125 Whangarei MB 11

IN THE MAORI LAND COURT OF NEW ZEALAND TAITOKERAU DISTRICT

Hearing:

Judgment:

A200S00139S1

UNDER Section 164 of Te Ture Whenua Maori Act 1993

IN THE MATTER OF Te Horo 2B2B2B Residue and others

II October 2006

9 May 2008

JACK MERVYN BARNES Applicant

RESERVED JUDGMENT OF JUDGE D J AMBLER

Introduction

[1] The COllt has before it an application pursuant to section 164 ofTe Ture Whenua

Maori Act 1993 ("the Act") by Jack Barnes to transfer by way of gift his interests in Te

Horo 2B2B2B Reside, Whatitiri 13l3B2B2 and Maungapohatu NOith to his nephew,

Michael Beckham. Michael Beckham is the son of Jack Barnes' sister, Louisianna Elia,

and is from within the preferred classes of alienees for the purpose of these transfers. Jack

Barnes' children object to the transfer.

Background

[2) The application first came before Judge Spencer on 20 February 2006. Jack

Barnes, Michael Beckham and Louisianna Elia appeared. The application was adjourned

to Chambers to enable information in relation to the application to be forwarded to Jack

Barnes' four children. Judge Spencer directed that if the children did not object to the

125 Whangarei MB 12

application the orders would be made in Chambers. If they did object the application

would be set down for further hearing.

[3] By way of a letter dated 3 August 2006, Jack Barnes' daughter Tungia Barnes and

son Brian Ballles wrote to the Court to object to the transfer. The application was then set

down for further hearing and came before me on 11 October 2006. At that hearing Jack

Barnes, Michael Beckham and Louisianna Elia appeared in support of the transfer. Brian

Barnes appeared in opposition on behalf of his two sisters and brothel'. I summarise below

the position of the various patties.

[4] Jack Ballles wishes to gift his interests to his nephew as he is now 65 years old and

is fiustrated by his past attempts to use the Te Horo 2B2B2B Residue land. He sees his

nephew as a younger person with enthusiasm and ideas who will be able to use the land.

Michael Beckham is interested in purchasing the neighbouring Sowry block and Jack

Ballles considers that the transfer of interests in Te Horo 2B2B2B Residue will give

Michael the oppOitunity to buy into that neighbouring block. He does not believe his

children have any real interest in the land as he has offered them opPOItunities in the past

to build on the land. He is concemed that if the interests are inherited by his children and

grandchildren they will get smaller and smaller whereby they won't have "enough shares

to even stand on the land." I observe here that the fragmentation of interests is no less

likely if the interests are transfetTed to Michael Beckham. Jack Ballles did not give any

reasons for transfetTing his other land interests to his nephew.

[5] Michael Beckham confitmed that acquiring more interests within the "whanau

block" (which I take to be a reference to the Te Horo 2B2B2B Residue block as it includes

the Kaikou block associated with this whanau) will assist him to purchase the SOWlY block

in the future. He said that, in receiving these interests, he would not deny his cousins the

ability to shift back to the land. Notwithstanding that sentiment, it goes without saying that

he would be the legal owner ofthose interests with no obligation to provide for his cousins.

[6] Louisianna Elia was generally in support of the transfer. She expressed surprise at

her nephews' and nieces' opposition. She said that they would "always be welcome back

in Pipiwai because we can't disinherit them in that sense." Once again, the sentiment that

125 Whangarei MB 13

Jack Bames' children would not be disinherited is at odds with the legal effect of the

transfer.

[7] Brian Bames objected to the transfer as he considered that the interests were always

for him and his siblings. TIley see them as an inheritance. He expressed support for the Te

Kaitiaki Whanau Trust (of which he is a trustee) purchasing the SOWIY block to avoid the

problem of it being held by an individua~ such as Michael Beckham. He considers it

unsatisfactory for him and his siblings to rely on his cousin to provide for them in the

future .

Delivation of interests

[8] At the conclusion of the hearing I reserved my decision. I directed the Case

Manager to complete a full derivation report showing Jack Bal1les' cun'ent interests and

any interests that he had transfen'ed to the Te Kaitiaki YVhanau Trust. I did this as there

was conflicting infonnation on the file regarding Jack Bal1les' CUll'ent interests and their

derivation and those that had been transfen'ed to the uust.

[9] In his application Jack Bal1les proposed to transfer his interests in "Te Horo

2B2B2B Residue, A4F and A4E". Then, by a letter dated 24 October 2005, he clarified

that he wanted to u'ansfer all interests he held in Maungapohatu North, Whatitiri

13l3B2B2 and Te Horo 2B2B2B Residue. At the hearing the searches compiled by the

Case Manager disclosed that Jack Bames held 0.742 shares in Maungapohatu North and

4.642 shares in Whatatiri 1313B2B2 derived fi'om his mother, and 19.490 shares in Te

Horo 2B2B2B Residue derived fi'om his cousin Matekino Rangiuia. However, this

infOlmation did not tally with what Jack Bames told the Court. Hence, I sought the

derivation report.

[10] I have now received an acceptable derivation report, 18 months after the hearing. It

discloses that Jack Bal1les succeeded to the Maungapohatu North and Whatitiri 13l3B2B2

interests fi'om his mother and his uncle Jack or Matekino Waa, and that he succeeded to

the Te Horo 2B2B2B Residue interests fi'om his mother. Any interests that he purchased

fi'om his cousins have already been u'ansfel1'ed to the Te Kaitiaki Whanau Trust.

125 Whangarei MB 14

[11] The derivation of interests is important as it may affect the outcome of the

application. That is because the interests that were inherited by Jack Bal1les have a greater

status as "taonga tuku iho" than those that he purchased. Both Louissiana Elia and Jack

Bal1les acknowledged this. Louisianna Elia put it this way:

" ... my nephew and them are entitled to my brother's shares by birth and those that

my brother has acquired from our first cousin, those are totally different. "

[12] Jack Bames put it this way:

"Really, you know Judge, I really want this thing today to happen - that they

should go across to Michael. As I say, I've bought the shares. I don't know which

ones the trust have got now. lfmy own shares, which is what I've inherited, can't

go across because of this tie up in the Court system, I wish the ones that I actually

bought would go across to Michael because I did buy them. They're not actually

inheritance issue. "

[13] I note here that Jack Bames' statement is at odds with the Court record when

Matekino Rangiuia transfen'ed the interests to Jack Bal1les on 20 March 1987 as it is

recorded by the COUli that (18 AT 73) " Mr Bames will set aside this land for all my

family as well. A tl'Ust for the family." Jack Barnes may not be as fi'ee to deal with the

interests he received fi'om Matekino Rangiuia as he thinks. Nevertheless, the derivation

report has clarified that we are not dealing with those interests in this application.

The COUli's Discretion

[14] The COUli has a general discretion to make vesting orders under section 164. That

is clear fi'om the section and the case law.

[15] Section 164(1) provides that the Court "may ... make a vesting order" transfen'ing

interests . When the word "may" is used in a statute there is a prima faCie presumption that

its meaning is pelmissive (discretionaIY) and not mandatory, though the context 01'

circumstance of the use of the word may lead to a mandatory constl'Uction: Far North

District Council v Local Government Commission [1994]3 NZLR 78.

125 Whangarei MB 15

[16] . The statutory context or circumstance of the use of "may" in section 164 does not

lead to a conclusion that section 164 is mandatory whereby the Court must make a vesting

order. As numerous decisions of this Com1 and the Maori Appellate Court have

emphasised, the Act set in place a special regime for dealing with Maori land in

recognition if its special significance to Maori people. Maori land is recognised in the

Preamble and section 2 of the Act as of significance to not only the immediate owners but

also their whanau, hapu and descendants. It is a "taonga tuku iho", an inheritance that is

expected to be passed on. The Maori Appellate Com1 in Wainui 2F4D 7 APWH I-II

observed that two of the key principles of the Act are that "those with rights or interests in

the land go beyond the beneficial owners themselves to whanau, hapu and descendants of

the owners" and that land is a "taonga tuku iho and should be retained within the kin gr'oup

if possible". Given those principles, it follows that the Court has an imp0l1ant role in

balancing the intentions and objectives of the Act as between the interests of the owners

and their whanau, hapu and descendants . On occasion, the Com1 will be persuaded to

decide in favour of objecting whanau, hapu or descendants and decline to give effect to a

transfer of interests . I touch on that in more detail below.

[17] Pursuant to section 146 of the Act interests in Maori freehold land can only be

alienated in accordance with the Act. Transfers of undivided interests are ordinarily dealt

with pursuant to section 164: section 150. The discretionary nature of section 164 may be

contrasted with section 152 (which is primarily used to effect alienation of whole blocks of

Maori freehold land) where the Court "must" grant confirmation if cel1ain statutory criteria

are satisfied. Under section 152 the Com1 has no choice. It is noteworthy that section 152

was amended in 2002 by removing any previous discretion (and consequently repealing

sections 153 and 154) and that Parliament did not similarly amend section 164.

[18] Not surprisingly, the Maori Appellate Court confirmed that the Com1's power

under section 164 is discretionary in Re Appeal by Northcraft (Maori Appellate Com1, 27

October 1995) and in Re Carolyn Phillips 6 WHAP 271. I will return to these decisions

sh0l1ly.

[19] As a footnote to this discussion I observe in relation to section 213 of the Maori

Affairs Act 1953 (being the predecessor to section 164) that the extent of the discretion

under that section was held to have changed with legislative amendment. In Re

125 Whangarei MB 16

Ruaohinetu iB2D Gisbome ACMB 27/352 (1956) the Maori Appellate Court ruled that the

Court's discretion was a general one and was not limited to deciding whether an order

should be made under section 213 or section 224 (the fOlmer equivalent of section 151 of

the Act). Then, in Re Wharerallmati Development Ltd 14 APAK 366-402 (1975) the

Maori Appellate COUli opined that the removal of the words "in its discretion" from

section 231(1) by the Maori Affairs Amendment Act 1967 restricted the fonner discretion.

I am not all together convinced by the reasoning in that decision. Be that as it may, section

164 must be interpreted in the context of the vastly different regime of Te Ture Whenua

Maori Act 1993 and, as the Maori Appellate Court has since concluded, gives the Court a

general discretion to make vesting orders.

The Exercise of the Discretion

[20] The more significant issue is not whether there is a discretion, but how it is to be

exercised. The Maori Appellate COUli has given guidance on two occasions.

[21] In Re Appeal by Northcroft the COUli dismissed an appeal against the decision of

the lower COUli to transfer interests in Maori fi'eehold land fi'om an aunt to her nephew.

The appellant was the brother of the nephew and opposed the order on the grounds that the

aunt should have gifted the interests to himself and all of his siblings and not to his brother

only. 111is was the first decision of the COUli to consider section 164. The Court

concluded its decision by offering the following guidance:

"We suggest that when alienations are subject to preferred class preference being of the class does not give a person rights against other preferred class - the provision is a shield protecting all of the preferred class from outsiders entering the title. In the matter before us put simply, to have succeeded the appellant would have had to establish grounds exclusive of preferred class considerations. Having said tlus we suggest however tllat the remoteness of tile relationship between alienor and alienee where closer relatives of ti,e donor object is a matter tI,at the Court of first instance should give weight to when exercising its discretion. We are of ti,e view tI,at the establishment of preferred class is a condition precedent to the exercise of jurisdiction by the Court it is not a cause of action.

We suggest tI,at the value of ti,e gift, ti,e relationslup of ti,e donor and donee, ti,e age of donor and the views of the donor's i!illnediate family are all important aspects when directions for service are given. A low value gift share to a child or sibling may not require the wider fantily being brought into the matter, contrast a gift of ve!y valuable interests by an aged donor to one of many children, tI,is situation appears to demand ti,e other cluldren having knowledge of what is

125 Whangarei MB 17

contemplated thus allowing their views (if any) to be put before the Court. Essentially we believe these considerations are at the discretion of the Judge."

[22] In Re Carolyn Phillips the Court dealt with an appeal by a member of the preferred

classes of alienees against an order of the lower COUlt to transfer interests from a brother to

a sister. The appeal was dismissed and the COUlt observed (pages 276-277):

"While we accept that it is commonplace for many iwi and hapu to observe a process of consultation where the transfer of interests is to move outside of the kin group, we can find no evidence or authority for the proposition that the vestings between closely related whanau, in this case siblings, requires the consent of hapu. Nor does the Act provide support for the Appellant's position. On the contrary, we consider transfers of shares between siblings and close family members are, except in the rarest of circumstances, a private matter between those individuals and their immediate family members only."

[23] I am not aware of any other decisions of the Maori Appellate Court that have

considered section 164. Section 164 itself does not provide any express guidance on how

the discretion should be exercised. That guidance is contained in the Preamble, section 2

and section 17 of the Act. They deserve to be quoted in full:

[24] The Preamble provides (in English):

"Whereas the Treaty of Waitangi established the special relationship between the Maori people and the Crown: And whereas it is desirable that the spil"it of the exchange of kawanatanga for the protection of rangatiratanga embodied in the Treaty of Waitangi be reaffirmed; And whereas it is desirable to recognise that land is a taonga tuku iho of special significance to Maori people and, for that reason, to promote the retention of that land in the hands of its owners, their whanau, and their hapu, and to protect wahi tapu: and to facilitate the occupation, development, and utilisation of that land for the benefit of its owners, their whanau, and their hapu: And whereas it is desirable to maintain a COUlt to establish mechanisms to assist the Maori people to achieve the implementation of these principles:" (Emphasis added)

[25] Section 2 provides:

"2 Interpretation of Act generally

(I) It is the intention of Parliament that the provisions of this Act shall be interpreted in a manner that best fulthers the principles set out in the Preamble.

125WhangareiMB 18

(0) Without limiting the generality of subsection (1), it is the intention of Parliament that powers, duties, and discretions confen'ed by this Act shall be exercised, as far as possible, in a manner that facilitates and promotes the retention, use, development, and control of Maori land as taonga tuku iho by Maori owners, their whanau, their hapu, and their descendants, and that protects wahi tapu.

(3) In the event of any conflict in meaning between the Maori and the English versions of the Preamble, the Maori version shall prevail." (Emphasis added)

[26] Section 17 provides:

"17 General objectives

(1) In exercising its jurisdiction and powers under this Act, the pnmaly objective of the Court shall be to promote and assist in-

(a) the retention of Maori land and General land owned by Maori in the hands of the owners; and

(b) the effective use, management , and development, by or on behalf of the owners, of Maori land and General land owned by Maori.

(2) In applying subsection (1), the Court shall seek to achieve the following further objectives:

(a) to asceliain and give effect to the wishes of the owners of any land to which the proceedings relate:

(b) to provide a means whereby the owners may be kept infolmed of any proposals relating to any land, and a forum in which the ol'mers might discuss any such proposal:

(c) to detelmine or facilitate the settlement of disputes and other matters among the owners of any land;

(d) to protect minority interests in any land against an oppressive majority, and to protect majority interests in the land against an unreasonable minority;

(e) to ensure faimess in dealings with the owners of any land in multiple ownership;

(f) to promote practical solutions to problems anslllg III the use or management of any land."

125 Whangarei MB 19

[27] As I have observed earlier, the Act set in place a special regime for dealing with

Maori land. Interests in Maori land are not synonymous with interests in general land.

They carry with them the contingent "interests" of the whanau, hapu and descendants of

the owners. (I use the word "interests" cautiously as I am not suggesting that they amount

to either legal or equitable interests in the land. The interests may only be in the processes

under the Act.) Owners wishing to transfer interests may need to first traverse the

objections of their whanau, hapu and descendants.

[28] In assessing the merits of a transfer the Court must measure the circumstances of

the case against the intentions and objectives of the Act as set out in the Preamble, section

2 and section 17. The proposed transfer may give rise to tension between the objectives of

retention of the land and use, management and development of the land.

[29] In practice, the COUli should be cognisant of the gulf of understanding that can exist

between Maori owners and the COUli in relation to land and dealings in land. Maori will

normally have a more holistic and non-legal understanding, influenced by cultural and

spiritual considerations and imperatives. The Court's understanding is governed by the

law. Often (not necessarily in this case), those who come before the COUli wishing to

transfer interests are not fully aware of the absolute nature of the vesting order or transfer

the interests in reliance upon celiain cultural obligations imposed on transferees (but which

are not given effect to in the order) or are unaware of the alternatives that may be available

to achieve their desired outcome. In my view, section l7(2)(f) contemplates that the Court

will explore alternative solutions in order to avoid unnecessary transfers.

[30J Where a transfer is contentions or opposed the COUli should exam me the

underlying rationale for the transfer. What is the practical purpose? How does the transfer

promote the "use, management and development" of the land? Does the transfer carry

with it obligations on the transferee? If so, how are they to be given effect to? Is there an

alternative to outright alienation, such as creating a life interest only or vesting in a whanau

trust? Ultimately, where the transfer contravenes the intentions and objectives the Act, the

COUli may decline to order the transfer.

[31 J From the above analysis I drawn the following principles in relation to the exercise

of the discretion under section 164:

125 Whangarei MB 20

1) The discretion is a general one.

2) Alienors, alienees, owners in the land, those who will be owners in the land

as a result of a vesting order, and members of the prefen'ed classes of

alienee may appear before the Court to express support or opposition to an

application,

3) The exercise of discretion is to be calTied out having regard to the

directions contained in the Preamble, section 2 and section 17 ofthe Act. In

essence, the COUli is to balance the wishes of the alienor with the

occasionally competing objectives of retention and utilisation of land by its

Maori owners, their whanau, their hapu and their descendants.

4) The eJdent to which the COUli gives weight to the views of objectors will be

affected in part by the proximity of the relationship between the alienor, the

alienee and the objectors. That is, where the transfer is between an alienor

and alienee who are closely related, but the objector is distantly related, the

views of the objector are likely to cany little weight. Conversely, where the

transfer is between an alienor and alienee who are distantly related, but the

objector is closely related to the alienor, the views of the objector are likely

to cany more weight.

5) The purpose of the transfer will have some influence on the exercise of the

COUli's discretion. This goes to the heart of the twin objectives of retention

and utilisation of Maori land that are sometimes in conflict. For example, if

there are good practical reasons for the transfer (such as to enable another

owner to have sufficient shares to obtain an occupation order in order to

build on the land), the COUli may disregard the objections of those closely

related to the alienor. However, if the purpose is little more than to relieve

the alienor of the perceived burden of the land interests but will deprive

future generations of an inheritance, the COUli may decline the transfer on

the basis that the principle of retention prevails as the transfer will not

promote any utilisation of the land.

125 Whangarei MB 21

6) Where there is no opposition and those closely related to the alienor have

had an opportunity to express a view, the transfer is likely to be granted.

A pplication of Discretion

[32] I now tum to the application of the discretion in the present case.

[33] I take into account the wishes of Jack Bames. He received all the interests he

proposes to transfer by way of inheritance. Any interests that he purchased fi'om his

cousins have already been vested in the tmstees of the Te Kaitiaki Whanau Trust. He and

his sister drew a distinction between interests inherited and those he purchased. They both

accepted that it was less appropriate to transfer shares that he inherited.

[34] I take into account the purpose of the transfer. In my view there is little practical

purpose. The interests are velY small. It is difficult to see how they will advantage

Michael Beckham. Celiainly, in relation to Maungapohatu North and Whatitiri 13I3B2B2,

no practical reason was given. It seems that Jack Bames is deeply frustrated at his inability

to make progress in using Te Horo 2B2B2B Residue and sees Michael Beckham as

someone who might make progress. However, as I have said, the shares are so small

(representing approximately 0.07% ofTe Horo 2B2B2B Residue) as to give rise to no real

practical benefit in tenllS of utilisation of that land.

[35] I otherwise take into account the views of those who object, the children of Jack

Bames. If the transfer is granted they will lose any prospect of future inheritance of these

interests. Their whakapapa to the land will be severed, and for no practical purpose.

Furthelmore, the transfer will likely create tension between them and Michael Beckham. I

do not believe Jack Bames intends such a legacy for his children.

[36] On the whole, I consider the transfer to be contrary to the principles of the Act. I

note that my view may have been different if the only interests being transfell'ed were

those purchased by Jack Bames.

125 Whangarei MB 22

[37] The application is dismissed.

lOuncd in open COUl1 in Lv~IA4f~' at 3 - ~ 3- amlpm

ilii, q ~ d,y of ~ 2008

JUDGE