IN THE MAORI APPELLATE COURT OF NEW ZEALAND … · 2010 M. āori Appellate Court MB . 516 [10] In...

RUAPUHA AND UEKAHA HAPU TRUST V TANE MAC A20080016920 2 November 2010

IN THE MAORI APPELLATE COURT OF NEW ZEALAND WAIKATO-MANIAPOTO DISTRICT

2010 MAORI APPELLATE COURT MB 512 (2010 APPEAL 512)

A20080016920 A20080016617

UNDER Section 59, Te Ture Whenua Maori Act

1993 IN THE MATTER OF Hauturu East 8 Block

BETWEEN RUAPUHA AND UEKAHA HAPU

TRUST Appellant

AND NORMAN TANE

Appellant

Coram: Judge A D Spencer

Judge L R Harvey Judge D J Ambler

Appearances: Mr S Webster & Mr J Koning for the Ruapuha and Uekaha Hapu

Trust Mr K J Catran for Norman Tane

Hearing: 11 February 2009

(Heard at Hamilton) Judgment: 2 November 2010

JUDGMENT OF THE APPELLATE COURT

2010 Māori Appellate Court MB 513

TABLE OF CONTENTS

Introduction [1]

Background [6]

Settlement of WAI 51 [6]

Implementation of the settlement [21]

Subsequent proceedings [37]

Current applications [45]

The appeal [50]

Preliminary determinations [50]

The trust’s arguments [51]

Mr Tane’s arguments [53]

Issues [56]

What did the 1990 settlement intend in relation to the re-vesting of HE8? [57]

What was the effect of the 1990 orders in relation to HE8? [69]

Section 436 order [69]

Option of re-vesting under section 267(3A) [74]

Section 438 orders [78]

Is the trust an ahu whenua trust?

[86]

Section 167 [97]

Variations to the trust order [102]

Who are the beneficiaries for the purposes of s 244(3)? [102]

Approach to consultation over variations to the trust order [113]

Should the Court’s list of owners or the trustees’ list of beneficiaries [118]

form the beneficiary roll?

Distributions via whanau trusts [125]

Can the definition of the beneficiaries be varied? [130]

Reference to the WAI 51 settlement [138]

Decision [142]

Special Aid Fund [148]


Introduction

[1] In 1990 the Crown settled WAI 51, a claim under the Treaty of Waitangi Act 1975

concerning land associated with the Waitomo caves. The claim was brought by Josephine

Anderson on behalf of the Ruapuha and Uekaha hapu of Ngati Maniapoto. The settlement

involved the return of several blocks of land that were formerly Māori freehold land,

including Hauturu East 1A6 (“HE1A6”) and Part Hauturu East 3B1 (“HE3B1”) which

contain the entrance to the Waitomo caves. At the time of the settlement these two blocks

were re-named Hauturu East 8 (“HE8”). The settlement was effected inter alia by the lower

Court making orders under the Māori Affairs Act 1953 (“1953 Act”) vesting HE8 in the

original 22 owners (by then deceased) and then vesting the land in the Ruapuha and Uekaha

Hapu Trust (“the trust”).

[2] In 2006 Norman Tane brought proceedings in the lower Court against the trust. Mr

Tane is a trustee of the trust but is at odds with the majority of trustees. The trust responded

with an application to review the trust under s 231 of Te Ture Whenua Māori Act 1993

(“1993 Act”).

[3] On 29 September 2008 Judge Milroy issued a decision wherein she made findings

and issued directions in relation to the continuation of the applications but did not finally

dispose of them.1 The trust and Mr Tane each appeal against aspects of those findings and

directions.

[4] At the heart of the appeals lies the question of who are the beneficiaries of the trust.

Mr Tane argues that the beneficiaries are the underlying owners of the land being the

successors to the original 22 owners. The trust argues that the beneficiaries are the

descendants of the original 22 owners regardless of legal entitlement to succeed.

[5] The respective positions of Mr Tane and the trust reflect philosophical differences

over the intention and effect of the settlement. But the answer to the question of who are the

beneficiaries has important consequences for the future of the trust. If Mr Tane is correct the

beneficiaries have fixed interests in the trust and its benefits, whereas if the trust is correct

the beneficiaries are a discretionary class only. Determining who is correct requires a

careful analysis of the background to the settlement and the Court’s orders.

1 134 Waikato MB 3


Background

Settlement of WAI 51

[6] In the late nineteenth century Māori associated with the Waitomo caves commenced

a tourist guiding business. One ancestor in particular, Tanetinorau, had a central role in that

business. It was not long before the Crown expressed an interest in the caves and the

business. Following a process that included the investigation of title and partition of

interests in the Native Land Court, the Crown acquired land associated with the caves. In

1906 HE1A6 was acquired under the Public Works Act 1905 and the Scenery Preservation

Act 1903. In 1911 HE3B1 was similarly acquired. At the time HE1A6 had 17 owners and

HE3B1 had 14 owners. A number of owners had interests in both blocks and in aggregate

there were 22 owners. Four of the owners were non-sellers and their interests were acquired

compulsorily. The Crown also acquired other lands at Waitomo at the time. Thus, the

Crown took control of the tourism business at the Waitomo caves.

[7] In 1988 the Government announced the proposed sale of various state-owned assets

including the Tourist Hotel Corporation Ltd (“THC”) which owned and operated the

Waitomo caves business. This prompted Mrs Anderson to file WAI 51 on behalf of the

Ruapuha hapu claiming breaches of the Treaty of Waitangi in relation to the acquisition of

various blocks of land including HE1A6 and HE3B1. The claim was expressed to be “...on

behalf of the hapu of Ruapuha... of which I am a member being represented by the original

owners of the Hauturu East No. 1A block...” and was later amended to also be on behalf of

Uekaha.

[8] Following the filing of the claim Mrs Anderson and others were involved in a short

period of activity that resulted in the settlement in late 1990. We refer to the main steps only

in that settlement process.

[9] In May 1989 a new organisation for the Ruapuha hapu was formed. It held its first

meeting on 6 May 1989. Kit Toogood, solicitor of Wellington, was appointed as legal

advisor for WAI 51. At its second meeting on 10 June 1989 Mrs Anderson advised the

meeting that the Waitangi Tribunal had proposed mediation to settle the claim. The hapu

agreed to mediate.


[10] In July 1989 the claim was amended to list more specific grievances and to include

Uekaha as a claimant hapu. Although Mrs Anderson was the sole named claimant, the

“claimants” were by that stage the Ruapuha and Uekaha hapu.

[11] Retired Judge Peter Trapski was appointed mediator. A mediation hui took place at

Tokikapu Marae, Waitomo on 7 and 8 September 1989. The mediation hui did not result in

a settlement but led to ongoing discussions and negotiations between the claimants and the

Crown with the assistance of the mediator. These discussions continued through the end of

1989 into early 1990.

[12] On 20 February 1990 Alex Frame, director of the Treaty of Waitangi Policy Unit

within the Department of Justice, wrote to the claimants on behalf of the Crown and set out

the framework of an agreement authorised by Cabinet on 12 February 1990. Paragraph 2

provided that the “ownership of the three acres claimed in the core cave area should be

vested in the claimants...” – that is the land that was to become HE8. Paragraphs 5 and 8

provided for other land to be vested in “the claimants”. Paragraph 4 noted that “...land

occupied by the school and the school buildings is still required for public works purposes,

i.e. education, and does not come within the ‘offer back’ criteria of sections 40(1) and

40(3)(b) of the Public Works Act 1981. If and when the time comes that the land and

buildings are no longer used for education purposes, the Ministry of Education envisages

reversion by way of the Public Works Act…”

[13] On 28 February 1990 a hui of the Ruapuha and Uekaha hapu discussed the Crown’s

proposal. Differing views were expressed as to whether the land should be returned to the

descendants of Tanetinorau or to the hapu. Although there was no consensus on this issue, a

resolution was passed to form a hapu trust.

[14] On 5 April 1990 members of Ruapuha and Uekaha hapu met with Mr Trapski,

Bishop Manu Bennett of the Waitangi Tribunal and Tribunal staff. After the departure of

these guests, members of the hapu discussed the question of ownership of the land upon its

return. There were different views: some argued that it should be vested in the non-sellers

only; some argued that it belonged to the non-sellers and sellers regardless; others said it

should be returned to the hapu in general; while others were concerned that they might end

up including the whole of Ngati Maniapoto in the land. Once again, there was no consensus.


[15] On 10 April 1990 Mr Toogood wrote to Mr Frame and Graeme Quinn of THC to

advise that the Crown’s proposal of 20 February 1990 was accepted in principle. In relation

to the proposed return of the three acres, he advised:

An appropriate trust deed will be prepared by the claimants to enable the re-vesting of the three acres over the cave. The beneficiaries of the trust have yet to be determined but the ultimate objective is that any financial return from the cave should be applied for the benefit of members of both hapu.

[16] On 26 April 1990 Mrs Anderson and one other met with Judge Carter to discuss

aspects of the proposed settlement in anticipation of applications being made to the Court.

The establishment of a s 438 trust was discussed.

[17] At a meeting on 28 April 1990 six trustees for the Ruapuha and Uekaha Hapu Trust

were nominated. Mr Tane was one of the six trustees.

[18] On 29 May 1990 Mr Frame wrote again to Mr Toogood enclosing an amended

Agreement in Principle approved by Cabinet (“the AIP”). Clause 2 provided again for the

three acres claimed in the core cave area to be “vested in the claimants” and noted that the

three acres “are owned, and belong to, the claimants in the full sense, subject only to the

principle that the caves are accessible to the public...”. Clauses 5 and 8 referred to the return

of other land to “the claimants”. Once again, clause 4 referred to the school and school

buildings not meeting the “offer back” criteria of the Public Works Act 1981 (“PWA”) and

that, if and when they became available, the reversion would be “under the appropriate

statutory procedure.”

[19] On 30 May 1990 Mr Toogood responded to Mr Frame to advise that the proposed

settlement was acceptable to the claimants.

[20] Thus, the settlement of WAI 51 is evidenced by the exchange of correspondence of

29 and 30 May 1990 and is recorded in the AIP. However, in a joint memorandum filed

with the Tribunal in 1996, Crown counsel and claimant counsel for WAI 51 refer to the final

agreement being “reached on 14 June 1990”. Furthermore, it is said that the Cabinet

minutes for 12 February 1990 (CAB (90) M3/11) and 25 October 1995 (TOW (95) M18/2)

“together record the terms of agreement.” It is not entirely clear what is meant by the

reference to a 14 June 1990 agreement. Certainly, on that date an Agreement to Licence

(sic) was entered into between the Minister of Conservation, “the hapu of Ruapuha and

Uekaha” and THC. This was one of the agreements contemplated by the AIP. In any event,

there is no real dispute that the AIP records the substance of the settlement.


Implementation of the settlement

[21] Following the AIP various steps needed to be taken to implement the settlement

including the re-vesting of HE8. An implementation committee was established which

included representatives of the Crown and the claimants. The “core group” of that

committee included Mr Toogood and Peter Bollmann of the Department of Survey and Land

Information.

[22] In July 1990 the claimants engaged Tom Woods, barrister of Wellington, to assist

with the re-vesting of the land. In a letter dated 9 August 1990 from Mr Woods to Mr

Toogood he set out his views on aspects of implementation of the settlement. He

contemplated the application for re-vesting being under s 436 of the 1953 Act.

[23] On 13 August 1990 the implementation committee met. The minutes of the meeting

record that it was proposed that the re-vesting of the land proceed under s 267 of the 1953

Act. Mr Woods was in attendance and is recorded as at first agreeing with proceeding under

s 267 but later reserves his position. As we go on to point out, whether the re-vesting

occurred under ss 267 or 436 had different consequences.

[24] At about this time a significant debate arose between the claimants and the Crown in

relation to the re-vesting of HE8. Mr Woods was instructed by the claimants that HE8

should be re-vested in the original non-sellers only. Mr Bollmann disputed the

appropriateness of this. His view was “that the land could vest in either the people from

whom the land was acquired, or their descendants.” Mr Bollmann and Mr Woods reached

an impasse and the matter was subsequently referred to the Minister of Lands who, Mr

Bollmann later recalled, was “adamant that the land should be vested in either the original

owners, or in an interim trust for the original owners, with the Court to determine beneficial

ownership.” Thus, the Crown’s view was that there should be no distinction between sellers

and non-sellers. This view prevailed, the Minister having the ultimate say on the issue.2

[25] Mr Woods prepared the necessary applications to the Court in relation to the various

blocks of land. The application for re-vesting of HE8 was under s 267(3A) to vest the land

in trustees to hold and administer for the use and benefit of the descendants of the original

22 owners. Applications for s 438 trusts for the different blocks were also filed. A hearing

was set down for 1 October 1990.

2 This debate is recorded in Mr Bollmann’s subsequent letter of 31 October 1990.


[26] On 27 September 1990 Mr Woods attended a meeting of the Ruapuha and Uekaha

hapu to prepare for the upcoming hearing. According to a note of the meeting kept by Lani

Dawn Tane-Stockler, a supporter of Mr Tane, Mr Woods proposed that the land be vested in

the “five” non-sellers and that on re-vesting no individual was to have an undivided interest

in the land.

[27] On 28 September 1990 Mr Woods filed a memorandum with Judge Carter

explaining the basis of the applications. He referred to the re-vesting being under s 436,

even though the application had been filed under s 267(3A). He confirmed his instructions

that the land was to be vested in the non-sellers and explained as follows:

In revesting the block in those persons, the intention is not to enable the restoration of title by succession so that the block once again becomes vested in common ownership.

Instructions are that the benefits arising from the return of this property be to promote the interests of the Ruapuha and Uekaha hapu.

In order to achieve that within the confines within the present legislation it is important to state in the application that the nominated owners in whose names the vesting order is made hold the land for the benefit of those two hapu.

The owners on the making of a vesting order hold the land in a bare trust capacity, subject to the conditions upon which the order was made.

In order to promote and facilitate the use and administration of the land in the interest of the hapu it will be necessary to appoint trustees pursuant to s 438 in place of the owners who are all deceased.

The section 438 trustees in essence acquire the same trust for which the owners were nominated to hold the land. The trust order reflects that.

You will note in the Māori Affairs Bill the prospect of creating whenua topu trusts to promote specifically the interests of iwi or hapu. As intended in this case, whilst a whenua topu trust is constituted no person is entitled to succeed to any interests vested in the trustees.

In this instance, the s 438 trustees do not acquire beneficial interests capable of succession but are appointed to facilitate the use, management and alienation of the land in accordance with the trusts and conditions the owners hold the land.

In other words, the s 438 trust is simply constituted to fulfil the obligations of the owner trustees.

The revesting otherwise is in accord with the terms of settlement of the Treaty of Waitangi claim. The trustees pursuant to s 438 assume all the obligations and rights vested in the claimants arising from the agreement with the Crown.

[28] Notwithstanding Mr Woods’ instructions regarding the re-vesting in non-sellers

only, the Crown remained of the view that the land should be re-vested in all the original

owners.


[29] On the morning of the hearing on 1 October 1990 Mr Woods raised with the Court

his concerns about whether orders under s 267 were appropriate and, following a conference

in Chambers, the applications were amended to be under s 436. The minute of the hearing

records Mr Bollmann as stating in relation to HE8:3

To meet the requirements of the terms of settlement I will ask for an order vesting the land in the persons who owned the land at the time of taking by the Crown.

In conclusion, I advise the Court that care has been taken to ensure that the beneficial interests of all the former owners are not derogated through these applications, and in this regard I thank the claimants and their counsel for their co-operation and flexibility. I also express my thanks to the Court for its forbearance in what has proven to be a complex and sometimes confusing task. It is with the co-operation of the Court and claimants that this implementation phase of the mediation of the Waitangi Tribunal claim (WAI 51) is able to be heard. The application which is signed by the Minister and has been submitted to you is pursuant to Section 267 of the Māori Affairs Act 1953. I would ask that the Court views its discretionary jurisdiction under Section 59/53 and amend the application to be an application under Section 436/53 which would seem more appropriate to the circumstances and then to make orders vesting the various blocks in the beneficial owners thereof as at the date of taking of these lands.

[30] Judge Carter made three orders on 1 October 1990 under s 436 re-vesting HE8,

Hauturu East 9, 10 and 11 and Hauturu East 12, 13 and 14 respectively, subject to the

Minister signing fresh applications under that section.4 The following day Judge Carter

made orders under s 438 establishing the trust in respect of HE8 and vesting the land in eight

trustees including Mr Tane.5 He made a separate trust order in respect of the other blocks.

[31] It took some time for the orders to be signed and sealed. In 1991 and 1992 Mrs

Anderson wrote to Judge Carter raising issues over the apparently mistaken inclusion of

Ingoa Tukemata and Konehu Tukemata in the list of owners of HE8 and advocating that

only four of the 14 original owners of Hauturu East 3B1 should have been included in the re-

vesting order. This latter point was a reiteration of the claimants’ view that the land should

be re-vested in non-sellers only.

[32] In a minute dated 28 July 1992 Judge Carter concluded that an order under s 60 of

the 1953 Act amending the vesting order by excluding Ingoa Tukemata and Konehu

Tukemata was appropriate. However, he did not agree that a more substantive amendment

could be made to the vesting order and directed that the signed and sealed orders be issued:6

3 104 Otorohanga MB 244 at p 248 4 104 Otorohanga MB 244 at p 250 5 104 Otorohanga MB 272 6 106 Otorohanga MB 195 at p 196


Under section 436 the Court has no discretion as regards the Orders it makes. It must make them in accordance with the terms of the application or it may decline them. It cannot modify them. This being the case the Court cannot entertain or assist Mrs Anderson in respect of her further representations.

[33] Accordingly, three orders were issued in relation to HE8 as a result of the sittings on

1 and 2 October 1990 (copies of which are annexed to this judgment):

(a) Order revesting land acquired for a public purpose pursuant to ss 60 and 436.

(b) Order vesting Māori freehold land pursuant to s 438(2).

(c) Order declaring the terms of trust pursuant to s 438(5).

[34] The trust order was a modified version of a standard s 438 trust order. It was an

investigatory trust in the sense that one of the objects of the trust was to investigate the

future use, management and alienation of the land within a year (clause B3), to discuss the

nature of the trust and the manner of appointment of trustees with the beneficiaries (clause

B6) and to hold a general meeting within the year to discuss any recommendations (clause

C11). The powers of the trustees were otherwise relatively restricted in comparison to

standard s 438 trusts. Clauses A1 and A2 are important:

A Title and Interpretation

1. The Trust shall be known as the Ruapuha-Uekaha Hapu Trust and shall apply to the lands set out in the Schedule hereto.

2. In this Trust order the word “beneficiaries” refers to all the descendants of the owners in whom the land was vested by order of the Court at Te Kuiti pursuant to Section 436 of the Māori Affairs Act 1953 on the 2nd day of October 1990.

[35] The trustees did not carry out the investigations and consultation or the AGM within

the one year provided in the trust order. In fact, a comprehensive review of the trust did not

take place until the trust brought the current application under s 231 in 2006. However, in

1998 the Court did vary the trust order pursuant to s 244 by amending clause 4 to provide for

trustees’ fees and by adding a new clause 8 to provide for the distribution of funds to

whanau trusts approved by general meeting of owners.7

[36] Before discussing the background further we note that in the lower Court the parties

to the appeals referred to many other items of correspondence and documents which discuss

the basis on which HE8 was returned. Some pre-date the hearings on 1 and 2 October 1990

7 114 Otorohanga MB 100


and some post-date them. In our view, they are irrelevant to our task of understanding the

settlement and interpreting the orders. Furthermore, counsel referred to comments made by

Judge Carter in informal discussions and correspondence both before and after the orders.

Once again, those matters are irrelevant, particularly as Judge Carter was functus officio

once he made the orders.

Subsequent proceedings

[37] Since 1999 various applications have been pursued which have tested the issue of

whether the interests vested in the original 22 owners in 1990 were capable of succession.

The outcomes of those applications are said to be relevant to the appeals.

[38] On 3 February 1999 Judge Carter made succession orders in relation to the estate of

Purangi Tanetinorau, one of the original 22 owners who died in 1972.8 The orders were in

favour of two of his grandchildren, being Ms Tane-Stockler and Mr Tane, in terms of his

1970 will. The orders included his interests in HE8.

[39] On 10 May 2002 Judge Carter issued a decision concerning six applications for

succession to interests held by some of the original 22 owners.9 This was the first occasion

on which the Court had expressly addressed the question of whether the interests of the

original 22 owners in HE8 were capable of succession. Judge Carter concluded that, in light

of the circumstances of the settlement of WAI 51 and the 1990 orders, it was not intended

that the original 22 owners hold title as absolute owners and be subject to rights of

succession. He dismissed all applications and directed that the Court’s title record be

amended to show that the original 22 owners held their interests as bare trustees. As for the

orders he had made on 3 February 1999 in relation to the interests of Purangi Tanetinorau in

HE8, he concluded that the order had been made in error and invited the Registrar to bring

an application under s 45 to correct the order.

[40] Judge Carter’s decision of 10 May 2002 was appealed to the Māori Appellate Court.

In a decision dated 30 May 2003, Tane-Stockler – Hauturu East 8 Block,10 this Court

concluded that the interests of the original 22 owners could be succeeded to and granted the

appeal. The Court noted that the applications and submissions in respect of the 1990

8 61 Tauranga MB 182 9 120 Otorohanga MB 3-12 10 Tane-Stockler – Hauturu East 8 Block (2003) 20 Waikato Maniapoto Appellate MB 158 (20 APWM

158)


hearings had not asked for a limitation on succession, and none was stated in the orders.

Pursuant to s 354 of the 1993 Act, all s 438 trusts continue as ahu whenua trusts under s 215.

Section 215(8) expressly provides that an ahu whenua trust shall not affect a person’s

entitlement to succeed to any beneficial interest in land vested in the trustees for the purpose

of the trust. The Court further concluded that allowing succession to the original 22 owners

would not invalidate the 1990 settlement.

[41] The various applications for succession came back in front of Judge Carter. In a

decision dated 12 December 2003 Judge Carter made succession orders in relation to those

owners who died intestate.11 As far as succession to Purangi Tanetinorau was concerned, a

complex legal issue arose as, although he died leaving a will, at the time of his death he did

not own any interests in HE8. It was Crown land and would not come into his ownership

until 1990, 18 years after his death. Judge Carter suggested three alternative approaches to

dealing with succession to Purangi Tanetinorau but ultimately did not express a final view as

he concluded that the estate was outside the provisions of Part IV of the 1993 Act by reason

of s 100(2) as probate had been granted. Judge Carter concluded that Mr Tane would need

to apply to the Registrar for succession orders under ss 81 and 81A of the Māori Affairs

Amendment Act 1967 (“1967 Act”).

[42] Mr Tane and Ms Tane-Stockler had also applied under s 242 of the 1993 Act for

orders determining their entitlement to funds held by the trust. In a separate decision dated

12 December 2003 Judge Carter dismissed the application as he concluded that an order

under s 242(1) would only be appropriate where the trust had authorised a payment to a

particular beneficiary, that is, where the trust had effectively declared a dividend.12 As that

had not happened, no order could be made. Furthermore, Judge Carter considered that the

application was contrary to the 1990 settlement and the provisions in the trust order.

[43] Mr Tane applied to the Registrar pursuant to ss 81 and 81A of the 1967 Act to

succeed to the interests of Purangi Tanetinorau. By way of orders dated 29 April 2004 the

Registrar made an order pursuant to s 81A vesting Purangi Tanetinorau’s interests in HE8 in

Mr Tane and Ms Tane-Stockler in terms of the 1970 will.13

[44] Subsequently, Georgina Tane-Gibbons, another grandchild of Purangi Tanetinorau,

filed an application pursuant to s 45 of the 1993 Act in respect of the Registrar’s s 81A order

11 122 Otorohanga MB 3 12 122 Otorohanga MB 17 13 6 Registrar Waikato-Maniapoto MB 162


claiming that the interests should only be succeeded to on the basis of intestacy. Judge

Milroy conducted an inquiry and issued a report wherein she concluded that succession must

be dealt with on the basis of an intestacy. Deputy Chief Judge Isaac (as he then was) agreed

with Judge Milroy’s assessment of the legal position and in a judgment dated 19 August

2008 cancelled the Registrar’s vesting order and made an order pursuant to s 118(6) vesting

Purangi Tanetinorau’s interests on the basis of intestacy.14

Current applications

[45] On 20 January 2006 Mr Tane filed applications under ss 351, 215, 17 and 242 of the

1993 Act seeking orders “that living owners/shareholders are properly recognised by the

[trust], and that their interests in HE8 block be distributed directly to living

owners/shareholders.” On 4 October 2006 the trust filed the application for review of the

trust pursuant to s 231 of the 1993 Act.

[46] Judge Milroy directed that the two applications be heard together and appointed Mr

Catran to represent Mr Tane. The applications were heard on 16 October 2007. The hearing

focussed on the nature of ownership and beneficiary interests in HE8, past performance of

the trustees and proposals from the trust and Mr Tane for new trust orders.

[47] In her decision of 29 September 2008 Judge Milroy considered who was intended to

benefit from the trust. Regarding disputes over the nature of Tanetinorau’s original

ownership of the land, she concluded that at law he held the land with all the rights and

powers of an owner.15 She concluded that the 1990 settlement was between the Crown and

the hapu of Ruapuha and Uekaha.16 Further, as the vesting orders were in favour of the

original 22 owners and as the trust order provided for the beneficiaries to be the descendants

of those owners, she held that the Court must ensure that the descendants remained the

beneficiaries of the trust unless it is clear that they have consented to a change to the

beneficiaries.17 Nevertheless, the descendants of the original 22 owners were entitled to

succeed to interests in accordance with this Court’s decision in Tane-Stockler – Hauturu

East 8.18

14 Georgina Tane-Gibbons – Purangi Tanetinorau (2008) 2008 Chief Judge’s MB 339 (2008 CJ 339) 15 Ruapuha Uekaha Hapu Trust – Hauturu East8 (2008) 134 Waikato MB 3 (134 W 3) at [23] 16 Ibid at [30] and [46] 17 Ibid at [48] 18 Ibid at [50]


[48] Judge Milroy then addressed the review of the trust order. She considered that a

significant change to the beneficiaries would constitute a fundamental change to the nature

of the trust.19 In terms of s 231, she was not satisfied that there was a sufficient degree of

support for the proposals of either the trust or Mr Tane. She identified various difficulties

with both proposals. Furthermore, the current situation whereby the trust pays dividends to

four whanau trusts who do not hold interests in HE8 but represent descendants of some of

the original 22 owners was problematic. Judge Milroy identified the specific matters that the

trust order needed to address,20 including that the definition of beneficiaries must remain the

descendants of the original 22 owners.21 She directed that the trust and Mr Tane amend their

respective draft trust orders taking into account her comments at paragraph 12522 and

directed that a further meeting be held to consider the proposals and that only those listed in

the Court’s list of owners would be entitled to vote.23

[49] As far as the application for enforcement of obligations of trust was concerned,

Judge Milroy identified that the question of the unsecured loan to the Tanetinorau Opataia

Whanau Trust needed to be addressed by the trustees and, providing it was dealt with

satisfactorily, that application would then be dismissed.24

The appeal

Preliminary determinations

[50] As Judge Milroy did not make final orders or dismiss the applications her findings

and directions could only be considered by this Court by way of appeals against preliminary

determinations under s 59. We brought this issue to the attention of counsel and Judge

Milroy in a minute issued on 25 February 2009.25 On 5 June 2009 Judge Milroy granted

leave to appeal the preliminary determinations.26 Accordingly, we approach the appeals as

being against preliminary determinations.

19 Ibid at [67] 20 Ibid at [125] 21 Ibid at [125(i)] 22 Ibid at [136] 23 Ibid at [138] 24 Ibid at [152] 25 21 Waikato – Maniapoto Appellate MB 212 26 139 Otorohanga MB 99


The trust’s arguments

[51] The trust submits that all descendants of the original 22 owners are beneficiaries of

the trust and are entitled to fully participate in the affairs of the trust. The trust argues that

Judge Milroy erred in two respects in her directions:

(a) by directing at paragraph 138 of the decision that only underlying owners of

HE8 are entitled to vote at a meeting of owners called by the Registrar

regarding the proposals to amend the trust; and

(b) by directing at paragraph 125 (sic) of the decision that any proposal to

amend the trust order is not required to retain implementation of the WAI 51

settlement as an object of the trust.

[52] In support the trust makes several points:

(a) The descendants of the original 22 owners are beneficially entitled to HE8

and/or the original 22 owners hold title under the vesting order together with

any subsequent owners as trustees for their descendants and/or in a fiduciary

capacity.

(b) The 1990 revesting order is subject to the terms of the WAI 51 settlement.

Under s 436(1) and (3) of the 1953 Act a Minister could stipulate “...any

other conditions subject to which a vesting order under this section may be

made...” and in making the vesting order the Court was obliged to make it

“...subject to such terms and conditions as may be specified in the

application...”. The vesting order was expressed to be “subject to the terms

of settlement of claim WAI 51”.

(c) The 1990 trust order is also subject to the WAI 51 settlement. The trust

order defines the beneficiaries as “all the descendants” of the 22 owners and

includes as an object in clause B2 the fulfilment of the settlement of claim

WAI 51.

(d) The direction in paragraph 138 that only underlying owners be able to vote

at the meeting was therefore wrong as all the descendants of the original 22

owners are beneficiaries under the trust order. Consequently, a large number

of beneficiaries will be excluded from participating in the affairs of the trust.

This was characterised as a defacto variation of the trust.


(e) Judge Milroy appeared to favour the Court’s list of owners over the trust’s

list of beneficiaries. This was wrong. Clause 11 of the trust order provided

for the trust to maintain the list and its reliability had not been raised as an

issue in the hearing.

(f) In terms of paragraph 125, the vesting order and the trust order were

expressly subject to the WAI 51 settlement and therefore it should remain as

an object of the trust.

(g) The trust was not an ahu whenua trust by reason of the transitional effect of s

354 of the 1993 Act as the trust had been constituted under s 438(2) of the

1953 Act and not s 438(1) and successions should not occur.

Mr Tane’s arguments

[53] Mr Tane argues that only successors to the original 22 owners are beneficiaries of

the trust. He challenges two aspects of Judge Milroy’s decision:

(a) He says that the findings at paragraphs 48 and 50 that the descendants of the

original 22 owners must remain the beneficiaries of the trust is in error.

(b) He says that the direction at paragraph 125(i) that the definition of

beneficiaries must remain as “the descendants of the original owners in

whom the land was vested in 1990” is likewise in error.

[54] In support Mr Tane makes several points:

(a) The core issue was whether the beneficiaries of the trust, and thereby those

who “control” the trust, are the successors of the original 22 owners or the

descendants of the original 22 owners;

(b) Prior to the revesting and trust orders in 1990, various views had been

expressed amongst the community of the descendants of the original 22

owners and the hapu as to how ownership of the land would be configured

when returned, but there was no consensus;

(c) The Crown intended that the land be vested in the original 22 owners and

that their successors be entitled to succeed. This was consistent with the


Crown seeing the return of the land as analogous to a return under the PWA,

in which case those entitled were the successors of the original owners.

(d) Judge Milroy’s finding at paragraph 30 that the settlement was with the hapu

of Ruapuha and Uekaha was in error: the settlement was with the “beneficial

successors to the original owners”.

(e) The conclusions in paragraphs 48 to 50 are contrary to the Crown’s

intentions in respect of the 1990 orders and derogate from the rights that

arise from ownership in the land.

[55] Mr Catran, for Mr Tane, went on to address in his submissions (paragraphs 109 to

167) the new trust orders proposed by Mr Tane and by the trust. Judge Milroy had

determined that there was insufficient support for either proposal and directed a further

meeting to consider revised proposals in accordance with her directions. Neither party has

appealed that conclusion. Therefore, we do not consider it our function to express views on

the proposed trust orders except to the extent that they relate directly to the findings and

directions under appeal.

Issues

[56] The appeal gives rise to three broad issues. First, what did the 1990 settlement

intend in relation to the re-vesting of HE8? Specifically, who was to benefit from the land

and did the settlement contemplate successions? Second, what was the effect of the 1990

orders in relation to HE8? This is the central issue. Although the settlement was recorded in

the AIP, it is the 1990 orders that implemented the settlement in relation to HE8 and it is

those orders that determine the nature of the interests in the land. Third, we discuss

consequential issues in relation to the proposed variations to the trust order.

What did the 1990 settlement intend in relation to the re-vesting of HE8?

[57] The trust contends that the intention of the 1990 settlement was that the land

including HE8 be returned to the claimant hapu, Ruapuha and Uekaha. The trust points to

correspondence, minutes and memoranda leading up to and following the 1990 orders for

support.


[58] Mr Tane contends that the intentions of the claimants were at times confused, that

the Crown’s offer did not focus on who was to benefit from or own HE8, but that the

settlement arose in the context of the return of land taken under the PWA and therefore the

intention was that the land be returned to the “successors, from whom it was acquired.”

[59] We agree with Mr Tane that up to and following the settlement with the Crown

various views had been expressed amongst the claimants as to the manner in which

ownership of the land would be returned. There was no clear consensus. Nevertheless, it is

beyond argument that the settlement was between the Crown and the hapu of Ruapuha and

Uekaha: Mrs Anderson brought WAI 51 on behalf of the hapu; the mediation and

negotiations were conducted with representatives of the hapu; the AIP and related settlement

documents were all entered into with representatives of the hapu; and the AIP spoke of

returning HE8 and other land to “the claimants”, that is, the hapu. Conversely, at no stage

was the settlement in relation to HE8 expressed to be for the sole benefit of those who could

succeed to the original 22 owners.

[60] We consider Mr Tane’s focus on the PWA to be misguided. Although the proposed

sale of the THC and the potential breach of the “offer back” rights under the PWA was the

catalyst for lodging WAI 51, and no doubt had some influence on the negotiations with the

Crown, the settlement was not a settlement of claims under the PWA. It was a settlement of

claims under the Treaty of Waitangi Act and was at the higher level of resolving and

enhancing Treaty relationships.

[61] The AIP did not purport to settle claims under the PWA nor did it purport to re-vest

the land under the PWA. The AIP makes no mention of the PWA in relation to the land that

was to be re-vested – clauses 2, 5 and 8. The only clause that mentions the PWA is clause 4

which relates to the school land which, at the time, did not satisfy the “offer back” criteria.

[62] Mr Catran argued that the reference in clause 4 to the PWA colours the meaning and

intention of clauses 2, 5 and 8 and that consequently the AIP contemplated the re-vesting of

HE8 and other land in the successors to the original 22 owners. We disagree. Had the

Crown and the claimants intended the PWA regime to apply to the land in clauses 2, 5 and 8

then we would have expected those clauses to have expressly said so in the same manner as

clause 4. Clause 4’s reference to the PWA distinguished the Treaty settlement process that

applied to the land in clauses 2, 5 and 8 from the PWA process that would apply to the

school land if it was no longer needed by the Crown. That is, the PWA was only relevant in

the event of the return of other land in the future.


[63] Nevertheless, we acknowledge that the Crown officials and the Minister approached

the settlement with PWA principles in mind. Given the Crown’s duty of utmost good faith,

that is not surprising. This is discussed in some detail in Mr Bollmann’s letter of 31 October

1990. He makes it clear that he and the Minister considered that the land should not be re-

vested in non-sellers only, but that it should be re-vested in either the people from whom the

land was acquired or their “descendants”. He goes on to discuss the situation with land still

owned by the Crown, namely, Hauturu East 1A3. There was apparently some debate at the

time over whether s 40 of the PWA applied because of arguments over whether that land

was purchased from willing sellers. From the Crown’s perspective, that did not matter:

Once the land is no longer required for the work for which it was acquired, then irrespective of whether the land was acquired under the Public Works Act, the principles of s 40 of that Act are applied as a matter of policy. The principles referred to here requires surplus land to be offered back to the former owners or their descendants.

[64] Mr Bollmann was speaking in terms of “principles” affecting the return of Crown

land and not the technical legalities of the PWA. Accordingly, we are not persuaded by

Judge Milroy’s suggestion that this discussion could indicate the Crown’s consideration of

succession rights in respect of HE8.27 Neither in Mr Bollmann’s letter of 31 October 1990

nor elsewhere does the Crown venture into the more acute issue of whether “the former

owners or their descendants” meant their “successors” or “descendants”. The Crown did

not turn its mind to the distinction at the time.

[65] Mr Catran (paragraphs 101 and 102) also referred to paragraphs 37 to 41 of Judge

Milroy’s decision and argued:

Mr Bollmann’s letter to the Treaty Unit sets out Mr Wood’s opposition to successions (para 37). Mr Bollmann stated his own opposition to that approach and emphasised that the Crown intended to ensure that the beneficial interests of the former owners were not derogated through the WAI 51 application.

[66] Mr Catran has misread the documents. Mr Bollmann does not refer to Mr Woods’

“opposition to successions” in his letter of 31 October 1990. Rather, he refers to his own

opposition to Mr Woods’ proposal that HE8 be re-vested in the non-sellers. That was the

heart of the debate. The Crown had a firm view that the land should be re-vested in the

sellers and non-sellers without discrimination but did not express a view on whether or not

successions should follow.

27 Ruapuha Uekaha Hapu Trust – Hauturu East 8 (2008) 134 Waikato MB 3 (134 W 3) at [43]


[67] Furthermore, when Mr Bollmann addressed the Court on 1 October 1990 and stated,

“...I advise the Court that care has been taken to ensure that the beneficial interests of all the

former owners are not derogated through these applications...”, he was again referring to the

inclusion of non-sellers and sellers and was not speaking in support of successions. In fact,

we cannot find a single reference in the evidence to the Crown expressly addressing the

issue of successions.

[68] Accordingly, we agree with Judge Milroy’s conclusion that the settlement was with

the hapu of Ruapuha and Uekaha. Furthermore, the AIP and associated documents did not

purport to preserve successions. The possibility of successions had not arisen. The Crown’s

intention was that HE8 be returned to the original 22 owners and their “descendants” in the

broadest sense of that word.

What was the effect of the 1990 orders in relation to HE8?

Section 436 order

[69] The order under s 436 vested “an estate in freehold in fee simple” in HE8 in the

original 22 owners. Under s 436(3) the Minister could stipulate any “terms and conditions”

to be included in the order. The order refers in its recitals to two conditions having been

stipulated by the Minister:

AND WHEREAS the Minister has stipulated in his application that agreement to vest was reached subject to the following conditions:

(a) That the order be and is subject to the terms of settlement of claim WAI 51 with the Waitangi Tribunal under the Treaty of Waitangi Act 1975.

(b) That all expedient steps be taken to have the said land vested in trustees pursuant to Section 438 of the Māori Affairs Act 1953 with all the necessary powers and authorities to conclude and carry on any arrangements and agreements entered into in respect of the said land binding on the claimants in the settlement of claim WAI 51 with the Crown under the Treaty of Waitangi Act 1975. (emphasis added)

[70] The trust argues that this clause imports into the vesting order an express trust that

the original 22 owners hold the land for their descendants and that their interests could not

be succeeded to.

[71] While we agree that the intention of the settlement was that it benefit the Ruapuha

and Uekaha hapu, and therefore the descendants of the original 22 owners, we do not accept


that the “terms of settlement” provided that the original 22 owners held the land on trust.

The “terms of settlement” for the purposes of the order must be the AIP. The AIP does not

provide for the original 22 owners to be trustees, nor does it exclude the right of succession

to those interests. Furthermore, the Crown’s correspondence did not stipulate either of those

two things.

[72] Mr Woods may well have been instructed that there was to be no right of succession

to the interests, and that may well have been his interpretation of the effect of the settlement,

but his instructions and views do not have the effect of importing such terms into the AIP.

[73] Accordingly, the reference in the s 436 order to the conditions stipulated by the

Minister did not impose an express trust on the original 22 owners and did not exclude the

right of succession. The s 436 order simply vested HE8 in the original 22 owners.

Successions were a legal consequence of the s 436 order, albeit that they were not expressly

contemplated by the settlement. Importantly, any trust obligations arose separately as a

result of the s 438 orders.

Option of re-vesting under section 267(3A)

[74] The re-vesting could have been effected under either ss 267 or 436 of the 1953 Act.

Sections 267 and 436 provided:

267 Special provisions for sale to and vesting in Māoris of interests in Māori land acquired by Crown

(1) This section applies with respect to any Māori land or to any undivided share in Māori land that has at any time been acquired by the Crown, whether pursuant to this Part of this Act or otherwise howsoever, and whether or not the land has been proclaimed to be Crown land.

(2) Any land or undivided share in land to which this section applies may, with the consent of the Minister of Lands, and notwithstanding anything to the contrary in this or any other Act, be sold or otherwise disposed of to any Māori or the descendant of a Māori, or to a body corporate of owners established under Part 22 of this Act, on such terms and conditions as to the amount of purchase money (if any), the payment thereof by instalments or otherwise, the security (if any) to be given for any unpaid purchase money, and such other terms and conditions as the Minister of Lands may determine.

(3) The Court, on the application of the Minister of Lands, shall make an order vesting any land or undivided share in land to which this section applies, in the person or persons specified in the application as being entitled thereto.

(3A) The Court, with the agreement of the Minister of Lands, may, instead of vesting the land in the persons beneficially entitled, vest it in some person


or persons or in a body corporate as trustees for the persons beneficially entitled or for some class of persons.

(4) Every vesting order made under this section shall have the same effect as if the land or undivided share had been duly transferred by the Crown to the person or persons in whose favour the vesting order is made.

(5) All land sold or otherwise disposed of by the Crown pursuant to this section to a Māori (whether in severalty or in common with any other person or persons) or to a body corporate shall, on the taking effect of the vesting order, become and be deemed to be Māori freehold land.

(6) All land in respect of which a vesting order is made pursuant to this section shall remain subject to all leases, charges, or other encumbrances to which it was subject on the making of the vesting order.

436 Land acquired from Māoris for public work may be revested in Māoris

(1) Where any Māori land or any [General land] owned by Māoris has been at any time acquired by the Crown or by any local authority or public body for the purposes of a public work or other public purpose, and is no longer required for [the public work or other public purpose for which it was acquired or is held], the … Minister or authority under whose control the land is held or administered may apply to the Court to vest the land in accordance with the provisions of this section. In any application made for the purposes of this section the Minister or other applicant may nominate the person or persons in whom the land shall be vested, and may stipulate the price to be paid for the land, the terms and conditions of payment, and any other conditions subject to which a vesting order under this section may be made, or may leave all or any of such matters to be dealt with in the discretion of the Court.

(2) An application may be made to the Court and the Court may exercise its jurisdiction under this section notwithstanding the provisions of any Act to which the land is subject and notwithstanding any terms and conditions imposed by any Act on the sale or other disposition of the land.

(3) On application being made under this section the Court may make one or more orders, subject to such terms and conditions as may have been specified in the application or subject to any other terms and conditions not inconsistent with any terms and conditions so specified as it may think fit to impose, vesting the land or any parts thereof, freed from any trusts and restrictions subject to which the land may previously have been held, in such person or persons as may be nominated by the applicant or, if no such nomination has been made, in such person or persons as may be found by the Court to be justly entitled thereto, for an estate of freehold in fee simple and, if more than one, as tenants in common in the relative shares or interests defined by the Court.

(4) Instead of making a vesting order under this section or in addition to any such order the Court if it thinks it necessary or convenient so to do, may amend any existing instrument of title so as to include therein the land or any part of the land to which the application relates, and the land so included shall thereupon become subject to all reservations, trusts, rights, titles, interests, and encumbrances affecting the other land comprised in that instrument of title.

(5) Any land vested in a Māori pursuant to this section shall thereupon be deemed to become Māori freehold land, unless the Court otherwise expressly orders.


(6) The District Land Registrar is hereby authorised to make all such alterations and amendments in the register and to issue such new certificates of title as may be necessary to give effect to any order made by the Court under this section.

[75] At the hearing on 1 October 1990 Mr Woods persuaded the Crown to amend the

applications to re-vest to be under s 436. He perceived possible limitations or adverse

consequences of re-vesting under s 267, though it is not clear what they were.

[76] Importantly, had the re-vesting taken place under s 267 then the claimants could

have achieved their stated aim of ensuring that there would be no successions. That is

because s 267(3A) provided an alternative method of vesting in trustees for a class of

persons:

(3A) The Court, with the agreement of the Minister of Lands, may, instead of vesting the land in the persons beneficially entitled, vest it in some person or persons or in a body corporate as trustees for the persons beneficially entitled or for some class of persons. (emphasis added)

[77] Thus, an order under s 267(3A) could have vested HE8 in the original eight trustees

expressly on behalf of the descendants of the original 22 owners and there would have then

been no interests to succeed to. But, as we know, that did not occur.

Section 438 orders

[78] The orders under s 438 are relatively straightforward. The order under s 438(2)

vested HE8 in the eight trustees. The order under s 438(5) declared the terms of trust.

Importantly, clause A2 of the trust order expressly declared the beneficiaries to be the

“descendants” of the original 22 owners.

[79] Mr Catran argued that the successors were “either the proper beneficial owners of

the land (if not the whole trust estate), or the successors’ interests sit outside the trust estate

and are purely managed by the trustees as agents for the owner/successors” (paragraph 115).

He argued that as owners of interests in the land, the successors were entitled to all the

indicia and benefits of ownership including a say in how it is used, subsequent disposition

and income generated by the land (paragraph 112). Further, he argued that the trust was an

investigative trust with the task of determining who the beneficiaries were before the trust

was finalised (paragraph 94(iv)).


[80] The successors are indeed the underlying owners of the land – s 215(8) preserves

their right of succession. However, that does not mean that they are the beneficiaries of the

trust. The beneficiaries are defined in the trust order as a separate class that is not dependent

on ownership but on descent. Consequently, even though successions give rise to

underlying interests in the land, those interests are superseded by the interests of the

beneficiaries as per the trust order.

[81] In reality, there is no interest for the trust to manage on behalf of the underlying

owners, contrary to Mr Catran’s argument. Nor can it be said that the underlying owners are

entitled to the indicia and benefits of ownership as any such “rights” are overridden by the

trust order. In short, the underlying ownership does not give rise to any tangible rights or

benefits. It is merely a reversionary interest which would only give rise to tangible rights if

the trust were ever terminated.

[82] These conclusions might seem extraordinary but this was no ordinary s 438 trust.

The land was vested for the benefit of a defined class of discretionary beneficiaries and not

the beneficial or underlying owners. The trust order is clear in this regard. This was

permissible under s 438 as it did not stipulate that land must be held for the underlying

owners only: s 438(5) provided that the trust order “may authorise or direct the trustees to

use and manage the land for any purpose...” This included the purpose of benefiting a class

of beneficiaries beyond the legal ownership, as per the trust order before us.

[83] It must be remembered that it is common for Māori land to be held for a class of

persons beyond the underlying ownership. There are many mechanisms that provide for

this. Whanau trusts under s 214 are a prime example. Under s 215(6) the Court can provide

for the trustees of an ahu whenua trust to apply “the whole or any part” of the income for

Māori community purposes. Were the Crown and claimants re-vesting the land today, it is

likely that an order under s 216 would be sought creating a whenua topu trust which also

overrides underlying ownership – Mr Woods referred to this future possibility in 1990. A

Māori reservation under s 338 can also achieve a similar outcome, though that brings with it

certain restrictions. These examples illustrate that the consequences of the trust order are far

from unique.

[84] We also reject Mr Catran’s argument that, as an investigative trust, the trustees were

mandated to determine the beneficiaries before the trust was finalised. The trust order did

not provide for the trustees to revisit that question. It contemplated a review within one

year, but that was to do with: the “future use, management and alienation of the land”


(clause B3); whether the trust was to be a comprehensive trust or an administrative trust

(clause B6(a) and (b)); the appointment of trustees (clause B6(c)); and, in general, the

“future utilisation and administration and constitution” of the trust (clause C11(c)).

[85] In summary, the effect of the s 438 orders was that the land was vested in trustees

for the benefit of the descendants of the original 22 owners as a class of discretionary

beneficiaries. The orders override the interests of the underlying owners who retain a

reversionary interest only.

Is the trust an ahu whenua trust?

[86] The trust argued that Judge Milroy was wrong in concluding that the interests of the

original 22 owners could be succeeded to as the trust is not an ahu whenua trust.28

[87] This argument was immediately unattractive to us as we were effectively invited to

overrule Tane-Stockler – Hauturu East 8.29 If the trust disagreed with that decision then it

had to either seek a review in the High Court or appeal under s 58A to the Court of Appeal.

It did neither.

[88] Nevertheless, the trust sought to convince us that we could entertain this argument

as it had not been raised in the earlier appeal. Mr Koning argued that successions were not

available as s 215(8) did not apply because the trust was not an ahu whenua trust in terms of

s 354: the trust had been constituted under s 438(2) and s 354 only applied to trusts

constituted under s 438(1).

[89] Section 354 provides:

354 Existing trusts to continue as ahu whenua trusts

Notwithstanding section 353 of this Act, any trust constituted under section 438(1) of the Māori Affairs Act 1953 and existing at the commencement of this Act, shall continue to exist after the commencement of this Act as an ahu whenua trust, and the provisions of Part 12 of this Act shall apply accordingly.

[90] Mr Koning’s argument misunderstands both the orders that were made by Judge

Carter and the operation of s 438.

28 Ibid at [50] 29 (2003) 20 Waikato Maniapoto Appellate MB 158 (20 APWM 158)


[91] The trust was not “constituted” by reason of an order under s 438(2). On 2 October

1990 Judge Carter made two orders under s 438. First, an order under s 438(2) vesting the

land in the eight trustees. Second, an order under s 438(5) declaring the terms of trust.

There was in fact no order expressly constituting the trust under s 438(2).

[92] Section 438 distinguished between the constituting, vesting and declaring of trusts.

This distinction is repeated more clearly in the 1993 Act: an ahu whenua trust is constituted

under s 215; the land is vested in trustees under s 220; and the terms of trust are declared

under s 219.

[93] Section 438(1) and (2) must be read together:

438 Court may vest land in trustees

(1) For the purpose of facilitating the use, management, or alienation of any Māori freehold land, or any customary land or any [[General land]] owned by Māoris, the Court, upon being satisfied that the owners of the land have, as far as practicable, been given reasonable opportunity to express their opinion as to the person or persons to be appointed a trustee or trustees, may, in respect of that land, constitute a trust in accordance with the provisions of this section.

(2) A trust may be constituted under this section on the Court's own motion in the course of any proceedings before it or upon application in that behalf, by the making of an order vesting the land in any person or persons (with their prior consent) upon and subject to the trusts declared by the Court in a separate trust order. The person or persons in whom any land is at any relevant time vested by an order under this section are hereafter in this section referred to as the trustees.

[94] Section 438(1) is the general empowering provision whereby the Court may

“constitute a trust in accordance with the provisions of this section”. Section 438(2) is

concerned with the mechanics of the exercise of that power. First, it clarifies that a trust

may be constituted by the Court on its own motion or upon application. Second, it provides

for the vesting of the land in trustees. Importantly, with any trust under s 438 the initial

vesting of land in trustees was under s 438(2) – it is not provided for elsewhere in s 438.

Hence, the vesting order made by Judge Carter on 2 October 1990 was under s 438(2).

[95] Judge Carter did not make a separate order “constituting” the trust and did not

expressly refer to s 438(1). That did not matter. The practice of judges varied throughout

the country as to whether a judge made an express order constituting a trust and whether the

order constituting the trust referred to s 438 simplicitor or to s 438(1) or to s 438(2).

Whatever the case, s 438(1) remains the subsection that empowered the Court to constitute

such trusts. Hence, s 354 refers to s 438(1) and applies to all trusts under s 438. Certainly,


we cannot conceive of any reason why a trust constituted under s 438 would be excluded

from the operation of s 354 simply because the order referred to s 438(2) and not s 438(1).

Even Mr Koning could not offer a reason. Section 354 is simply a transitionary provision

with the sole purpose of ensuring that s 438 trusts continue as ahu whenua trusts under the

1993 Act.

[96] Finally, even if the trust’s argument could be sustained, we do not believe it changes

anything in relation to the ownership of HE8 and the rights of succession. Whether a trust

was constituted under s 438 or its current equivalent of s 215, a person’s entitlement to

succeed to an interest in the land remained. Section 215(8) merely codified the position at

law prior to the 1993 Act. But, as we have concluded above, any such interests are

reversionary only.

Section 167

[97] We take the opportunity to clarify a matter that arose in relation to succession to the

interests of the original 22 owners in HE8.

[98] In Tane-Gibbons – Purangi Tanetinorau Deputy Chief Judge Isaac ordered that

Purangi Tanetinorau’s 1970 will did not apply to the interests in HE8 as, at the time of his

death, he did not own the interests.30 His decision was based on Judge Milroy’s report

where she considered the three alternative approaches suggested by Judge Carter in his

decision of 12 December 2003. She concluded that succession to any of the original 22

owners must be dealt with on the basis of intestacy.

[99] We agree that intestacies arise in relation to the interests of the original 22 owners.

However, we are obliged to point out that the reason why that is so was overlooked in those

earlier rulings. The circumstances of the original 22 owners is in fact expressly addressed

by s 167 of the 1953 Act:

167 Vesting of interests of deceased owner

If any person named as an owner in any freehold order has died before the making of the order, the order shall enure for the benefit of such person or persons as would have been entitled to succeed on the intestacy of that person if he had died immediately after the making of the freehold order.

30 (2008) 2008 Chief Judge’s MB 339 (2008 CJ 339)


[100] Section 167 covers freehold orders in general and applies to the vesting order under

s 436 as s 436(3) provides that it is a “freehold order”. Accordingly, as all the original 22

owners were deceased when HE8 was re-vested the s 436 order automatically triggered s

167 whereby the vesting order inured for the benefit of those persons entitled on intestacy.

However, any subsequent successions to the interests of those who have succeeded to the

original 22 owners are not governed by s 167 and wills may apply to them.

Variations to the trust order

Who are the beneficiaries for the purposes of s 244(3)?

[101] The proposed variations to the trust order arise out of the trust’s application.

Although Mr Tane has sought variations pursuant to s 351 of the Act, an application under s

351 can only be brought by the trustees of the trust as a body and not by an individual trustee

on his own.

[102] The trust’s application for review is pursuant to s 231. Under s 231(3)(b) the Court

may upon any review exercise its powers under s 244 to vary the trust order. Section 244(3)

provides that the Court can only vary a trust order following consultation with the

beneficiaries:

244 Variation of trust

(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.

[103] Are the “beneficiaries” of the trust for the purposes of s 244(3) those persons as

defined in the trust order or the underlying owners or both?

[104] Normally, the beneficiaries of an ahu whenua trust are “the persons beneficially

entitled to the land”: s 215(5). That is, the beneficial or underlying owners. However, s

215(5) does not override the existing trust in place as per the trust order: s 353. The trust

order defines the beneficiaries as the “descendants” of the original 22 owners. In our view,

that definition governs who should be consulted for the purposes of s 244(3).


[105] We have reached this conclusion mindful that some clauses in the trust order refer to

the interests of “owners”. Clause 11 of the original trust order (now clause 12 as from the

1998 amendment) provides for meetings. Both versions of the clause refer to a “general

meeting of owners”. Clause 8 as introduced in 1998 similarly refers to a “general meeting of

owners”. However, elsewhere the trust order only ever refers to the interests of

“beneficiaries” and makes no mention of “owners”.

[106] In our view, the inclusion of the word “owners” in clauses 8, 11 and 12 is a simple

drafting error. This is likely to have resulted from the trust order being based on a modified

version of a standard trust order which normally refers to “owners”. These references to

owners are entirely inconsistent with the scheme of the trust order, the overriding position of

the beneficiaries and the balance of the clauses. For example, clause 7, which contains the

important “protection of minorities” provision, expresses such protections in favour of

“beneficiaries”. Furthermore, clause 9 confirms the error in clause 11 by referring to a

“meeting of beneficiaries called pursuant to paragraph 11 hereof.”

[107] We have also considered whether the underlying owners retain some form of

residual right to express a view on variations to the trust. In particular, we have considered

whether the approach advocated by Judge Durie (as he then was) in Part Tauhara Middle

4A2A (Māori Reservation)31 might apply. In that decision Judge Durie suggested that where

there was a proposed change to the purpose of a Māori reservation the Court would need to

have regard to the views of not only the trustees and beneficiaries under the Māori

reservation but also the residual owners being the successors to the original owners who first

set aside the land as a Māori reservation.

[108] We do not consider Part Tauhara Middle 4A2A (Māori Reservation) to be on point.

First, we are not concerned with a Māori reservation. Second, Judge Durie’s suggested

approach arose out of his concern that the persons who originally set aside the land as a

Māori reservation (or their successors) would not have a say in respect of any proposed

change to the purpose of the Māori reservation. That is, he considered that the persons who

were effectively the “settlors” of the Māori reservation had a residual say in any change to

its purpose. It cannot be said that the original 22 owners or their successors are the

equivalent of the settlors of the trust.

[109] This is not a case where land was returned to owners who then, of their own

volition, decided to vest the land in a trust. Here, the ss 436 and 438 orders were


interdependent – the s 436 order expressly stipulated that it was a condition that the land be

vested in trustees under s 438 – and were effectively made simultaneously. If anyone could

claim to be the settlor of the trust it might be the Crown. But even the Crown was acting

under the direction of the AIP, in which case it might be said that the Crown and the

claimant hapu were the settlors. In any event, clearly the Crown relinquished any role in

relation to the land upon the 1990 orders being made and any possible right of the claimant

hapu to be consulted is satisfied by consultation with the beneficiaries.

[110] Thus, for the purposes of s 244(3) the beneficiaries are the class as defined in the

trust order. It follows that the underlying owners have no such right to be consulted. That

may be of little real consequence as we anticipate that virtually all underlying owners are

also descendants of the original 22 owners. Nevertheless, this leads us to a further important

point in relation to the underlying ownership.

[111] As time moves on the underlying owners may change to include persons who are not

descendants of the original 22 owners. Under s 108(2)(c) and (d) an owner may leave an

interest by will to a person who is not a descendant of one of the original 22 owners. Under

s 109(2) spouses or civil union partners who are not descendants of the original 22 owners

may obtain life interests on intestacy. Furthermore, under s 164 interests can be vested in a

member of the preferred classes of alienees who may well not be a descendant of the original

22 owners. There appears to be no legal impediment to these types of vestings. Hence, the

definition of beneficiaries in the trust order is critical to maintaining the intentions of the

settlement in the future.

Approach to consultation over variations to the trust order

[112] Ordinarily, only a trust would be expected to promote variations to a trust order in

terms of s 244(1). However, as the present situation illustrates, where the variations arise in

the context of a review under s 231, the situation can be quite different. Here, the trust and

Mr Tane are promoting alternative trust orders. The beneficiaries have already had one

unsuccessful attempt at expressing a view on those trust orders. Judge Milroy has directed

that the trust and Mr Tane revise their proposed trust orders and resubmit them for

consideration by the beneficiaries at a meeting.

[113] Judge Milroy’s direction is not under challenge and we detect no error in it.

However, depending on how the trust approaches the meeting, the beneficiaries may

31 (1977) 58 Taupo MB 168 (58 Tpo 168)


encounter significant difficulties in expressing a clear and considered view on the alternative

trust orders. Some of the clauses may be complex and may require significant explanation.

The trust orders will need to be compared, yet the clauses may not be easily comparable and

the trust orders may not be easily married. Beneficiaries may support certain clauses from

each of the two trust orders. If the beneficiaries vote on the trust orders clause by clause, the

meeting will likely become tedious and the beneficiaries may lose interest. If the

beneficiaries vote on the trust orders as a whole, their views on specific clauses may not be

properly gauged.

[114] Section 244(3) is primarily concerned with the beneficiaries’ views on the substance

of variations to a trust order and not the detail. Ultimately, the Court must decide upon the

wording of the trust order that gives effect to the beneficiaries’ wishes, if variation is

considered appropriate. In situations such as the present it may be more appropriate to

approach the proposed variations in two stages.

[115] First, to require the beneficiaries to pass resolutions in relation to key changes rather

than specific clauses or trust orders, much like a referendum. For example, should the

definition of beneficiaries change? Should the trustees be permanent or should they rotate?

And so forth. Second, if there is significant support for key changes then the Court would

direct the trust to prepare a draft trust order in accordance with the beneficiaries’ views.

[116] We emphasise that there is no challenge to Judge Milroy’s direction and that these

comments simply relate to the manner in which the trust consults with the beneficiaries on

these fundamental issues that have been outstanding since 1990.

Should the Court’s list of owners or the trustees’ list of beneficiaries form the beneficiary roll?

[117] Judge Milroy concluded in relation to the meeting of beneficiaries that a vote would

be needed and a reliable beneficiary roll was required. She had concerns that the list of

beneficiaries maintained by the trustees had not been prepared as a voting roll. In light of

statements made at the hearing of this appeal, we have similar concerns. Judge Milroy

considered that the list of owners kept by the Court would need to be updated. Further:32

It may be that the beneficiaries as a group simply have to accept that they must undertake succession in order to be able to vote on this particularly important matter.

32 (2008) 134 Waikato MB 3 (134 W 3) at [132]


[118] Only those listed as owners would be entitled to vote at the meeting.33

[119] The trust argued that Judge Milroy’s direction favoured underlying owners over the

trust’s list of beneficiaries, that this was a de facto variation of the trust and that a large

number of beneficiaries will be excluded by this direction.

[120] We are also concerned that the effect of Judge Milroy’s direction is that only those

listed as owners can vote on the proposed variations. As we have clarified, the beneficiaries

of the trust are the class defined in the trust order and not the underlying owners. While we

share Judge Milroy’s concerns with the efficacy of the list of beneficiaries maintained by the

trustees, relying on the list of owners is wrong as it equates the beneficiaries with underlying

owners when they are not synonymous.

[121] It would also distort the make-up of the beneficiaries. On the one hand, many

beneficiaries will be excluded because they have not completed successions or because they

disagree in principle with successions or because, as a child, grandchild and so forth of a

current owner, they cannot be included on the Court’s list of owners. On the other hand,

there may be underlying owners who hold interests in the land by reason of orders under ss

108(2), 109(2) or 164 who are not descendants of the original 22 owners.

[122] Under clause 11 of the trust order the trustees are obliged to maintain a list of

beneficiaries. If there is a problem with the trustees’ list of beneficiaries then the Court

should require the trustees to produce an accurate and robust list. How they do this may

require further direction from the lower Court. For example, the Court’s record of

successions may provide an evidential starting point and the trustees may otherwise need to

maintain whakapapa or call for registrations.

[123] Accordingly, we conclude that any voting must be based on the list of beneficiaries

maintained by the trustees. We return below to the efficacy of the list.

Distributions via whanau trusts

[124] The trust is by nature discretionary. No beneficiary can claim a fixed entitlement to

the trust property. Distributions are at the discretion of the trustees. Discretionary trusts are

by nature vulnerable to claims of unfair dealings or nepotism. The question of how the trust

33 Ibid at [138]


is to approach distributions was identified as an issue for investigation in the original trust

order – clause B6.

[125] In 1998 clause 8 was added to provide for distributions to whanau trusts approved

by general meeting. Since then the trustees have made distributions to four trusts intended

to represent the descendants of the original 22 owners, namely, the Tanetinorau Whanau

Trust, the Haereiti Whanau Trust, the Riutoto Aihe Whanau Trust and the Whatakaraka

Whanau Trust. None of these trusts own interests in the land.

[126] Judge Milroy considered that the current arrangement with distributions via the

whanau trusts was extremely untidy.34 She went on to express her concerns over the

incongruity of whanau trusts that are not owners in the land receiving distributions or

otherwise having a role in the appointments of trustees and so forth.35 She considered that

whanau trusts must be underlying owners if they are to have any formal role in relation to

the trust.

[127] We agree that the situation is untidy. However, we do not accept that whanau trusts

must be underlying owners if they are to have a formal role in relation to the trust. As we

have already concluded, underlying ownership is irrelevant to the trust and qualification as a

beneficiary. The beneficiaries are defined by descent and not by ownership. It must follow

that if the beneficiaries are not defined by ownership then the role of whanau trusts should

not be determined by ownership.

[128] Although we disagree that whanau trusts must be underlying owners, we

acknowledge that the issue is complex and that it needs to be addressed as part of the review.

As the review has yet to be completed it is not our role to suggest the answers, but we do

offer some questions. Is it appropriate for clause 8 to provide for whanau trusts to operate as

intermediary trusts? How are the Court, the trustees and the beneficiaries to know whether

the whanau trusts are representative of beneficiaries? How should the trust order deal with

beneficiaries who do not come under or choose not to come under a whanau trust? How

should the trust apportion distribution amongst the whanau trusts and the beneficiaries? Is it

preferable for the trust to distribute to beneficiaries and for the beneficiaries to then

nominate the whanau trust to receive their distribution?

34 Ibid at [94] 35 Ibid see paragraphs [86] to [98], [104], [105], [125(iii)] and [133]


Can the definition of the beneficiaries be varied?

[129] Judge Milroy concluded that the Court must ensure that the descendants of the

original 22 owners remain the beneficiaries of the trust unless it is clear that the beneficiaries

have agreed to a change36 and that such a change would amount to a fundamental change in

nature of the trust. 37 She then directed that the current definition must remain.38 Mr Catran

however disagrees that the definition of beneficiaries is “set in stone”.

[130] Our conclusion is that the definition of beneficiaries can change. We consider that

Judge Milroy’s direction at paragraph 125(i) expressed the situation in terms that were too

absolute. With respect, she expressed the position more accurately at paragraphs 48 and 67.

[131] The 1990 orders did not entrench the class of beneficiaries to the extent that they

could never be changed. Had the vesting been under s 267(3A) then that may have been the

case. But even then, the inherent powers of the High Court under s 237 would allow this

Court to effect a variation in extreme circumstances, such as a total failure of trust.

[132] In our view, a change to the definition of beneficiaries under s 244 could only occur

if three criteria were satisfied.

[133] First, the change could not offend the purpose of the 1990 settlement to benefit those

of the Ruapuha and Uekaha hapu. At present that purpose is met by the current definition of

beneficiaries. Whether another definition would satisfy that purpose would need to be

assessed on its merits.

[134] Second, the Court would need to be satisfied that there was good reason to change

the current definition. Simply because a number of beneficiaries support a change is not

enough. Certainly, arguments by Mr Tane and others that they have a “greater right” as

underlying owners is simply not valid. Conceivably, if there were significant problems with

the maintenance of the list of beneficiaries – such as ongoing debates over whakapapa – a

change may be justified.

[135] Third, there would need to be significant support from the beneficiaries.

Furthermore, in accordance with s 64A of the Trustee Act 1956, the Court would need to

36 Ibid at [48] 37 Ibid at [67] 38 Ibid at [125(i)]


assess carefully and thoroughly the impact of any change on any unborn beneficiaries, in

which case counsel may need to be appointed to represent them. In short, it would be no

easy task.

[136] Accordingly, having agreed that the definition of beneficiaries is not “set in stone”,

we consider that a change would be difficult to achieve.

Reference to the WAI 51 settlement

[137] The trust’s Notice of Appeal stated at paragraph 2 that the Court “erred by directing

at paragraph 125 of the decision that any amended trust proposal presented to the general

meeting called by the Registrar is not required to retain the implementation of the WAI 51

settlement as an object of the [trust]”.

[138] In fact, paragraph 125 of the decision is not to that effect. The only reference that

we can find in the decision to clause B2 is paragraph 58:

Furthermore, the various arrangements or agreements referred to in object B2 are in place, but object B2 raises the issue of whether the intentions of the settlement of the WAI 51 claim should continue to influence the way in which the trustees carry out the operations of the trust.

[139] Clause B2 is to the following effect:

To conclude and to carry on any arrangements or agreements entered into in respect of the land binding on the claimants in the settlement of claim WAI 51 with the Crown under the Treaty of Waitangi Act 1975.

[140] Clause B2 was intended to ensure that the trust assumed the obligations of the

claimants and the previous Ruapuha and Uekaha Hapu Trust under the AIP once the s 438

trust was established. From the Crown’s perspective, this was an important part of the

implementation of the AIP. We understand that the trust has concluded those arrangements

and agreements. Therefore clause B2 is probably no longer be needed. Nevertheless, that is

a matter for Judge Milroy to assess when the reveiw of the trust order comes back before

her.

Decision

[141] The 1990 settlement was with the hapu of Ruapuha and Uekaha and the intended

beneficiaries of HE8 upon its return were the descendants of the original 22 owners.


[142] We also clarify and confirm that:

(a) The settlement did not contemplate or provide for successions to the interests

of the original 22 owners but that such entitlement arose from the effect of

the s 436 order;

(b) The s 436 order did not impose a trust on the original 22 owners - the trust

arose by reason of the s 438 order;

(c) The “beneficiaries” as defined in the trust order are the beneficiaries for the

purposes of s 244 and in general;

(d) The trust is an ahu whenua trust for the purposes of the 1993 Act and

successions to interests may continue;

(e) Pursuant to s 167 of the 1953 Act successions to the original 22 owners must

be on the basis of intestacy.

(f) The underlying ownership interests are reversionary only and do not give the

underlying owners a say in the affairs of the trust or any other tangible rights

or interests.

[143] We conclude that Judge Milroy erred:

(a) in directing at paragraph 125(i) that the beneficiaries must remain

“descendants of the original owners when the land was vested in 1990”.

That statement is too absolute. Nevertheless, we agree that a change in the

definition of the beneficiaries may give rise to a fundamental change in the

purpose of the trust. Any proposed change could not offend the purpose of

the 1990 settlement, would need to be justified and would need the support

of a significant number of beneficiaries;

(b) in directing at paragraph 138 that only owners listed with the Court would be

entitled to vote and express a view at a meeting of beneficiaries. The list of

beneficiaries is the applicable beneficiary roll; and

(c) in concluding that intermediary whanau trusts must hold interests in the land.

[144] Judge Milroy will now need to consider what alternative directions should be issued

in relation to the proposed meeting of beneficiaries. In particular, it may be appropriate to


require the trustees to review the list of beneficiaries and submit it to the Court to be

scrutinised. Clearly the list needs to distinguish between those who are 18 and over and

those who are not. How the list is to be brought up to an acceptable standard is an issue for

Judge Milroy to consider. She may also decide to modify her other directions as a result of

the matters that we have clarified.

[145] Until those further directions are issued the position remains as per Judge Milroy’s

decision at paragraph 137 that the trust is not to distribute revenue without the express

approval of the Court pending the outcome of the two applications.

[146] Accordingly, pursuant to s 56(1)(e) of the 1993 Act the applications are referred

back to Judge Milroy to conduct a rehearing for the sole purpose of considering any

directions in relation to the proposed meeting of beneficiaries and the future conduct of the

applications.

Special Aid Fund

[147] At the commencement of the hearing of the appeal Mr Catran raised with the Court

an outstanding request for Special Aid under s 98 of the Act. Judge Milroy had granted aid

in the lower Court and we consider it appropriate that counsel’s appointment be extended for

this appeal. Upon submission of an appropriate tax invoice by 30 November 2010 the Court

will make an order pursuant to s 98(3)(a) for payment of Mr Catran’s reasonable legal costs.

This decision will be pronounced in open Court at the next sitting of the Court.

Pronounced in open court at Whangarei at 10.15 a.m. on Tuesday 9 November 2010.

_____________________ ________________________ _____________________ A D Spencer L R Harvey D J Ambler JUDGE JUDGE JUDGE

IN THE MAORI APPELLATE COURT OF NEW ZEALAND … · 2010 M. āori Appellate Court MB . 516 [10] In...

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