agreement correspondence from TATB’s solicitor Mr Panhuys dated 6 March 2008 to Mr Gartrell

indicates acceptance of the changed arrangements.11

[29] The letter from Mr Panhuys points out that if the Court were simply to order that there be

an early distribution of the trusts that would not achieve the proposed intention of the parties.

There would then need to be the exercise of transferring the Rua Roa assets to the beneficiaries.

Mr Panhuys goes on to say that unless the transfer is effected by order of the Court the transaction

9 193 Napier MB 50 (193 NA 50) 10 196 Napier MB 286 (196 NA 286) at [28] 11 Folio 1127 ROA


could be subject to gift duty and that the transfer of Mäori land to the capital beneficiaries could

be subject to challenge.

[30] Despite the order of 4 December 2007 being subject to a rehearing the trustees and TATB

continued to work towards the proposed settlement. In June 2008 TATB took over the total

farming operations of Ngawapurua including stock, chattels and land. The Fonterra shares

applying to that land were also transferred to TATB. The sum of $1 million to reduce the

mortgage was paid by TATB to the trustees on or about 8 October 2008. To secure its position

TATB had the trustees sign an indemnity for $1.5 million payable if the trustees failed to transfer

to it the title to the Ngawapurua lands. These arrangements, consistent with the distribution

agreement, were still in place as at the date of the appeal hearing. We understand that as at the

date of this judgment that the status quo remains.

Application for rehearing

[31] An application for rehearing was filed by Richard Te Aorangi Emery and Samuel Kahu

Emery as executors of the Estate of Mariana Pearl Emery (Pearl Emery) and by William Graham

Whakataki Emery, a son of the deceased. Pearl Emery, an adopted daughter of the settlor, had

been entitled to annuities of $800 per annum under the Rua Roa Trust and $900 per annum under

the Ngawapurua Trust. The members of the Emery family who filed the application were

grandchildren of the settlor of the trusts and brought the application on behalf of four of the

children of Peal Emery (the Emery Whänau). They were not beneficiaries of the trusts and were

not involved in the hearing on 4 December 2007.

[32] The application did not specifically set out grounds but recited to the effect that the

applicants seek an order that Mrs Emery succeed to the lands held by the trusts and that the lands

should not be vested in TATB or the Parish as the land will be lost forever from the settlor’s

family. In addition, it was contended, in effect, that the lands should not pass outside the trusts as

to do so would be in contravention of Mrs Emery’s rights in accordance with her whakapapa,

mana whenua, tikanga and kawa.

[33] The application for a rehearing was heard on 5 June 2008.12 The grounds advanced for

the applicants were largely those referred to in the application. Those opposing, being counsel for

the Edwards whänau, the trustees, TATB and the Parish, all submitted that the applicants had no

12 195 Napier MB 253 (195 NA 253)


standing. At the ending of the hearing the Court reserved its decision and invited the applicants to

file further submissions.

[34] Further submissions were filed by counsel for the applicants on 25 June 2008. The

arguments included a claim that although the application was described as bringing forward the

date of distribution this was to enable the distribution arrangement to be effected. That then

involved the transfer of certain of the trust lands to the trustees and their respective families.

Moreover, it was said that the distribution arrangement was inconsistent with the trust and in

effect involved an alienation of the trust lands in terms of the Act. The applicants, by virtue of

their relationship to the settlor, are members of the preferred classes of alienees as defined in s 2

of the Act and are therefore interested in any proposed alienation of the trust lands.

Consequently, it was contended that had they been given the opportunity to attend the original

hearing they would have given reasons why the variation should not be granted.

[35] The Court accepted that the applicants had standing to bring the application as members

of the preferred classes of alienees.13 The Judge went on to find that the distribution agreement

involved much more than advancing the settlement date, raising “important questions which

highlight that further material evidence is required by the Court regarding the variation of trust.”14

The Judge went on to say that as a result “the application for rehearing is granted and the original

applicants for the variation of trust must come to Court prepared and ready to place all facts

relating to the variation before the Court.”15

Rehearing – 6 August 2009

[36] At the rehearing Ms Emma Dawson, counsel for the Trustees asked the Court to vary the

trusts to bring forward the distribution date and also in its discretion to make further orders to

give effect to the distribution arrangement. She provided full details of the distribution

arrangement and outlined how it was reached:16

….. There is no distribution agreement as such, it was correspondence that went backwards and forwards between solicitors and it took place as I understand, in informal meetings. The intention was that the TATB and the Parish would take the assets of Ngawapurua trust unencumbered and in consideration both for the income beneficiaries agreeing to forego their entitlement to future income and their many years of contribution

13 196 Napier MB 281 (196 NA 281) at [33] 14 Ibid at [38] 15 Ibid at [40] 16 204 Napier MB 189 (204 NA 189)


to the trust. The TATB and the Parish have in effect in lieu of a cash settlement agreed to vest the Rua Roa assets in the income beneficiaries. …..

[37] Mr Milner for the Emery whänau indicated that his clients would consent to the transfer

of Ngawapurua to TATB and the Parish if these bodies relinquished their right to Rua Roa and

offered it to the descendants of the settlor. In this way the Emery whänau would be included as

beneficial owners. TATB and the Parish were also to give a right of first refusal to the Edwards

whänau and the settlor’s other descendants in the event of their wishing to dispose of

Ngawapurua. Mr Milner argued that the Emery whänau were members of the preferred classes of

alienees in respect of the trusts’ lands, that the arrangement to vest the Rua Roa lands in the nine

discretionary beneficiaries was an alienation in the terms of the Act, and that the Emery whänau

should be given a right of first refusal to those lands.

[38] Other than the stance taken by the Emery whänau, the tenor of the hearing was to the

effect that there was general consensus to the Court granting the orders sought. None of the

beneficiaries withdrew their previous consent although the Parish sought time within which to

confirm its consent. Richard Tatere, whose written consent does not appear to be among those

filed, was present in person.

[39] Mrs Roberts, for the Parish, sought leave for the final beneficiaries to have seven days

within which to reach agreement over the distribution arrangement. The Court then reserved its

decision in the following terms:17

I am going to reserve my decision on this matter but prior to issuing the decision I am going to invite counsel Ms Lowe and Mr van Panhuys if you so wish to respond in more detail to the submission as to the alienation and also the position of the beneficiaries that has been made by Mr Milner and you will have 7 days to do that. I am also going to have the case manager contact Mr Appleby and give him 7 days to advise the standing of this application for the removal of the trustees. I am going to give you, Mrs Roberts, 7 days for your clients to contact the Te Aute Trust and to work out the management arrangements and to advise the Court whether or not they have been done to your satisfaction. At the conclusion of that time I am then going to depending on what I get, write a decision or issue a decision.

17 204 Napier MB 200-201 (204 NA 200-201)


Post rehearing events

[40] Memoranda consenting to the distribution arrangement were then filed on 13 August

2009 by the Parish;18 14 August 2009 by TATB;19 19 August 2009 by the Trustees seeking orders

to encompass distribution arrangements for both trusts.20

[41] A plethora of further Memoranda were subsequently filed over a three year period as set

out below:

Date Parties to proceedings Memoranda of counsel

Record of Appeal reference

28 August 2009 Emery whānau (counsel Mr Milner)

Withdrawing any consents and responding to trustees submissions

Folio 1019

28 August 2009 TATB (counsel Mr Panhuys)

Seeking leave to reply to submissions filed by Emery whānau

Folio 1014

21 April 2010 TATB (counsel Mr Appleby)

Withdrawing consent Folio 1004

4 June 2010 Parish (counsel Mrs Roberts)

Withdrawing consent Folio 1002

24 July 2010 Tatere children (counsel Mr Watson)

Seeking to be heard on withdrawals of consent

Folio 998

28 August 2010 Trustees (counsel Mrs Dawson)

presenting submissions over the withdrawals of consent

Folio 992

28 September 2010

Parish (counsel Mrs Roberts)

responding to memoranda by Tatere children and the Trustees

Folio 986

28 September 2010

TATB and the Edwards whānau (counsel Mr Appleby)

confirming the withdrawal of consent by these parties

Folio 982

28 September 2010

Tatere children (counsel Mr Watson)

submissions in support of the application

Folio 976

5 August 2011 TATB and the Edwards whānau (counsel Mr Appleby)

confirming withdrawal of consent

Folio 877

7 March 2012 TATB and the Edwards whānau (counsel Mr Appleby)

confirming withdrawal of consent and seeking decision as matter of urgency

Folio 921

21 March 2012 TATB and the Edwards whānau (counsel Mr Appleby)

restating their opposition to the application

Folio 914

18 (counsel Mrs Roberts) Folio 1038 ROA at [8] 19 (counsel Mr Panhuys) Folio 1031 ROA at [3] 20 (counsel Ms Dawson) Folio 1019 ROA at [4]


[42] We could find nothing in the record whereby the Judge formally admitted the documents

referred to at [40] and [41] above, that fell outside of his 7 day direction as part of the

proceedings or gave weight to the question as to whether leave to admit them should be

considered.

Mäori Land Court decision

[43] The Mäori Land Court declined to make an order varying the trusts in a judgment dated

29 March 2012.21 The reasons for refusal were that there was insufficient support for the

application. In coming to that conclusion the Court was influenced by the withdrawals of consent

following the sitting on 6 August 2009. In response to arguments based on estoppel the Judge

found that the trustees had not come to the Court with clean hands and consequently could not

avail themselves of the equitable doctrine of estoppel.

Case on appeal

[44] Included in the grounds of appeal are the following points:

(a) the failure of the Court to properly take into account consents to the variation by the

beneficiaries of the trusts;

(b) the placing by the Court of improper weight on the fact that the original application did

not disclose details of the distribution arrangement; and

(c) the failure of the Court to apply the doctrine of equitable estoppel in considering the

consents to the arrangement given by the beneficiaries of the trusts.

[45] We see no need to detail the submissions supporting those grounds as they will be

considered in this judgment.

[46] Counsel for TATB and the Edwards whänau presented submissions to the effect that there

was nothing to prevent these beneficiaries from withdrawing their consent prior to the Court

coming to a decision. TATB were justified in their decision to withdraw as the trustees had

misled them over the operation of the trusts. TATB was not aware of these circumstances until

21 15 Täkitimu MB 4 (15 TKT 4)


after the hearing on 6 August 2009. The Edwards whänau had decided that they were simply

income beneficiaries, did not want to participate in the argument any longer and wanted things

left as the settlor intended. We note here that TATB and the Edwards whänau have different

interests in this matter and that we did not hear separately from the Edwards whänau.

[47] Mr Webster for the Parish submitted that his client was entitled to withdraw its consent at

any time up to the making of an order. In addition he argued that no question of estoppel can

arise because the variation of the trusts was always contingent on Court oversight and until an

order was made, none of the parties was entitled to rely on any promise because it was never in

their collective power or control to fulfil that promise. Further, counsel contended that to hold

parties to bargains that are contingent on formal consent would be to make a nonsense of the

principles of estoppel. Moreover, he pointed out that the Parish never had any negotiations with

the trustees nor did it enter into any arrangement with the trustees.

[48] Counsel for TATB and the Parish presented submissions to the effect that the

discretionary beneficiaries had no right to any distributions as they were at the discretion of the

trustees; there was nothing to prevent the capital beneficiaries from withdrawing their consent

prior to the Court coming to a decision; and the trustees were always aware that they had to

obtain an order varying the trust to implement the distribution arrangement and that estoppel

could therefore not apply.

The Law

[49] The application for variation of the trust was made under s 244 of the Act which provides:

(1) The trustees of a trust to which this Part applies may apply to the Court to vary the trust.

(2) The Court may vary the trust by varying or replacing the order constituting the trust, or in any other manner the Court considers appropriate.

(3) The Court may not exercise its powers under this section unless it is satisfied-

(a) that the beneficiaries of the trust have had sufficient notice of the application by the trustees to vary the trust and sufficient opportunity to discuss and consider it; and

(b) that there is a sufficient degree of support for the variation among the beneficiaries.

[50] Under this section the power of the Court to make an order is discretionary. That power

will not be exercised unless three tests have been satisfied. The tests for the sufficiency of notice,


of opportunity for discussion and of support have been considered in a number of decisions

including Brown – Kairakau 2C5B,22Marsh v Robertson - Karu o te whenua B2B5B1,23 Brown v

Māori Appellate Court24 and Reid v Trustees of Kaiwaitau 1 – Kaiwaitau 1.25 Those authorities

underscore that sufficiency of support will depend on a range of considerations including the

nature and importance of the issue being decided, the extent of support and opposition and

whether notice has been adequate. Moreover, in The Trustees of Pukeroa Oruawhata v Mitchell 26

the Court of Appeal emphasised the importance of strict adherence to s 244 whenever the Court’s

discretion to vary a trust order was invoked.

[51] Given the nature of the two trusts we find it unlikely that the Court would make an order

without the consent of all beneficiaries whose entitlement under the trust might be adversely

affected. However, if that degree of support was available there would have to be good reason for

the Court to decline to make an order. Support need not involve formal written consent but could

include circumstances where the Court was satisfied that consent existed.

[52] The trustees also sought an order vesting the Ngawapurua lands in TATB and the Parish

under s 241(1):

(1) The Court may at any time, in respect of any trust to which this Part applies, terminate the trust in respect of-

(a) the whole or any part of the land; or

(b) the whole or any part of any interest in land subject to the trust,- by making an order vesting that land or that part of that interest in land in the

persons entitled to it in their respective shares, whether at law or in equity, or such other persons as the beneficial owners may direct.

[53] Section 241(1)(b) reflects the situation that applies to trust law, namely that the

beneficiaries may by arrangement, vary the distribution of the trust assets from that prescribed

under the trust and direct the trustees to distribute the assets accordingly. Again, the Court’s

jurisdiction is discretionary: Rata – Te Rōngoa A7.27

22 (1996) 11 Taitokerau Appellate MB 143 (11 ACTK 143) 23 (1996) 19 Waikato Maniapoto Appellate MB 40 (19 APWM 40) 24 [2001] 1 NZLR 87 25 (2006) 34 Gisborne Appellate Court MB 168 (34 APGS 168) at 172 26 [2008] NZCA 518 27 (1991) 13 Aotea Appellate Court MB 228 (13 WGAP 228)


Discussion

Reasons for Mäori Land Court decision

[54] These are contained in paragraphs [47] to [53] of the judgment:28

[47] However the Trustees and the Tatere children argue that the doctrine of equitable estoppel prevents the other beneficiaries from withdrawing their consents on the basis that there has been part performance of the variation agreement. [48] This argument is fundamentally flawed for two reasons. The first is simply that the variation of trust was dependent on an order from the Court. This has not been granted. [49] The second reason is that for the applicant to seek the protection of an equitable remedy, he must come to the Court with clean hands (AG v Equiticorp Industries Groups Ltd [1996] 1 NZLR 528). [50] When the clean hands doctrine is assessed in relation to the application for variation, a question arises as to whether this was in fact the case. [51] As stated earlier, the Court was assured by the applicant that the only variation was to bring the distribution date forward. As was later discovered, that submission was misleading, not only to the Court, but also to the beneficiaries. In my view the conduct of the applicant, which was manifested in counsel for the applicant’s submission, was not made in good conscience. [52] These submissions led to the consents being given but when all the facts were known in relation to the variation, these consents were withdrawn. [53] As a result of the above discussion I find that the provisions of s 244(3) of the Act have not been satisfied as there is not a sufficient degree of support for the application. Accordingly I now dismiss the application for variation.

[55] In the above passages the Judge considered that the appellants as applicants had failed to

provide the Court with full information as to the arrangement and that this was sufficient to

decline to consider the appellants’ submissions relating to estoppel. Having disposed of this

argument he then dismissed the application on the basis of an insufficiency of support. He found

that there was no need to consider the standing of the Emery Whänau. In short, the Court found

against the appellants on the issues of estoppel and consent. We now propose to examine those

issues under separate headings.

Estoppel - clean hands –good conscience

[56] The Mäori Land Court found that the submissions for the appellant were misleading,

particularly the advice that all that was required from the Court was a variation of the trust orders

28 15 Täkitimu MB 13 (15 TKT 13)


bringing forward the date of distribution.29 However, with respect to the learned Judged, a

review of the record confirms that this finding cannot be sustained.

[57] At paragraphs [20] to [24] above, we set out in some detail the composition of the

distribution arrangement. The trustees’ solicitor Mr Gartrell filed a memorandum in the Court on

30 November 2007 accompanied by a letter from TATB and the Parish along with a resolution

passed by TATB in which the terms of the proposed arrangement under discussion were clearly

set out.

[58] At the hearing on 4 December 2007 Mr Gartrell told the Court that the arrangement was

not final, that the consent of Rabobank as mortgagee was still required and that some refinement

of specific terms might be needed. He indicated that what was required was an order bringing

forward the distribution date and on that basis the parties, who were all in their own right able to

reach an agreement, would then carry out the arrangement that had been made. Although Mr

Gartrell did not say as much, it should have been apparent that further orders would be required to

put the arrangement into effect.

[59] On 4 December 2007 the Court made orders conditional upon the consents of all parties

being filed. No other conditions were imposed. In his decision dated 19 August 2008 on the

granting of a rehearing the Judge acknowledged that all consents had been filed by 11 August

2008.30 Those consents were evidence of the parties’ approval of the final terms of the

agreement. At that point the Court’s order ceased to be conditional. The order was part of a

series of orders which were needed to give full effect to the arrangement. The positions of and

rights of the parties were altered by the making of the order. We conclude that the issue of the

order by the Court at that point created an estoppel whereby the parties were estopped from

denying the arrangement.

[60] The Court ordered a full rehearing of the application for variation of the trust orders. It

provided for no stay over the original order. As it had made an order in favour of the applicants

with the consent of all parties it could well have, under s 43(1) of the Act, limited the extent of the

rehearing to a consideration of the argument for the new party, the Emery Whänau. It did not do

that and instead ordered a full rehearing.

29 See [51] and [52] of the Mäori Land Court decision contained at [54] above. 30 196 Napier MB 286 (196 NA 286) at [28]


[61] As a consequence the applicants had to put their case again. The record shows that there

was full disclosure to the Court as to the terms of the distribution arrangement and as to any

subsequent orders required. The rehearing supplanted the original hearing. If there were any

omissions in the presentation of the case for the Trustees in the original hearing, and we do not

say that there were, these were certainly remedied at the rehearing. We are unable to discern any

justification for the Court to determine that the application was not made in good conscience and

to decline to consider the argument on behalf of the appellants as to estoppel.

[62] There are certainly grounds to found an argument based on estoppel. There is the

agreement of the parties to the arrangement along with their consent to the variation of the trust

orders. Allied with this is the fact that some of the parties have changed their position through the

occupation of the Ngawapurua farm by TATB in keeping with the arrangement.

[63] The issue of consent of the parties is raised in the submissions on behalf of the appellants

and is considered in the next section of our discussion. As will become apparent from our

findings over that issue, we do not need to consider further the submissions on estoppel.

Consent

[64] At the rehearing on 6 August 2009 the general tenor among the parties to the distribution

arrangement was that they were still in agreement. The Edwards Whänau was not represented but

a written consent on their behalf signed by Mr Appleby was produced to the Court and

acknowledged by the Judge.31

[65] The consents of all parties for the original hearing were held on the Court file. Members

of the Edwards Whänau and Tatere children were present at the rehearing. It is not unreasonable

to have expected that anyone who changed their position to advise the Court, as did the Parish. It

was then given seven days by the Court to consult with TATB and confirm its approach to the

application. The consent of the Parish was duly given within the stipulated time. This meant that

at the closing of the hearing or within the additional time allowed to the Parish there were

grounds for the Court to find that there was sufficient support for the variation.

31 204 Napier MB 201 (204 NA 201)


[66] On 6 August 2009 the Court reserved its decision and gave to counsel for the trustees and

TATB 7 days to respond to submissions as to alienation and the position of the beneficiaries made

by counsel for the Emery Whänau. Mr Appleby was to advise the standing of his application to

remove the trustees and counsel for the Parish to contact TATB to work out management

arrangements and advise the Court as to its position. The Court then stated “At the conclusion of

that time I am then going to depending on what I get, write a decision or issue a decision.” In that

passage the Court left no doubt that the case would be closed on the receipt of the responses.

Those responses were all filed by 19 August 2009. Although the last response filed was five days

late it was anticipated, and we see no reason why the time could not be extended to allow its

acceptance.

[67] Notwithstanding that the decision was reserved counsel continued to file memoranda. A

full list is set out above at paragraphs [40] and [41]. Counsel for the Emery Whänau provided, on

28 August 2009, a response to the memorandum for the trustees filed on 19 August 2009. That

same day counsel for TATB also filed a memorandum seeking leave to reply to the Emery

Whänau memorandum. No action appears to have been taken by the Court on either of these

memoranda.

[68] On 22 December 2009 Chief Judge Isaac, sitting in chambers, issued a minute in respect

of an application by TATB and the Edwards Whänau seeking an injunction restricting the powers

of the trustees. At the end of the minute there was reference to the application for variation as

follows:32

Parties indicated at the teleconference that they also wished to progress the application for a variation of the trust orders for the Ngawapurua and Ruaroa trusts at this hearing. I noted that this application had been troubled from the start by the parties’ preference for making arrangements in relation to the ‘distribution agreement’ that the application for variation sought to effect that were not disclosed to the Court. Most recently a memorandum had been filed with Court stating that an agreement had been reached by all parties that would enable the matter to be resolved expeditiously. It has now emerged that whatever consensus was reached, or thought to have been reached, by the parties on this matter has since broken down, but that the Court was not informed of this development. I indicated to counsel that if they were able to come to the hearing in January with an agreement that had gained the written consent of all parties, then I would be happy to progress the matter at that stage. If, in the interim, all parties are able to give their written agreement to a partial variation of the trusts’ orders (in particular in relation to the Ngawapurua Trust, which Mr Milner suggested there was general agreement on), I would be happy to consider granting such a variation.

32 206 Napier MB 190 (206 NA 190)


[69] The next memorandum was filed on 10 March 2010 on behalf of TATB withdrawing its

consent. A further nine memoranda were filed between 4 June 2010 and 21 March 2012. The

outcome was that by virtue of these memoranda all beneficiaries of the trusts, except for the

Tatere children, withdrew their consents.

[70] In the decision of 29 March 2012 the Judge commented:33

On 6 August 2009 I reserved my decision and invited counsel to make further submissions on the alienation, the removal of trustees and also for TATB and the Parish to work out management arrangements relating to the variation.

[71] He then goes on in the decision to refer to the withdrawals of consent as if they and any

other material received up until the date of decision formed part of the proceedings. No

distinction was made between material provided or representations made at or after the hearing.

No leave was sought by the parties nor any procedure specified by the Court for the presentation

of further material following the close of the hearing, outside of the 7 day timeframe directed by

the Judge.

[72] The appellants claimed, in their grounds of appeal, that the Court failed to properly take

into account consents to the variation by the beneficiaries of the trusts. The position was that at

the completion of the hearing consent to the orders had been provided by all beneficiaries to the

trusts. The question is whether the Court should have taken into account the purported

subsequent withdrawals after the completion of the hearing.

Withdrawal of consent

[73] Mr Appleby sought to justify TATB’s withdrawal of consent by reference to changed

circumstances brought about by it becoming aware, after the hearing on 6 August 2009, of certain

management practices by the trustees:34

What caused Te Aute the concern was that the cashflow from the successful Ngawapurua farming operation is being used to fund the purchase of assets in the name of the partnership. They were effectively supporting the Rua Roa farm and if you look at the diagrams in my closing submissions you can see the contiguous nature of both the partnership property at Rua Roa as well as the trust property and it is trite to suggest that in some way there can be a division of that land without destroying the viability of the Rua Roa milking platform. It is one cohesive unit; there is even a tunnel under the road so

33 15 Täkitimu MB 7 (15 TKT 7) at [14] 34 (2012) Mäori Appellate Court MB 410 (2012 APPEAL 410)


joining the two blocks on either side. That was one of the concerns that had Te Aute saying, “Look, we do not think you are treating us right. We think we are being misled. We do not want to be part of this anymore.”

[74] These circumstances arose after the hearing. From a purely factual perspective we find it

difficult to understand how the management of the finances of the respective trusts could affect

the settlement. The arrangement was for TATB and the Parish to take over the tangible farming

assets of Ngawapurua without any debt. That had occurred in June 2008. All debts were to be

attributed to Rua Roa. TATB informed the Court that it had only agreed to the arrangement after

exercising due diligence and taking expert opinion. In addition, it will be remembered that TATB

had been in possession of the Ngawapurua farm for over 12 months when the rehearing was held.

TATB was aware that there were no surplus funds since it had paid $1 million to reduce the debt

of Rua Roa. Its counsel, Mr Appleby acknowledged to this Court that the only action required to

complete the distribution arrangement was the transfer of the Ngawapurua land to TATB and the

Parish.

[75] Mr Appleby’s submissions, which are cited at [73] above describe the Ngawapurua farm

as being a “successful” operation and state that the effect of the severance of the two farms was to

destroy “the viability of the Rua Roa milking platform.” As TATB and the Parish elected to take

the Ngawapurua farming assets as their share of the settlement, the fact that it was a successful

operation and its severance from Rua Roa would be detrimental to the latter would hardly seem

reason to attempt to repudiate the distribution arrangement.

[76] Mr Webster, for the Parish, also referred to the viability of the farms. He submitted that

the Parish was entitled at any time up to the making of an order to withdraw its consent for

whatever reason it chose. He pointed to the Court’s power to recall a judgment or to cancel or

vary an order which has been made subject to conditions. He added:35

On the basis of that logic it seems appropriate that at any time prior to the Court making a formal order in respect of this matter; a party could advise the Court of a change in circumstances.

[77] Counsel is not entirely correct in his submission. The power of the Court to amend an

order subject to a condition is limited to those instances where the condition has not been

satisfied. Without going into detail it could be said that the power to recall a judgment is only

35 (2012) Mäori Appellate Court MB 221 (2012 APPEAL 221)


exercised in exceptional circumstances. Additionally, there is normally a process to be followed

if either of these measures is to be taken. Section 66 of the Act provides:

(2) Proceedings before the Court shall be conducted in such a way as, in the opinion of the Judge conducting or presiding over the proceedings, will best avoid unnecessary formality. (3) Nothing in subsection (1) or subsection (2) shall derogate from any of the powers a Judge has to ensure that the proceedings of the Court are conducted in a proper manner.

[78] Rule 6.2 of the Mäori Land Court Rules 2011 includes –

(1) The Judge, or the presiding Judge, at a hearing of the Mäori Land Court, may, subject to section 66 of the Act, determine how the hearing is conducted and the order in which the parties are heard. (2) The Mäori Land Court must hear any of the following persons who appear and wished to be heard: (a) the parties: (b) any other person materially affected:

(c) any other person who has an interest in, or may be affected by, an application, including a person who has an interest or may be affected as a matter of tikanga Mäori.

[79] Section 66(3) gives priority to the conduct of the proceedings in a proper manner. Rule

6.2(2) ensures that the parties, anyone materially affected or who has an interest in or may be

affected, are given the opportunity to be heard. These are all fundamental elements of natural

justice. The Mäori Land Court is in no different position from any other judicial body regarding

the application of the principles of natural justice. For example, see In the Proprietors of Anaura,

Paerata v Lockwood.36 The High Court in Jennings v Scott also found to the same effect.37

[80] During a hearing parties are given the opportunity to present their cases and to comment

on and question the argument of other parties. They are also entitled to respond to any matters

raised by a Judge during the hearing. However, when the parties have completed their cases and

the hearing is complete the function of the Judge is to rule on the proceeding before the Court.

[81] In the present case the Court allowed further submissions or memoranda to be filed by

certain parties. However it seems clear that the Judge considered that the hearing was to be

completed with the filing of those documents. He announced that the decision was reserved and

that he would “write or issue a decision”. Once that stage is reached the Court’s function is solely

36 (1966) 30 Gisborne Appellate Court MB 44 (30 APGS 44) 37 (1984) HC Rotorua A183/79, 13 November 1984


to issue a decision. It is trite to observe that to accept or consider unsolicited material from some

parties, as happened in this case, is likely to be contrary to the principles of natural justice.

[82] That said, there may be instances where a Court could admit further evidence or

submissions. A Judge has a discretion, after a case has closed, to admit further evidence either for

his or her own satisfaction or where the interests of justice require it: Montego Motors Ltd v

Horn.38 In the present appeal the Court appears to have taken no formal steps to avail itself of

that discretion. Even if the Court were of its own motion inclined to permit amended pleadings or

further evidence, such a process would require notice to the affected parties to enable submissions

in response to the Court’s proposed action to be made before the receipt of any additional material

could be contemplated.39

[83] The authorities confirm that parties may seek leave to present further evidence after a

case has closed. The reasons for admitting further evidence need to be exceptional: Easton v

Cramp Developments Ltd;40 and Equiticorp Industries Group v Hawkins.41 The procedure

required is for the party seeking to adduce further evidence to seek leave of the Court upon notice

to other parties who must then be given the opportunity to consent or object and to provide

responses where necessary.

[84] Mr Webster submits that the Parish was entitled to withdraw its consent at any time prior

to a decision being made. We disagree. This would mean that the facts on which the Court is to

base a decision could never be regarded as stable. Furthermore, it would bring uncertainty to the

decision making process and parties could be prejudiced by the reserving of a decision.

[85] The responsibility for applying for leave to present further evidence rests with the parties.

Leave was never sought. The Court was not entitled to have regard to those memoranda or

submissions that were filed after the parties had closed their cases without going through a proper

process, and even then, only if exceptional reasons were present. Those documents should have

been removed from the Court file and returned to their authors. The decision should have been

based on the information available to the Court at the end of the hearing. Our finding means that

38 [1974] 2 NZLR 21 39 Rätahi v Mäori Land Court HC, New Plymouth, CIV-2007-443-689 12 May 2008 40 [1975] 1 NZLR 641 41 [1996] 2 NZLR 82


we have to reassess the merits of the application and the arguments presented against the making

of an order.42

Case for the Emery Whänau

[86] We observed earlier that when the case closed there was consensus among the parties to

the distribution arrangement to satisfy the Court as to sufficient support per s 244(3) of the Act.

The only opposition to the making of an order was that of the Emery Whänau. This group are

members of the preferred classes of alienees as defined in s 2 of the Act in respect of the trusts’

Mäori lands. It was on this basis that the Mäori Land Court granted them standing so as to order

a rehearing of the case and the decision made on 4 December 2007. They were children of Pearl

Emery, an adopted daughter of the settlor. Pearl Emery, now deceased, had been entitled to an

annuity from each trust. Other than that neither she nor her children were beneficiaries of either

trust.

[87] Mr Milner submitted on behalf of the Emery Whānau:

1. The terms of the trusts do not provide any authority for the Trustees to alienate any of the land held in trust in the manner agreed in the Distribution Arrangement. 2. If there was such authority the Trustees would be bound by Part 12 of the Act and would have to comply with the confirmation provisions of s 150A of the Act. 3. The Distribution Arrangement amounts to an alienation of land and as such a right of first refusal should have been given to the Emery Whänau as preferred classes of alienees. 4. On the basis of the principles of the Act, the Court should not interpret the alienation provisions in relation in relation to the Trustees application in such a way as facilitates alienation, especially when the alienation in question will sever one branch of the whänau, the Emery Whänau, from their täonga tuku iho, the land in the trust.

[88] The application before the Court was under s 244 of the Act, to vary both trusts by

bringing forward the date of distribution. This was originally sought so that the parties could

finalise the agreement. It was recognized that further orders of the Court would be needed to give

effect to the arrangement.

[89] At the rehearing Ms Dawson sought further orders to give effect to the arrangement under

s 241(1) by vesting the Ngawapurua land in TATB and the Parish as to a 4/5 and 1/5 share

respectively; and under s 244 varying the Rua Roa trust order by substituting for TATB and the

Parish as capital beneficiaries the nine discretionary beneficiaries.

42 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 and Kacem v

Bashir [2010] NZSC 112, [2011] 2 NZLR 1


[90] We turn now to the first of the submissions made by the Emery whänau, namely that there

is no authority in the trusts for the trustees to alienate land in the manner contemplated in the

Distribution Agreement. As we noted in the previous paragraph, the arrangement is to be effected

by orders of the Court. While the Trustees were involved in securing a settlement it is the

agreement of the two sets of beneficiaries that gives force to the arrangement and prompts any

“alienation”. The vesting of the Ngawapurua land in TATB and the Parish cannot be an issue as

they are the capital beneficiaries entitled to that land.

[91] The substitution of the capital beneficiaries for Rua Roa Trust is sought by an order under

s 244. Section 244(3)(b) requires that there be sufficient support among the beneficiaries. There

obviously is that support as the application is founded upon agreement among the beneficiaries.

[92] Of relevance to the Court’s consideration of the application for variation will be the

provisions of s 241(1) allowing the beneficiaries to make arrangements as to the persons in whom

trust lands are vested. If beneficiaries are able to come to an arrangement on termination of a

trust there would seem no reason why the Court should not likewise give effect to such an

arrangement during the term of a trust. The intent of the trustees was that the arrangement be

given effect by Court order as outlined above. This will not constitute “an alienation” by the

Trustees which requires compliance with s 150A of the Act as is proposed in the second of the

Emery whānau submissions.

[93] The third of the submissions for the Emery Whänau is that the arrangement constitutes an

alienation of land. If, as intended, the “alienation” is given effect by order of the Court it is not an

alienation within the meaning of the Act. Section 4 which defines alienation in ss 4(a) provides in

4(c)(ii) that an alienation does not include “a disposition of the kind described in paragraph (a)

that is effected by order of the Court.”

[94] The last of the Emery whänau submissions refers to the principles of the Act and suggests

that the Court should not make an order which will sever one branch of the whänau, the Emery

Whänau, from their täonga tuku iho, the land in the trust. We point out that that severance was

already made when the trusts were settled in 1968 and the Emery whänau were not included as

either income or capital beneficiaries.

[95] The application concerns an arrangement among the beneficiaries over the distribution of

trust assets. We must recognize the rights of those beneficiaries. While we might have sympathy


for the position of the Emery Whänau we cannot without good reason uphold their opposition to

the making of orders to give effect to the arrangement.

[96] The principles of the Act are a factor for the Court to take into account. If the

arrangement had been for outsiders to be substituted as beneficiaries in place of members of the

whänau we have no doubt that the Court would subject the arrangement to very close scrutiny

before coming to a decision. This is not the case with the present application. The capital

beneficiaries are not members of the preferred classes of alienees. Once the date of distribution

is reached they are, as of right, entitled to the lands of the trusts. They have negotiated an

arrangement which will see the nine discretionary beneficiaries substituted as beneficiaries of the

Rua Roa lands. There is no doubt that six of those beneficiaries are members of the preferred

classes of alienees.

[97] The arrangement is prompted in part as a settlement for the nine discretionary

beneficiaries because the trustees in pursuing a policy of land acquisition had managed the two

trusts in such a way that no distributions of income were made to them. Suggestions have been

made that they had no legitimate claim because payment was to be made at the discretion of the

Trustees. Had the trusts been managed in a way which balanced the interests of the capital and

discretionary beneficiaries there is no doubt that there would have been income available for

distribution from time to time. In such case the trustees were bound to apportion that income

among the discretionary beneficiaries. The income had to be distributed although the manner of

apportionment was at the discretion of the trustees. In those circumstances we consider that there

was a probable cause of action for those beneficiaries, and TATB and the Parish were justified in

taking that into account in assessing the merits of the distribution arrangement.

[98] The Emery Whänau are members of the preferred classes of alienees. The only way they

could be affected by the arrangement and the proposed orders was if their rights as members of

that class were prejudiced. Under the trusts TATB and the Parish were entitled as capital

beneficiaries, once the distribution date was reached, to have all the lands of the trusts vested in

them. It is only if they subsequently wish to alienate the Mäori land interests that the possibility

of the right of first refusal for the preferred classes of alienees might arise.

[99] If, instead of vesting the Rua Roa lands in TATB and the Parish, the entitlement is passed

to the nine discretionary beneficiaries, the Emery Whänau are in no different position. They

remain a transaction away from the prospect that a right of first refusal might arise. The

substitution of the Edwards Whänau and the Tatere children for TATB and the Parish does not


change the position that if the land is vested in them and they wish to alienate it the rights of the

preferred classes of alienees have to be considered. The rights of the Emery Whänau as members

of the preferred classes of alienees would not be adversely affected if the orders sought are

granted. We therefore see no reason arising out of their argument to convince us to decline to

make those orders.

Decision

[100] Given the discussion above we have determined that the Māori Land Court was in error in

that the hearing was concluded on 6 August 2009 and accordingly, once any further submissions

allowed by the Court were filed, it was required to make a decision on the evidence and

submissions before it. That evidence confirmed that all relevant parties agreed to the distribution

arrangement. The only opposition to the making of an order was from the Emery whānau and we

have found no reason arising out of their argument which might influence the Court to decline to

make an order.

[101] In conclusion, there was no reason for the Māori Land Court to decline to make an order

on the basis of an agreement by all the parties to the arrangement. We therefore allow the appeal.

A question arises as to what orders should be made by this Court and we consider that in the next

section of this judgment.

Nature of Orders

[102] The only application filed was for orders advancing the date of distribution. At the

hearing on 4 December 2007 Mr Gartrell emphasised that this was the only order sought. This

would give the parties the ability to finalise an arrangement as to the distribution of the trust

assets. As we have said previously, some further action and orders of the Court would then be

required to give effect to the arrangement. At the rehearing on 6 August 2009 both TATB and the

trustees requested the Court make further orders so as to give effect to the arrangement.

[103] A letter dated 3 March 2008 from Mr Panhuys to Mr Gartrell for the trustees records the

desire of TATB to have orders giving effect to the distribution arrangement. Matters moved on to

the rehearing on 6 August 2009 without any action to seek amendment to the application so as to

implement the distribution arrangement. The application before the Court at the hearing remained

as an application to bring forward the date of distribution. In a written submission dated 23 July


2009 Ms Dawson for the trustees outlined the distribution agreement. Later she continued

“Counsel understands that the agreement in principle is still acceptable to the capital

beneficiaries. The parties therefore need to agree on the process to achieve the required agreed

result if Court ratification is given.”

[104] Mr van Panhuys for TATB filed a submission dated 5 August 2009. He outlined the

distribution agreement saying that there should be an immediate distribution of the Ngawapurua

trust property to the capital beneficiaries and that the trust in relation to the Rua Roa property

should be varied to provide for the capital of the property to vest in the income beneficiaries. He

concluded by saying “The Court is accordingly requested to make consent orders on the above

terms.”

[105] At the hearing Ms Dawson requested the Court’s assistance to give the arrangement full

effect:43

The trustees therefore require the assistance of the Court if the arrangement is to be given full force and effect. We understand that the intention was to complete this by separate application once the date of distribution had been set. However given that the court or respective counsels have expanded the realms of the original application were (sic) advancing the date of distribution, we request that if this is how this hearing transpires that these considerations are taken into account.

[106] Mr van Panhuys supported Ms Dawson’s request. The minutes record the following

exchanges:44

Court: So I can make it absolutely clear, bring the date of distribution forward and also varying the persons on whom distribution is made. Ms Dawson: Yes. Court: So the TATB and the Anglican Parish receive…. Mr van Panhuys: I would say Sir that you are correct that we are in accord on it. Court: Ngawapurua Trust and the income beneficiaries receive the Rua Roa trust assets and the TATB and the Anglican Parish are divided 4/5ths & 1/5th, is that right? Mr van Panhuys: Of Ngawapurua. Court: Yes, the 4/5ths & 1/5th. Mr van Panhuys: Correct. Ms Dawson: Correct Sir. Court: All right.

[107] Although the Court did not say as much we discern that it left little doubt that it would

consider making the appropriate orders when issuing its decision. The precise nature of the

43 204 Napier MB 189 (204 NA 189) 44 204 Napier MB 191-192 (204 NA 191-192)


orders sought was outlined in the further submissions filed by Ms Dawson on 19 August 2009 in

response to the Court’s invitation at the end of the hearing.

[108] It is trite to observe that the Court is a procedural body. There are procedures for filing

and hearing an application. Where an applicant seeks a different outcome from that applied for

normally a further application or an amended application is filed or leave is sought to amend the

application. In that way both the Court and other parties are kept aware as to the nature of the

order which is sought.

[109] In the present case no such process has been followed and therefore we must deal with

the situation as it was in August 2009. There was simply a request based on the consent of all the

parties that the Court make orders to give effect to the arrangement. An order is sought vesting

the Ngawapurua lands in the capital beneficiaries. Details of those lands have been supplied

during the Māori Land Court proceedings.

[110] Section 37(3) of the Act empowers the Court to make orders other than those specified in

the application:

37 Exercise of jurisdiction, generally … (3) In the course of the proceedings on any application, the Court may, subject to the

rules of Court, without further application, and upon such terms as to notice to parties and otherwise as the Court thinks fit, proceeds to exercise any other part of its jurisdiction the exercise of which in those proceedings the Court considers necessary or desirable.

[111] This provision is not lightly used. Consideration has to be given to notice and any other

prerequisites set by the Act or the Rules for the particular application. It is generally used when

the type of application flows on from the proceedings before the Court and the parties are the

same. In any event, we are mindful of the time this case has been before the Court. There is no

doubt as to the orders that are required. We see no reason why we should not exercise our

discretion to make the appropriate orders and settle the entitlement to the various lands.

[112] Counsel for TATB advised that the Edwards whänau do not wish to press for a share in

the Rua Roa lands and would leave the entitlement to those lands in TATB and the Parish as the

settlor intended under the trust order. That decision was made after the case was closed and in the

light of the circumstances prevailing at that time. Those circumstances included the purported

withdrawal of consent by TATB. We have determined that the Edwards whänau is entitled to a


share in these lands under the arrangement. We cannot presume from a stance taken after the

hearing that the Edwards Whänau would not wish to take up the entitlement arising from this

appeal.

[113] We therefore propose to make an order varying the Rua Roa trust order in terms of the

distribution arrangement so as to replace the existing capital beneficiaries with the Tatere children

and the Edwards Whänau. If the Edwards Whänau do not wish to take up their entitlement they

will need to take steps to dispose of some or all of it to other members of the whänau or the TATB

and the Parish, as they may decide. That would require another application for a variation of the

trust to change the beneficiaries in accordance with their wishes. In the light of this decision that

should be a fairly simple application.

Delay

[114] The application for a variation of the trusts was heard on 4 December 2007 and an order

made at the end of the hearing. A rehearing was subsequently ordered and heard on 6 August

2009. The decision was reserved and on the same day an application to remove the trustees was

filed.

[115] Without the complication factor of the removal application, in the normal course of

events, a decision should have issued within a reasonable time. However, there were changes to

both counsel for some of the parties and in the membership of TATB, all of which contributed to

the circumstances that the Court had to deal with. In the event, the judgment was not issued until

29 March 2012.45 In the interim the application for removal of trustees had been heard and a

decision was issued on 4 April 2012, a few days after the variation decision.46

[116] The effect of the delay was that it left the parties in limbo while the removal application

was being heard. Had an early decision been made on the variation proceedings it may have

simplified the issues on the removal application and some of the parties may have changed their

approach. The crossover between the two applications would have been reduced, along with the

complexity of the issues on appeal.

45 15 Täkitimu MB 4 (15 TKT 4) 46 15 Täkitimu MB 204 (15 TKT 204)


Orders

[117] The appeal is allowed. The Court issues orders per s 56(1) (b) and (f) of Te Ture Whenua

Māori Act 1993 annulling the order of the Mäori Land Court made on 29 March 2012 dismissing

the application, and substituting therefore the orders set out in the following paragraphs.

[118] An order under s 241(1) of the Act vesting the Ngawapurua lands in TATB and the

Waiapu Board of Diocesan Trustees as to a 4/5 and 1/5 share in common respectively and

terminating the Ngawapurua trust in respect of those lands. The legal description of those lands,

which were supplied by the solicitors for the trustees and appear in the record at folio 1143 et seq,

in accordance with the Land Transfer title records is:

(a) 84.3896ha being part Mangatāinoka No 1 B C No 2 C No 1 Block and part

Mangatāinoka No 1 B C No 2 C No 1 Block and Mangatāinoka No 1 B C No 2 C

No 1 Block and Mangatāinoka No 1 B C No 2 C No 1 Block and part

Mangatāinoka No 1 B C No 2 C No 1 Block as recorded in Identifier WN 370676

(b) 4,047 square metres being Mangatāinoka No 1 B C No 2 C 3 Block as recorded

in Identifier WN 222/82

(c) 5.3400 ha being Lot 3 Deposited Plan 16586 as recorded in Identifier HBJ 4/1360

(d) Section 41A Block 1 Makuri Survey District as recorded in Identifier WN

52D/523.

[119] An order pursuant to section 244 of the Act varying the Rua Roa trust order to substitute

for the existing capital beneficiaries the nine discretionary beneficiaries, namely Tau Anthony

Hōhepa Edwards, Belinda Puanani Edwards, Donna Mahue Marsh, Michell Awhina Edwards,

Hester Vanessa Edwards, Josephine Mariana Henderson, Richard Tatere, Brenda Mei Tatere and

Denise Casey in common as to a 1/9th share each.

Costs

[120] This is the second of two appeals involving largely the same parties. In our first decision

we declined to order costs as the appellants and the respondents were each successful once. It

therefore follows that we should adopt the same approach here. There is no order as to costs.


This Judgment will be pronounced in open Court at the next sitting of the Māori Appellate Court.

L R Harvey (Presiding) G D Carter S Te A Milroy JUDGE JUDGE JUDGE

Documents

IN THE MĀORI APPELLATE COURT OF NEW ZEALAND TAKITIMU ... · An appeal by Hōhepa Mei Tatere and Te Aroha Edwards, against orders of the Māori Land Court made on 29 March 2012 at