78 Ruatoria MB 55

IN THE MÄORI LAND COURT

OF NEW ZEALAND

TAIRAWHITI DISTRICT

A20050005763

A20050005764

A20050005766

A20050005767

A20050005768

UNDER Section 240, Te Ture Whenua Mäori Act

1993

IN THE MATTER OF Rongohaere Marae

BETWEEN LUKE DONNELLY

Applicant

AND NICOLA TUALA & ORS

Respondents

Hearing: 17 November 2006, 169 Gisborne MB 201-243

8 June 2006, 74 Ruatoria MB 45-105

25 May 2006, 73 Ruatoria MB 102-103

10 May 2006, 73 Ruatoria MB 127-188

13 September 2005, 70 Ruatoria MB 219-223

12 September 2005, 71 Ruatoria MB 63-78

Appearances: Mr R Barber, counsel for trustees

Mr L Donnelly, in person

Judgment: 30 November 2007

RESERVED JUDGMENT OF JUDGE L R HARVEY

Introduction

[1] Luke Donnelly has applied for the removal of four of his fellow trustees from

Rongohaere Marae Māori reservation. He claims that these particular trustees have

acted in breach of trust by committing forgery, have abused their positions and have

misled the beneficiaries over applications for funding to the New Zealand Lotteries

Commission. He contends that the trustees are therefore unfit to hold office and

should be removed by the Court.

78 Ruatoria MB 56

[2] In response, the affected trustees seek the removal of Mr Donnelly. They

argue that it is he who is unfit to hold the office of trustee. They claim that he is

belligerent, intimidating and aggressive in his conduct toward both his fellow trustees

and the beneficiaries. They argue that Mr Donnelly has assumed the role of chairman

of the marae improperly and without authority has closed various marae operating

accounts with local suppliers. He has, it was contended, generally acted contrary to

the wishes of the beneficiaries and the majority of the trustees.

[3] The trustees also argue that Mr Donnelly refuses to accept what they claim is

the view of the majority of the beneficiaries in aligning Rongohaere Marae to Te

Rūnanga o Ngāti Porou. Mr Donnelly, they say, supports Uepohatu instead and has

caused tension in the relationship between the marae beneficiaries, the rūnanga and Te

Ohu Kai Moana.

[4] The issue for determination is simply whether the requirements of section 240

of Te Ture Whenua Māori Act 1993 have been satisfied and consequently whom if

any of the trustees should be removed. At the outset I note the terms of regulation

3(h) of the Māori Reservation Regulations 1994 which provides, in effect, that any

person removed by order of the Court will no longer be eligible for appointment as a

trustee.

Background

[5] By gazette notice dated 30 March 1949 Ahiateatua A4, then comprising 3

acres 3 roods and 16 perches, was set aside per section 5 of the Māori Purposes Act

1937 as a Māori reservation for the common use of the owners thereof as a marae and

meeting place. It is important to note that this reservation has been set aside for the

owners and not any whänau or hapū group. This is likely to be relevant to the future

conduct of beneficiaries’ hui.

[6] The title order for the block is dated 8 March 1926, 93 Waiapu MB 258 and

the status is Māori freehold land. As at 22 August 2007 there were 98 owners

recorded holding 30 shares.

78 Ruatoria MB 57

[7] The trustees over the reservation are recorded as Gary Walker, Josephine

Tangaere, Luke Donnelly, Nicola Tuala, Ramari Pepere, Riria Keelan and

Whanaupani Pewahairangi and they were appointed on 7 March 2000, 57 Ruatoria

MB 75. According to the trustees Ramari Pepere is deceased and so the number of

remaining trustees is six.

Meeting of beneficiaries: 3 July 2005

[8] A properly convened and court supervised hui of the beneficiaries took place

at Rongohaere Marae on 3 July 2005. The agenda for the meeting was approved by

Her Honour Judge Wickliffe (as she then was) in her directions of 20 May and 20

June 2005. The subsequent report of the Registrar about the hui makes the following

points:

(a) the meeting was notified in the Gisborne Herald on 12 and 16 July 2005. The

trustees were notified by letter on 11 July 2005. Notice for the meeting

specified that participation in the hui would be limited to owners and direct

descendants of deceased owners (but excluding direct descendants who have a

living parent or grandparent who is a direct descendant of the deceased owner);

(b) 41 persons signed the register of attendees but it was estimated that some 80-90

people were present. All six remaining trustees attended the hui;

(c) the agenda was fixed at three items: discussion of matters relating to the

administration of the marae, whether there should be an election of trustees and

if so that an election take place;

(d) a resolution that the hui “supports the retention of the four trustees whose

removal is sought” was carried 27 in favour with 3 against and a single

abstention. With that result it was decided not to proceed with the third item on

the agenda; and

(e) the marae committee minute book was placed into the custody of the Registrar.

78 Ruatoria MB 58

[9] The Registrar recommended that the applications be set down for a judicial

conference and hearing as soon as possible at Ruatoria and that a day be set aside for

that purpose. The Registrar, Deputy Registrar and the case manager signed the report.

Judicial conference and directions: 12-13 September 2005

[10] A judicial conference was convened on the 12 September 2005 to consider Mr

Donnelly’s applications. At that hui Mr Donnelly sought an adjournment of the

proceedings to fully prepare his case and to lay a complaint with the Police over

claims of forgery against the trustees. Having heard from the parties, I adjourned the

conference to issue written directions.

[11] I then directed that the four removal applications be adjourned until the

outcome of the complaint filed by Mr Donnelly was known. Once that occurred the

applications would be reactivated and the filing of documents would follow within the

timeframes outlined. I noted Josephine Tangihaere was appointed treasurer by the

trustees and that all trustees would become signatories to the marae accounts. Finally,

I directed that the trustees were to continue to hold office until further order of the

Court.

Hearing: 10-11 May 2006

[12] Following advice on the outcome of the Police inquiry, a hearing was set down

for 10 May 2006. Mr Donnelly again asked for an adjournment on the grounds that

the inquiry was not fully completed. He claimed that Mr Barber had sent a letter to

the police that had misled them and that a forensic expert would be needed to

determine the claim of forgery. Having heard from two witnesses in regard to the

claim of forgery, I subsequently adjourned the hearing after a claim of bias by Mr

Donnelly against me.

[13] I reconvened the hearing on 11 May 2006 to discuss both the bias claim and

how the case should proceed. Mr Donnelly withdrew his claim of bias and apologised

for in his words “…a silly use of the word, I didn’t intend it as it was, it was a chuck

78 Ruatoria MB 59

away line…and I’d like to withdraw that unreservedly.” I accepted the apology and

the hearing continued.

Directions: 25 May 2006

[14] Following the adjournment I considered an application in chambers asking for

directions as to the summonsing of witnesses and seeking an order for payment of

witness fees and expenses. I directed the Deputy Registrar per section 69(2) of the

Act to summons the witness and ordered payment per section 98(9)(b) from the

Special Aid Fund of the fees and allowances for each person summonsed.

Hearings: 8 June 2006 and 17 November 2006

[15] Following the issue of the summonses, on 25 May 2006 a hearing was held on

the 8 June 2006 to hear from those witnesses. Having heard from those individuals I

adjourned the hearing and made directions as to filing and serving of closing

submissions. The final hearing of the case occurred at Gisborne on 17 November

2006.

The case for Luke Donnelly

[16] The evidence and submissions for Mr Donnelly can be summarised as follows:

(a) he is the legitimate chairperson of the Rongohaere Marae Trust per regulation

17 of the Mäori Reservation Regulations 1994 after a hui involving himself

and the other trustees confirmed him in that position;

(b) all subsequent trustee meetings, particularly those called by the four trustees

are therefore invalid because he was not duly notified or present;

(c) the four trustees must be removed because of their failure to act satisfactorily.

They purported to make decisions when they had no mandate and allowed

names and signatures to be put on documents when they knew such actions

were improper and deceitful. Further, they failed to properly notify him of

78 Ruatoria MB 60

meetings and acted in an unacceptable manner that compromised the proper

operation of the trust; and

(d) it would be unjust for the Court to act on the cross application for his dismissal

as Mr Donnelly was just acting as a responsible Trustee.

[17] Mr Donnelly stressed that he was not acting out of any ill will or malice

toward the four trustees. For him it was a question of basic honesty and competence.

He argued that the four trustees were both dishonest and incompetent and for those

reasons must be removed.

The case for the trustees

[18] Mr Barber submitted:

(a) Mr Donnelly was not the legitimate chairperson as the relevant meeting was

inquorate. He did not possess the support of a sufficient number of trustees to

secure the office of chairperson for himself. Therefore all actions purportedly

carried out by him in that guise were invalid and served only to confuse the

beneficiaries and wider community as to the proper mandate of the trustees of

the marae;

(b) Mr Donnelly has failed to show that the four trustees performed their duties

unsatisfactorily sufficient to justify their removal. His allegations of forgery

were wrong and remained unproven. They had caused distress and

humiliation to the trustees and had destroyed any prospect of a working

relationship with them;

(c) rather than the trustees being the subject of a removal applications, it is Mr

Donnelly who should be removed. He refuses to work as a team player, he

intimidates the other trustees and he does not have the support of the

beneficiaries; and

(d) his efforts to interfere with the mandate of Rongohaere Marae and Te Rünanga

o Ngäti Porou over fisheries matters and his support for Uepohatu

78 Ruatoria MB 61

demonstrated an inability to put the interests of the beneficiaries as a whole

before his own interests and this was contrary to the duties of a trustee.

[19] Counsel implored the Court to dismiss the four applications for removal as

there was simply no basis to Mr Donnelly’s claims. He refuses to accept the will of

the beneficiaries and the trustees and has demonstrated a profound misunderstanding

and ignorance of the duties of a trustee. Mr Donnelly, according to counsel, had

proven himself to be belligerent, uncooperative and a wholly negative influence on

the trust. He was thus unfit to serve in the role of trustee. Consequently, the only

sensible outcome was for the Court to order his removal.

The Law

[20] Sections 227, 236 and 237 of the Act provide:

227 Trustees may act by majority

(1) Subject to any express provision in the trust order and except as provided in

subsections (2) and (3) of this section, in any case where there are 3 or more

responsible trustees of a trust constituted under this Part of this Act, a majority of the

trustees shall have sufficient authority to exercise any powers conferred on the

trustees.

(2) Subject to subsection (3) of this section, every instrument to be registered under

the Land Transfer Act 1952 shall be executed by all the trustees.

(3) Where the Court has, under section 237 of this Act, made an order or given

directions in relation to the execution of any instrument (including an instrument to be

registered under the Land Transfer Act 1952) that instrument shall be executed in

accordance with that order or those directions, as the case may require, and the

Registrar shall send a copy of every such order and of all such directions to the

District Land Registrar or the Registrar of Deeds for registration against the title to

that land under the Land Transfer Act 1952 or (as the case may require) the Deeds

Registration Act 1908.

(4) The District Land Registrar or the Registrar of Deeds shall register the same

accordingly.

(5) Notwithstanding anything in section 99 of the Land Transfer Act 1952, the

production of the outstanding instrument of title shall not be necessary for the

purposes of any such registration under that Act.

(6) Where any trustee dissents in writing from the majority decision of the trustees before the decision is implemented, that trustee shall be absolved from any

personal liability arising out of the implementation of that decision. (Emphasis

added)

78 Ruatoria MB 62

236 Application of sections 237 to 245

(1) Subject to subsection (2) of this section, sections 237 to 245 of this Act shall

apply to the following trusts:

(a) Every trust constituted under this Part of this Act:

(b) Every other trust constituted in respect of any Maori land:

(c) Every other trust constituted in respect of any General land owned by Maori.

(2) Nothing in sections 237 to 245 of this Act applies to any trust created by section

250(4) of this Act. (Emphasis added)

237 Jurisdiction of Court generally

(1) Subject to the express provisions of this Part of this Act, in respect of any trust

to which this [Part] applies, the Maori Land Court shall have and may exercise 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.

(2) Nothing in subsection (1) of this section shall limit or affect the jurisdiction of

the High Court. (Emphasis added)

[21] Section 240 of the Act states:

“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 satisfied –

(a) that the trustee has failed to carry out the duties of a trustee satisfactorily; or

(b) because of lack of competence or prolonged absence, the trustee is or will be incapable of carrying out those duties satisfactorily.”

[22] Regulation 17 of the Mäori Reservations Regulations 1994 states:

“17 Provisions applicable where trustees are not body corporate

Where the trustees are other than a body corporate as sole trustee, then, subject to any

order of the Court,—

(a) The trustees shall convene and hold a first meeting of trustees within 30 days of

their appointment:

(b) The trustees shall otherwise meet for the dispatch of business at such times and

places as the trustees consider appropriate:

(c) No business shall be transacted at any meeting of the trustees unless a quorum is

present:

(d) Where the number of trustees is 2 or 3, 2 shall constitute a quorum and, where the

number of trustees is more than 3, a quorum shall consist of at least one-half in

number of the trustees:

(e) The trustees shall at their first meeting appoint one of their number to act as

chairperson and that person shall remain in office until such time as the trustees

appoint a new chairperson:

78 Ruatoria MB 63

(f) If the trustees are unable to agree as to the appointment of a chairperson, or for

any other reason fail to appoint a chairperson, the Court may appoint a chairperson to

hold office for a specified term or until a new chairperson is appointed by the trustees

or the Court:

(g) All questions coming before the trustees at any meeting shall be decided by a

majority of the votes of the trustees present at the meeting:

(h) At every meeting the chairperson, or, in his or her absence, some other trustee

chosen by those present, shall preside; and the chairperson or presiding trustee shall

have a deliberative vote and also, in the event of an equality of votes on any matter, a

casting vote:

(i) All proceedings and resolutions of the trustees, and proceedings of a meeting

convened under regulation 14 or regulation 19 of these regulations, shall be recorded

in a minute book to be kept by the trustees for that purpose.”

[23] The leading authorities of this and the Māori Appellate Court in terms of

removal of trustees are in re: Poripori Farm A Trust – Ellis Faulkner (1996) 57

Tauranga MB 7 and in re: Matata 930 Rangitihi Marae - Pryor v Perenara (2003) 10

Waiariki Appellate MB 233 (10AP 233). The principles enunciated in those decisions

are adopted here.

Discussion

[24] The conduct of the trustees at meetings of beneficiaries and trustee meetings,

as well as during the Court sittings must give the beneficiaries cause for concern.

Allegations of fraud, forgery and incompetence are unlikely to create an atmosphere

of collegiality amongst the trustees. Similarly, the calling of alternate meetings by the

two factions can only serve to fuel mistrust and create unnecessary confusion amongst

the beneficiaries and the wider community as to which group retains the privilege of

acting as the custodians of the marae. That said, the Court supervised meeting of the

beneficiaries produced a clear result in support of the four trustees.

[25] Even during the hearings, on several occasions proceedings had to be called to

order as those present in the gallery interrupted in response to statements made by the

parties, particularly Mr Donnelly. I was relieved not to have witnessed the spectacle

of fists being brandished in open Court from the gallery toward Mr Donnelly, who I

was informed, appeared content to respond to such challenge in like kind with an

invitation to remove to the precincts of the foyer for that purpose. The short point is

78 Ruatoria MB 64

that friction and hostility continue to seriously affect the operation of this trust. That

is not a situation either the beneficiaries or the Court can countenance.

[26] The authorities underscore that trustees are not lightly removed unless there is

evidence of abuse, failure or malfeasance and that there are no positive defences. In

the Poripori decision when assessing the trustee’s performance the judge found that it

was sufficiently wanting to justify removal. That position was supported by the fact

that the beneficial owners at general meetings endorsed the actions of the majority of

the trustees to have the recalcitrant trustee removed. In considering section 222 of the

Act, that a trustee must be broadly acceptable to the beneficiaries, the judge found in

light of those facts, and coupled with his performance, the trustee concerned should be

removed.

Quorum and majority

[27] It is trite law that trustees are appointed and removed by the Court. When a

trustee resigns or is deceased, the records of the Court can only be amended by order

of a judge. Until that occurs then on the face of the Court’s record, those listed are for

all intents and purposes the trustees of the land with all of the rights, obligations and

powers of an owner.

[28] It is commonly understood that trustees of Mäori land – and contrary to

general trust law principles - may act by majority: in re: Tauhara Middle 15 Trust –

Wall v Karaitiana (2007) 85 Taupo MB 225. Section 227 of the Act provides a

statutory exception to the general principles that trustees are usually required to act

with unanimity. Indeed, it is rare for a trust order to provide that trustees must act

unanimously and given the nature of trusts over Mäori land and the practicalities that

would arise, that is hardly surprising.

[29] In general terms, decisions of trustees of Mäori reservations need not be

unanimous. Indeed, such a requirement would impose a standard that is quite

unrealistic. In any event reg 17(g) of the Mäori Reservations Regulations 1994

expressly enables trustees to act by majority. This is repeated in reg 18 regarding

documents, which need only be executed by a majority, where such a decision is

78 Ruatoria MB 65

supported by a resolution of trustees. This is consistent with the underlying statutory

basis for trustees over Mäori land acting by majority as set out in section 227.

[30] Mr Donnelly contended that section 227 does not apply to a Mäori reservation

trust as that provision only applies to trusts established under Part 12. He submitted

that the relevant provision is reg 17(d) and (g), which provide for a quorum of “at

least one half in number of the trustees” and decisions by “a majority of the votes of

the trustees present at the meeting”. This argument was intended to support his

submission that three trustees were sufficient, being half of the surviving trustees, to

elect him chairperson of the trustees. Mr Barber argues such a general provision as

section 227 must have application to all trusts over Mäori land and he referred to

sections 236 and 237 in this context. I agree with Mr Barber. When read together,

sections 236 and 237 provide this Court with all the powers of the High Court in

respect of trusts over any Mäori land. In any event, Mr Donnelly also agrees that

trustees can act by majority per reg 17(d) and (g). The real issue is the definition of

“majority”.

[31] As I have foreshadowed, there are six trustees as the seventh Ramari Pepere, is

now deceased. I accept the submission of Mr Barber that until there were orders

reducing the number of trustees by one or appointing replacement trustees, the

number of trustees stood at seven and the quorum for a meeting of trustees to transact

business in the normal way would have been four. It could not have been anything

else. On the passing of Mrs Pepere it was then incumbent upon the trustees to file an

application with the Court to reduce the number of trustees by one or to seek

directions. The trustees took neither step and instead each faction purported to act as

if they possessed the necessary quorum to transact business on behalf of the trust.

They were wrong.

[32] It is understandable that the remaining six trustees would adopt a practical

approach to ensure the business of the trust and the marae continued without

interruption. But even then, with only six trustees, the quorum will be four. Put

another way, where there are even numbers of trustees the quorum cannot be one half

of that number. In this case with six trustees the argument was put that the quorum

would be three. With respect, that would produce absurd results, notwithstanding

78 Ruatoria MB 66

regulation 17. Each faction of three trustees could conceivably hold their own

meetings and claim to pass resolutions effecting the trust’s business. Such resolutions

may be contrary. That is of course what has happened: two factions of equal numbers

have acted as if they had the authority. That is why with an even number of trustees-

like six in this case-the quorum will be four. The late O’Regan J’s obiter that the

rules of court are the servants of justice, not the masters, has a practical resonance in

this case. The regulations must be applied to give a practical result.

[33] In the context of Māori trusts, where the trust instrument is silent as to specific

procedures, then the orthodox rules of meeting conduct should apply. So even if a

chairperson possessed a casting vote that vote must be cast in favour of the status quo.

Mr Donnelly’s purported endorsement of himself as chairperson when there was

already someone in that role cannot be valid. Likewise, any decisions made by the

trustees led by Ms Tuala without a quorum will also be invalid. Despite the

experience of the trustees the simple step of seeking directions from the Court appears

to have escaped them all. Accordingly, I find that the two factions of trustees have

not acted in accordance with their duties by holding separate hui without an

appropriate majority. Unless four trustees were present when resolutions were passed

and decisions made then any such meeting will fail for want of a quorum.

Consequently, I cannot see how their decisions were valid.

Forgery

[34] Mr Donnelly alleges his fellow trustees and those associated with them

conspired to defraud the Lotteries Commission by supposedly forging the signature of

Mr Butler, the Chairman of the marae committee at that time. He lodged a complaint

with the Police but they decided to take no steps following receipt of correspondence

from Mr Barber. A Detective Thomas of the Gisborne Police even attended Court and

gave evidence to such effect.

[35] On oath Mr Butler confirmed he had given authority for his name to be signed

on the application forms, 73 Ruatoria MB 151-152. Mr Donnelly did not accept Mr

Butler’s evidence or the submissions of Mr Barber on the point. I did, and said so at

78 Ruatoria MB 67

the hearing on 10 May 2006, making it plain that the allegations of forgery could not

be sustained in light of Mr Butler’s evidence, 73 Ruatoria 153 and 166:

“Court: One moment Mr Donnelly if Mr Butler in answer to questions from Mr Barber has said he gave authority for Tawhai Nuku to sign his name on his behalf. A forgery is when

your name is signed without your knowledge. You can’t use that word…

…Now this forgery thing you know I have to tell you Mr Donnelly that has no legs, that is not going to go anywhere. We’ve heard Mr Butler say he gave his knowledge and consent to the

signing on his behalf…”

[36] At the November 2006 hearing, despite my repeated reference to the fact that I

had accepted Mr Butler’s evidence, Mr Donnelly persisted with his allegation that, in

effect, Mr Butler had made that story up after being found out, 169 Gisborne MB 209;

“Court: The gentleman in question he came forth and made it very plain that he had

given his permission for his name to be signed.

L Donnelly: Well Your Honour that there is his word. It is quite easy to say that after

the fact that you have been caught.

Court: He was on oath, he was sworn and I accepted his evidence.

L Donnelly: Your Honour I don’t accept that that is the truth, for the mere fact that

the minutes again record that he had already been under questioning at a meeting in

either October of November, when Ngaire Keelan put it to him, it is recorded in the

minutes. Ngaire Keelan asked him if it was his signature, and he told her yes. But he

knew that he wasn’t even there to make that.

Court: But the key point is he has sworn on oath before me that he gave his consent.

Now you are saying that you do no accept that what he is saying is truthful.

L Donnelly: I don’t accept that that is truthful. The other point about that is that there

seemed to be a denial right up until the last minute, and then counsel for the

respondents finally came forward at questioning to Malcolm Thomas… if this was a

genuine case why wasn’t this raised anytime through that six months, and why did it

not appear in the minutes. Throughout the minutes he said that was his signature and

he signed it. In the minutes of October, November, Ngaire Keelan does put the

question to him. So did Gary Walker. They both put the question to him, and he is

still said that yes it is. With that Your Honour I can’t possibly accept.

Court: I understand you to say Mr Donnelly is that you consider the timing of Mr

Butler’s admission convenient.

L Donnelly: Yes Sir.

Court: What I am saying to you now is that he stood in the witness box, he swore on

the bible before me that he had given his consent. What he may or may not have said

in the hui, I don’t know I wasn’t present. What I am telling you now is that before the

Court on oath with a bible in his had he swore, he gave his consent. I have accepted

that.”

78 Ruatoria MB 68

[37] Having reviewed the minutes of the hearing, again I accept Mr Butler’s

explanation but on reflection, make the following observation: if indeed that is what

transpired I would have expected the trustees to proffer that explanation at the earliest

opportunity. They did not do so. That position seems inexplicable.

[38] In any case, I have accepted Mr Butler’s testimony given on oath and his

explanation. I find nothing in the questioning of Mr Butler by Mr Donnelly to

displace that conclusion. In light of this, any allegation of forgery, in the context of a

trustee’s conduct (rather than in any criminal sense,) cannot be sustained. As that was

the principal ground upon which Mr Donnelly’s removal application was based and

unless the other grounds pleaded pass muster, the application should be dismissed.

Section 240 – removal of trustees

[39] Turning to alternative the grounds contended, Mr Donnelly emphasises the

“incompetence” of the trustees in the context of section 240(a) of the Act, 169

Gisborne MB 210:

“…a trustee, Whanaupani Pewhairangi, in particular, signing and witnessing on the

same document, knowing full well that the names of the others on there are not

trustees. That constitutes a failure to carry out… that Sir is grounds for removal.

Because that there impinges on honesty, it brings into question the honesty and the

fitness to be trustee. We are not talking about a few hundred dollars this is large

amounts of money.”

[40] The essence of Mr Donnelly’s case against his four fellow trustees can be

found at 169 Gisborne MB 215:

“…these trustees have failed to act satisfactorily as trustees. They delegated and gave

away their powers to the marae committee in an unacceptable manner. This has

effectively excluded the proper operation of the trust, it puts the trustees at risk as

well as making them fail in their duties to be responsible, for the asset the marae.

Any potential liabilities like this grant which they may acquire. When confronted

with these issues the trustees simply failed to turn up to the meetings requested by

myself, and advised others not to bother to attend. They continued on their merry

way. It is clear that there is some support in the Court for the organised meeting for

the trustees to continue. No doubt the Court will take that into account when making

the decision. For my part I consider that this does not absolve them from being

irresponsible as trustees, and in that respect to be held to account. Concerns over my

performance have arisen in a tit for tat manner as well as a result of these applications,

I do not accept allegations of intimidation. It is clear from the manner in which the

Court has proceeded that there are two sides to every story, and that there is much

provocation towards me… In my submission Sir it would be unjust for the Court to

act on the other trustees cross application for their removal. I have acted as a

responsible trustee and have simply been seeking proper administration. Whilst the

78 Ruatoria MB 69

other trustees may have some difficulty with me that’s because I have called them to

account… In the circumstances I believe the appropriate course is for the Court to

remove the four trustees.”

[41] Mr Donnelly asserted that there was ample evidence before the Court to satisfy

the provisions of section 240. He further argued that there were no defences available

to the four trustees as nothing could justify from his point of view their incompetence

and failing. He again stressed that the cross application seeking his removal was

simply a reaction to his proceedings and that the trustees had been quite content to

take no steps against him until he had brought them to account with his removal

application.

[42] Mr Barber countered that if anyone must be removed, it ought to be Mr

Donnelly. It was argued that Mr Donnelly was unfit to hold the office of trustee,

refused to act as a team player and was simply pursuing his own personal political

agendas in the face of considerable opposition from the beneficiaries. Those same

beneficiaries had endorsed the four trustees almost unanimously at the Court

convened hui.

Trustees’ performance

[43] Turning then to the performance of all the current trustees of this Mäori

reservation. It was evident to me that the trustees all failed to appreciate that they

were responsible for the financial affairs of the reservation trust, not the marae

committee. Regulations 3 and 15 of the Mäori Reservations Regulations 1994 make

the point very clear. The trustees had no right to delegate their responsibility for funds

concerning the marae to a committee.

[44] In addition, they should have held annual meetings properly notified with 21

days clear notice and presented the marae annual accounts and reports on the activities

of the trust to the beneficiaries. They are required to present a charter to the

beneficiaries at a properly convened hui for the beneficiaries’ approval. They should

have executed documents by a majority of trustees where that had been authorised by

a resolution of trustees. When problems arose, as they clearly did, they should have

applied to the Court for directions. They failed to do so.

78 Ruatoria MB 70

[45] All the trustees, including Mr Donnelly, must bear responsibility for these

failings, which regrettably, are not uncommon for Mäori reservation trusts. Given the

situation that had developed between the trustees – the holding of alternative

meetings, the allegations of fraud and forgery, the closing of accounts, the

involvement of the Lotteries Commission and their decision to suspend funding - the

failure to seek directions is inexplicable. It was certainly irresponsible.

[46] Regarding the Butler signing matter, I hardly think the four trustees have

covered themselves in glory in that situation either. They should have clarified the

position the moment doubts were raised. They could have done so but for reasons

known only to them, they did not do so. While Mr Butler gave his consent, he says,

the trustees should never have allowed themselves to fall into the position of having to

sign on behalf of a non-trustee if proper allowance had been made as to the deadlines

for the filing of funding applications. I accept the role of a trustee, especially for a

Mäori reservation, is voluntary. There are limits on what might reasonably be

expected from lay trustees as to their knowledge of trust law and procedure. But in

acting in this way the trustees have opened themselves up for criticism. Some of that

criticism is justified.

[47] The trustees and Mr Donnelly do not get on. That was obvious. And if it was

plain for me to see, then I am confident the beneficiaries too will be well acquainted

with the palpable hostility evident between the parties. That said, it is not a

requirement that trustees necessarily form a mutual admiration society. But they

should at least act civilly, with dignity and with a modicum of co-operation. Where

they do not agree, then there is provision for dissenting trustees to have their say and

to have their opposition recorded. The minority must respect the wishes of the

majority. As section 17(2)(d) of the Act provides, where that majority is oppressive

on the minority unreasonable, then the parties will have recourse to this Court.

[48] While trustees are free to dissent and to argue against the actions of each other

during trustee and beneficiary meetings, it is counterproductive if those arguments

spill over into the public domain. If any trustee is concerned as to the action of his or

her fellow trustees, then the Court’s directions should be sought. Trustees should not,

as has occurred in other cases I am aware of, publish conflicting notices in local

78 Ruatoria MB 71

newspapers airing their disputes in public. I cannot see how such behaviour is in the

interests of the beneficiaries, which must be the trustees’ paramount concern along

with protecting the trust property.

[49] I find that all trustees have failed to conduct themselves in a manner consistent

with the duties of their office. They have not followed the regulations. They have

failed to deal with the marae finances appropriately. They have allowed their

personal animosities to taint the operation of the trust. In short they have acted

contrary to the interests of the beneficiaries as a whole and have failed to seek

directions when that should have been obvious. The trustees must all take some

responsibility for the situation that has now arisen.

Mandate issues and fisheries

“With the growth of the settlement process, including fisheries, during the last decade or so, it would appear that marae have assumed a greater prominence in the affairs of iwi and hapū.

Surprisingly, these concerns were touched on, if only briefly, by counsel during the appeal

hearing and also by the Applicant himself during the lower Court proceedings. However, we

are not concerned with such matters. They are irrelevant for our purposes and we have

not given them anything other than fleeting consideration by way of early disposal. For

the avoidance of doubt, this Court will not be drawn into hapū and iwi politics and

mandate disputes that concern matters beyond those put in issue before the lower Court.

There are specific pathways available for the purposes of determining such questions

over mandate either by way of advice or adjudication. The principal issue for

determination by this Court therefore is whether or not the lower Court exercised its discretion

to remove and appoint trustees to the Reservation in accordance with correct legal principles.”

(Emphasis added)

in re: Matata 930 Rangitihi Marae - Pryor v Perenara (2003) 10 Waiariki Appellate MB 233 at

241

[50] The Appellate Court’s statements are apposite to the instant case. I will not be

drawn into mandate issues over fisheries between supporters of Te Rünanga o Ngäti

Porou and Uepohatu. There are processes available to deal with such matters and

neither this nor the Appellate Court will permit cases over the administration of Mäori

reservations to become vehicles for mandate disputes. They are a distraction and for

present purposes have no value in these proceedings other than to illustrate the

behaviour of certain trustees in the context of fulfilling, or otherwise, their duties to

the beneficiaries of this reservation. Whether the marae beneficiaries support Ngati

Porou or Uepohatu is irrelevant for present purposes, except insofar as the trustees’

78 Ruatoria MB 72

actions, collectively or as individual trustees, may be inconsistent with their duties to

act for the benefit of all beneficiaries.

[51] That said, I find Mr Donnelly’s explanations regarding his alleged attempts to

align Rongohaere Marae with Uepohatu disingenuous. After first claiming that he

had signed his name to a form supporting Uepohatu simply to mention what marae

were his affiliates, he later admitted that this was in fact done in an attempt to align

Rongohaere with Uepohatu and not Ngäti Porou for Te Ohu Kaimoana purposes. The

relevant excerpts from the minutes can be found at 74 Ruatoria 69-77. At page 73:

“Court: So, number five says that the following list of marae are the traditional marae that

belong to Ngati Uepohatu and attests to their existence. Isn’t that saying that these marae

belong to Ngati Uepohatu?

Donnelly: Yes it does.

Court: And the whole import of this document is to tell the Ohu Kaimoana, don’t deal with the

Runanga, they don’t have our mandate including Rongohaere. Deal with Uepohatu. That is

what it says isn’t it?

Donnelly: Yes.

[52] Mr Donnelly then confirmed his view that by being appointed a spokesperson

for fisheries on behalf of Rongohaere Marae, this gave him authority to make

decisions including aligning the marae with Uepohatu instead of the existing link with

Te Runanga o Ngäti Porou. Despite opposition from some of the trustees and

beneficiaries, Mr Donnelly considered he had the right to take such steps, 74 Ruatoria

MB 74:

“Court: Well I read this as saying that Rongohaere along with all these other marae are traditional marae belonging to Ngäti Uepohatu and the commission should deal with Uepohatu

L Donnelly: Yes.

Court: And Mr Barber asked you, who gave you the mandate? And you said, I did. You

didn’t need to go to the beneficiaries.

L Donnelly: Because of the fact that we were the fisheries spokespeople and with that coming

within the gambit of the fisheries that’s how we…

Court: So to take that further then, if that’s accurate, are you telling me that when you and Mrs

Tibble were put in place as fisheries representatives for Rongohaere, that included a mandate

to sign up to Uepohatu?

78 Ruatoria MB 73

L Donnelly: Because of the ongoing nature of matters, not only the Uepohatu Tribal

Authority, there are a number of other things that I was involved in and this is but one of them.

The mandate wasn’t really a considered issue from that point. The support that I got from

being the appointed spokesperson I took as allowing me to make decisions, if you like.

Court: I will put it to you Mr Donnelly, it’s simply not credible to suggest that wrapped up in

that representative role, you could alter Rongohaere’s allegiance from the rünanga to

Uepohatu.

L Donnelly: Who said that the allegiance was to the Rünanga?

Court: Well Ngäti Porou have been dealing with Te Ohu Kaimoana since 1989.”

[53] These exchanges highlight Mr Donnelly’s general approach to the role of the

trustee and his strident opposition to Ngäti Porou. While as I have said mandate

disputes cannot form part of removal applications for trustees over Mäori

reservations, the evidence underscores Mr Donnelly’s attitude to process and how he

considered regular consultation with beneficiaries of the marae on fisheries matters

was unnecessary.

[54] The short point is that it is unrealistic to suggest the beneficiaries would

support moves to realign Rongohaere Marae in the manner attempted by Mr Donnelly

without providing him with an appropriate and particular mandate for that purpose.

Put another way, these actions would doubtless give the beneficiaries cause for

concern where it appears that Mr Donnelly is using the marae to push a particular

political platform, which appears inconsistent with his duties as a trustee to represent

the interests of all the beneficiaries.

[55] If Mr Donnelly has seen fit to write to Te Ohu Kaimoana and claim

Rongohaere Marae supports Uepohatu instead of Ngäti Porou, given the change, a

series of hui with the beneficiaries to approve such a change ought to have been

obvious. It is, with respect, stretching credibility to suggest that simply being

appointed a spokesperson – whatever that means – endows that person with a right to

alter an existing alignment with Ngäti Porou in favour of Uepohatu.

[56] They key issue is that Mr Donnelly’s actions do not appear to have the support

of a majority of the beneficiaries. That cannot be consistent with his duties to act on

behalf of all the beneficiaries. In any event, if doubts remain, in due course the

78 Ruatoria MB 74

trustees to be appointed may wish to test those possibilities at a hui of the

beneficiaries called for that purpose.

Election of trustees

[57] It is essential, in the context of section 222 of the Act, that the mandate of the

trustees is tested given the particular circumstances that this present group find

themselves in as a consequence of their actions over the last ten years. Whatever

mandate they might have possessed, doubts must exist now as to their broad

acceptability to the beneficiaries. The periodic testing or refreshing of mandate to act

as a trustee should be regarded as a desirable process by beneficiaries - more so when

trustee relationships have broken down so clearly.

[58] The appropriate remedy in this case is for all trustees to vacate their positions

and for an election of trustees to occur at a properly constituted hui of the

beneficiaries. That hui will be supervised by court staff. If necessary, an independent

facilitator will be arranged. Trustees are invited to submit their views on an

independent chairperson for the hui within 14 days from the date of this judgment and

failing agreement the final decision will rest with the Registrar. The existing trustees

are of course free to offer themselves for election if they wish but have no obligation

to do so.

[59] In the circumstances, given the history of these matters, I consider it

appropriate that all trustees appointed after the general meeting should serve a term of

three years and then offer themselves for re-election.

“Owners” means owners

[60] For the avoidance of doubt, the gazette notice is explicit that the beneficiaries

of this Māori reservation are the owners. Not the descendants of owners but the

persons listed in the records of the Court as at the date of the election hui as beneficial

owners. It is the owners therefore who can participate and vote at the hui, and only

the owners. To put the matter beyond doubt, the owners will be those persons listed

78 Ruatoria MB 75

in the ownership list held by the Court on the day of the hui. As this is a meeting of

the beneficiaries voting will be by way of one owner one vote. It is not a meeting of

assembled owners, it is a hui of beneficiaries to a Mäori reservation.

[61] There are three exceptions to this determination. Firstly, any person holding a

valid order for succession to an owner, but whose name has not yet been entered into

the records of the Court by the time of the hui, will also be entitled to participate.

Secondly, any successor to a deceased owner in this land who has succeeded to that

deceased’s other interests but who is not recorded as an owner - due to previous

practices of not recording successions in Mäori reservations - will be entitled to

participate in the hui and vote.

[62] The third exception is really a variant of the first two. Where any person holds

a valid power of attorney for an owner and furnishes the Registrar with a properly

executed certificate of non-revocation they will be entitled to participate in the hui as

if they were an owner or successor to an owner.

[63] To assist in determining validity, owners or those persons claiming to be

owners who intend to participate at the hui will be required to furnish the Registrar

with details of their succession at least 48 hours prior to the hui.

[64] I stress that proxies are not permitted and are not a substitute for a validly

executed power of attorney. If any doubts remain as to the meaning of “owner” the

urgent direction of the Court should be sought.

Decision

[65] The applications by Luke Donnelly for removal of trustees and by Nicola

Tuala for the removal of Mr Donnelly are dismissed.

[66] The Registrar will, in concert with the trustees, convene a meeting of the

beneficiaries of Rongohaere Marae Mäori reservation within 2 months with 14 days

notice taking into account the imminent holiday period. All current trustees are invited

to resign their positions at the meeting. They are free to offer themselves for election

78 Ruatoria MB 76

if they wish. Those trustees who do not resign may be removed. Following the

election hui, the Registrar will forthwith make application to the Court for the

appointment of trustees.

[67] The only persons who are entitled to participate and vote at the hui are those

persons who are recorded in the ownership list held by the Court, any person holding

a succession order to a deceased owner or a properly executed power of attorney for

such owner or successor.

Pronounced in open Court at am/pm in on

the day of 2007

L R Harvey

JUDGE