in the maori land court w aikato-maniapoto … · in the maori land court w aikato-maniapoto...

(

133 Otorohanga MB 141

IN THE MAORI LAND COURT W AIKATO-MANIAPOTO

Hearing:

Judgment:

A20060006006

UNDER Section 241 of Te Ture Whenua Maori Act 1993

IN THE MATTER OF the Tukehu-Miriama Whanau Trust - An application to terminate Trust

5 July 2007 (Heard at Te Kuiti)

19 February 2008

TAKURANGI MASON & LAURA HEREWINI Applicants

RESERVED JUDGMENT OF JUDGE S TE A MILROY

. Introduction

[1] The Tukehu Miriama Whanau Trust ("the Trust") was constituted by an order

of the Court on 29 April 1997 at 111 Otorohanga Minute Book, folio 199. The

Trustees of the Trust are Laura Herewini, James Taitoko Jnr, TakurangiMason and

Miriama Peri. Laura and Takurangi are the applicants in this application. The

beneficiaries of the Trust are the descendants of Tukehu William Taitoko and

Miriama Naonao Rauputu (Taitoko).

[2] Rukuwai Taitoko ("Rukuwai"), a child of the tipuna of the Trust, contributed

his shares in three blocks to the Trust - Aorangi 3A, Aorangi 3C1 and Aorangi 3C2.

The only other block held in the Trust is Karu-o-te-whenua B5C4A3, a block of

general land which, at the time the trust was constituted, was still in the name of

. Miriama Rauputu (Taitoko ), who is deceased. Rukuwai was, prior to the

constitution of the Trust, the sole owner ofAorangi 3C1 and Aorangi 3C2. At the

TAKURANGI MASON & LAURA HEREWlNI MLC A2006000600. [19 Fohm"", 2008l1~~


hearing where the order was made to constitute the Trust the minutes of the Court

show that Rukuwai was aware that a consequence of creating the Trust was that his

brother and sisters and their families would become beneficiaries of the Trust.

[3] The applicants filed to terminate the Trust in February 2006 upon the grounds

that Rukuwai, as the contributor of the majority of the interests in the Trust, wished

to terminate the Trust so that beneficiaries under his Will would succeed to his

interests. The second ground for the application stated that termination of the Trust

would allow succession to be completed to the Karu-o-te-whenua B5C4A block.

[4] At the time of the application Rukuwai Taitoko was suffering from a terminal

illness. The Court arranged to visit Mr Taitoko at home to take his evidence on 27

March 2006 (see 127 Otorohanga MB 152). On 8 May 2006 the matter was first

heard at Te Kuiti (see 127 Otorohanga MB 149). James Taitoko Snr ("James Snr")

and James Taitoko Jnr ("James Jnr"),.the brother and nephew of Rukuwai, appeared

to object to the application. The matter was then adjourned to allow the objectors to

have time to consider Rukuwai's evidence. The matter was again called on 4

September 2006 (see 128 Otorohanga MB 120), at whi.ch time James Jnr asked for a

further adjournment as his father had very recently died. The Court also directed the

trustees· to call a meeting of beneficiaries so that the application could be discussed

by the whanau as a whole.

[5] At the next hearing on 13 November 2006 (see 129 OtorohangaMB 16)

James Jnr referred to discussions that had taken place between his father and

Rukuwai prior to his father's death. James Jnr stated that James Snr's notes on the

meeting indicated that some compromise agreement had been reached between

Rukuwai and James Snr. The applicants, however, confirmed that Rukuwai wished

to continue with the termination of the Trust. James Jnr then asked for a further

adjournment in order to prepare submissions in opposition to the termination.

[6] The substantive hearing took place on 5 March 2007 (see 130 Otorohanga

MB 148) and the applicants and James Jnr gave their submissions to the Court. The

applicants asked that a further adjournment be granted in order that a meeting of the

whanau could take place, and to obtain written confirmation from Rukuwai that the

.. TAKURANGl MASON & LAURA HEREWlNIMLC A20060006006 [19 Fob"""" 2008]133 fYf ~~


tennination of the Trust was still his aim. The Court received his written

confmnation on 12 april 2007. The matter was fmally called again on 5 July 2007

(see 131 Otorohanga MB 77) and the taking of evidence was closed. Rukuwai died

on 6 August 2007. The applicants confmned by a letter received on 21 August 2007

that they wished to continue with the application.

Submissions for the Applicants

[7] The applicants contend that the land, excluding Karu-o-te-whenua B5C4A3

. block (General land), belonged to Rukuwai, and that he had the right to decide how

to dispose of-the land. Rukuwai had no issue and his Will provided for his sisters

and their heirs to be his beneficiaries .

. [8] The applicants also submitted that a hui was held on 18 February 2006 at

which the trustees of the existing Trust and the beneficiaries present agreed to the

tennination of the existing Trust and the constitution of a new trust. James Jnr did

not attend this meeting. The applicants believed that James Jnr had enough notice

that the existing trust was to be tenninated. The applicants queried why, if the

preservation of tipuna land was paramount to James Snr and his son, as the

respondents claimed, James Snr's shares were not transferred into the existing Trust

when it was formed in 1997. The applicants believe that it is only the present

application that prompted James Snr to consider transferring his interests into the

. existing Trust.

[9] The applicants stated that relations between family members have been

strained to the extent that it has been very difficult to work with James Jnr, and that

that is unlikely to change.in future. James Jnr and his father were never excluded

from attending meetings of the Whanau Trust - they just did not attend. The

applicants also asserted that Rukuwai wished to leave his lands to his sisters,

regardless of whether their parents left them land, and that the majority of

beneficiaries agreed to the Trust's tennination.

. ~~ TAKURANGI MASON & LAURA HEREWINI MLC A20060006006 [19 February 2008] 133 OT 141~152 tf


Respondents Submissions

[10] James Jnr submitted that there are 38 beneficiaries of the existing Trust

including great-great-grandchildren of the tiipuna of the Trust. James Jnr and his

father did not receive notice of the meeting at which it was agreed that the Trust

should be terminated - that meeting was only attended by the descendants and

trustees related to Rukuwai's three sisters. James Jnr asserted that the trustees who

attended that meeting have a conflict of interest as they stand to benefit from the

termination of the Trust. James Jnr also submitted that two ofRukuwai's sisters did

in fact own land interests and that the· trustees present at the meeting should have

advised Rukuwai of that.

[11] James Jnr was also concerned that if the Trust was terminated his father

would not have been able to be buried in the urupa situated on Aorangi 3Cl.

[12] James Jnr referred to his father's notes of the meeting he had with Rukuwai.

Those notes state that the Whanau Trust was to be retained, with James Snr's land

interests to go into the Trust. The notes also indicated that one child from each of

the families of the children of Tukehu and Miriama were to be trustees, so that there

would be five trustees in all. Furthermore Rukuwai was to change his Will to

accommodate James Snr's intentions.

[13] James Jnr also re~erred to an agreement for access over Aorangi 3C1 and

Aorangi 3C2 to Aorangi 3A, which James Jnr leases. James Jnr was concerned that

a termination of the lease would cause difficulties in completing legal access to

. Aorangi 3A. There are also costs associated with legal action that was taken to try

and secure the access - the payment of those costs still has to be resolved as between

the whanau trustees and the Aorangi 3A trustees.

[14] Finally, James Jnr was concerned that the termination of the trust would lead

to further alienation and fragmentation of the lands. He also submitted that the

Whanau Trust was not unworkable and that the beneficiaries and trustees would

benefit from being educated in the responsibilities, rights and duties associated with

administration of the Trust.

~~ TAKURANGI MASON & LAURA HEREWINI MLC A20060006006 [19 February 2008] 133 OT 141-152


Applicants'Reply

[15] The applicants stated that the family has always encouraged whanau

members to bring their dead back to the urupa whether there was a trust or not. They

also submitted that James Sm's visit was only one of three and that the two prior

visits were upsetting to Rukuwai. The trustees have not received copies of the

accounts for the access costs and there is some dispute as to whether those costs are

payable by the trust.

Investigation of Lands vested in the Tukehu Miriama Whanau Trust

[16] The Court of its own motion undertook an investigation of the court records

to investigate how Rukuwai Taitoko caine to be the sole owner of Aorangi 3Cl and

Aorangi 3C2 and a part-owner in Aorangi 3A. The investigation revealed the

. following:

Aorangi 3A

Te Koha Taitoko (paternal grandfather) vested his interest in Rukuwai

Taitoko at 85 Otorohanga MB 346, dated 15 August 1963. At 17 Nelson :ME

256, dated 20 March 1984, Wairemana Taitoko (cousin) gifted shares to

Rukuwai.

Aorangi 3eI

Te Raita Kopa Taitoko (paternal aunt) and Tukehu Kopa Taitoko (father)

vested all their interests in this block in Rukuwai Taitoko at 85 Otorohanga

MB 346 dated 15 August 1963. Tukehu Kopa Taitoko stated that all his

children were aware of this gifting, and he hoped to give his other children

other interests.

~~ TAKURANGI MASON & LAURA HEREWINI MLC A20060006006 [19 February 2008] 133 OT 141-152


Aorangi 3C2

Wiari Omipi sold his interest to Rukuwai Taitoko at 87 Otorohanga 320

dated 19 February 1966. Tainamaiti Whareaua also known as Tainamaiti

Pepi Whareaua or Pepi Whareaua sold her interests to Rukuwai Taitoko at 32

Alienation (Waikato-Maniapoto) MB 279 dated 11 February 1971. Further

shares were bought from the Maori Trustee on 17 April 1970.

[17] At 97 Otorohanga MB 117-118 on 12 October 1978 succession was

completed to Tukehu Taitoko also known as William Taitoko. This minute shows

he died intestate, so that all his children would have succeeded to any of his

remaining land interests.

[18] At 6 Registrars (Waikato-Maniapoto) MB 99 dated 16 June 1997, partial

succession to the estate of Miriama Taitoko also known as Miriama Rauputu was

completed. Only Rukuwai's brother and sisters succeeded to their mother.

Miriama's Will provided that her interests were to go to her other children and not to

. Rukuwai.

[19] The results of the investigation show that the land held in trust is indeed

ancestral land although not all of it was gifted to Rukuwai - he purchased some

interests. It also appears from the minutes that Rukuwai was farming Aorangi 3A,

Aorangi 3Cl and Aorangi 3C2 at the time the various transfers were made. ~

Although not specifically stated in the minutes, the clear implication is that the

transfers were made to emibleRukuwai to -run thefairil as a siIlgle econo!nicumt.

Once Rukuwai stopped farming the land was leased to neighbouring farmers.

The Law

[20] Whanau Trusts are constituted under section 214 of Te Ture Whenua Maori

Act 1993. Sub-section 2(a)(i) provides that an application for the constitution of a

Whanau Trust must be made by or with the consent of the owner or owners of the

interests or shares. Section 214(6) provides:

. .~ .. , .. : ~ ",'

. . TAKURANGI MASON & LAURA HEREWINI MLC A20060006006 [19 February 2008] 133 OT 141-152


(6) While a whanau trust constituted under this section remains in existence, no person shall be entitled to succeed to any interests or shares vested in the trustees for the purposes of the trust.

[21] Section 241 provides as follows:

241 Termination of trust

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

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

(b) The whole or any part of any interest in land subject to the trust,-

by makillg an order vesting that land or that part of that interest in land in the persons entitled to it in their respective shares, whether at law or in equity, or in such other persons as the beneficial owners may direct.

(2) Where a trust terminated under subsection (1) of this section is a whanau trust, the Court shall, notwithstanding anything in subsection (1) of this section, make an order vesting the land or the part of the land or the interest in the land in the persons entitled to it in their respective shares, whether at law or in equity, which persons are--

(a) The persons who were, at the creation of the trust and are at the date of the order, the beneficial owners of the land or the part of the land or the interest in the land; and

(b) Any persons who, at the date of the order, are successors of any of the persons who were, at the creation of the trust, the beneficial owners of the land or the part of the land or the interest in the land.

[22] In Maori Land Law (Boast Erueti McPhail & Smith, 2nd edition) at paragraph

8.7.1 (page 182), states that the Whfulau Trust was introduced to provide a way for

owners or successors "to stem the movement to fragmentation of interests into ever

smaller interests." The same text also refers to the termination of Maori Trusts at

paragraph 8.3.3 (page 166). It states as follows:

"In practice, the Maori Land Court is reluctant to terminate a Trust, unless there is evidence that the termination is in the interests of the owners. The rules contain detailed requirements applying to the creation of Trusts but are silent on the information that must accompany an application to terminate a Trust.

The general objectives of the Maori Land Court apply to an application of termination and the Court would need evidence that:

T AKURANGI MASON & LAURA HEREWINI MLC A20060006006 [19 February 2008] 133 OT 141-152


Owners had been consulted on the termination by a consultation meeting called by the trustee ... "

[23] Further on in paragraph 8.3.3 in Maori Land Law, the text makes reference to

section 231 of Te Ture Whenua Maori Act 1993 which provides that, on a review of

a Trust, the Court may tenninate the Trust if satisfied that "there is a sufficient

degree of support for tennination among the beneficiaries."

The General Law in relation to tennination of a Trust is not very helpful since

private Trusts are tenninated either in accordance with the provisions of the Trust

Deed . setting up the Trust, or by an agreement amongst the beneficiaries to tenninate

it.

Discussion

[24] Section 241(2) provides that on tennination ofa Whanau Trust the succession

to the land interests that would otherwise have taken place if the Whanau Trust was

not constituted would, in effect, be reinstated by the termination. Unless an

application to terminate the trust is made, the Whanau Trust continues in perpetuity.

These features of the Whanau Trust, in my view, tend to emphasise its function in

preventing succession, and, thereby, further fragmentation of the land.

[25] I think they also emphasise the difference between Whanau Trusts and

. private Trusts generally. Private Trusts can and often do provide for final vesting of

the Trust assets in beneficiaries who may not include those with a legal or equitable

interest in the assets prior to the constitution of the Trust. Thus the private Trust is

often intended to move ownership and income away from the settlor.

[26] By comparison the Preamble and section 2 of Te Ture Whenua Maori Act

1993 contemplates the continuing connection of the beneficial owners with the land.

The combination of these provisions and s 241(2) in the case of a Whanau Trust

points to a strong sense that those with a beneficial interest in the land at the time of

the creation of the Whanau Trust maintain an underlying interest in the land.

TAKURANGI MASON & LAURA HEREWINI MLC A20060006006 [19 February 2008] 133 OT 141-152


[27] That ongoing connection is important in considering the role Rukuwai took in

the decision to terminate the trust. Prior to the Trust's constitution Rukuwai was the

sole owner of 2 of the land blocks and a shareholder in a third block. In other

applications involving these parties that have been before the Court, the parties

appeared to consider that Rukuwai was entitled to playa dominant role in the Trust.

For instance, James 1m made an application to obtain access to Aorangi 3A across

Aorangi 3CI and 3C2. He required the co-operation and consent of the other

trustees of this Whanau Trust. The minutes of meetings regarding the access issue

indicated clearly that all parties· considered Rukuwai Taitoko as the underlying

owner of these interests. I also note that James 1m, in his submissions in this

application, accepted that Rukuwai was entitled to appoint the trustees.

[28] The other Trustees and Rukuwai himself seem to have assumed that Rukuwai

could make the decision to terminate the Trust, subject only to the .court's approval.

That assumption does not coincide with ordinary trust law, which is that the trustees

must make decisions in the best interests of all the beneficiaries. That does not

prevent them from ascertaining the beneficiaries' wishes, but the trustees must make

their own decisions. That said, in the Maori land context and where a Whanau Trust

is concerned I think the Court in its determinations ought to take into account the

wishes of the underlying beneficial owners.

[29] In this case, Rukuwai was the beneficial owner of the lion's share of the trust

assets at the constitution of the Trust, had purchased some of those interests, and

would receive those interests back on termination of the Trust. I bear in mind the

fact that in many situations a majority owner in Maori land has often become so by

operation of an imposed land tenure system, which displaced hapu or whanau

landholdings. Nevertheless, in the circumstances of this particular Trust I think the

Court is entitled to give considerable weight to Rukuwai's wishes.

[30] The Respondents relied on the fact that this land came to Rukuwai from his

parents and that all the descendants of those parents ought to benefit from the land.

The Trust is a means by which this can happen. On the other hand it is clear that, as

Rukuwai has no issue, other descendants of those tipuna will benefit from the land.

The Court received no objections from any other members of the whanau. The



objections came only from James Taitoko and his father, who will, in effect, be cut

out of these particular land interests. The applicants say that that is a result of

disagreements between Rukuwai and the other whanau trustees on the one hand and

James Snr and Jnr on the other. Despite the Court giving ample opportunity to the

whanau to try and resolve these disagreements amicably, no resolution has been

reached. In the circumstances I take the view that the majority of the trustees and

beneficiaries support termination and that there is good reason for the termination,

given the unreconciled differences between the parties.

[31] The Respondents also raised objections that at the meeting where it was

agreed to terminate the Trust the trustees had a conflict of interest, since they were

likely to benefit from such a decision. Such situations are common in many other

Maori trusts where the trustees are also beneficiaries. James Jnr himself is a trustee

and beneficiary and had a similar interest as the others in the decision - he stood to

lose if the decision was made. These facts do not of themselves necessarily raise a

conflict of interest such as would disqualify any of the trustees from being involved

in the decision. The topic of conflict of interest was discussed in the case Jones v

AMP Perpetual Trustee Co NZ Ltd [1994] 1 NZLR 690. The court explained (at

p710 -711 of the judgment) the no-conflict and no,;,profit rules in this way:

"To my mind, therefore, there is no absolute principle which would either exclude the general principle that a trustee cannot profit from its management of the trust or mean that it is invariably applied wherever a subsidiary acting as a trustee benefits its parent company. What is pertinent is the underlying rationale for the prohibition which the Courts of equity have sought to advance. This fundamental principle, as I apprehend it, it to ensure that the trustee's loyalty to serve the interests of the trust, or the beneficiaries of the trust, is not distracted by a personal interest which conflicts with those interests ...

Whether there has been a breach of this underlying principle will, to a large extent, be a question of fact and degree, and for that purpose the facts must be closely scrutinised. The formula propounded by Lord Scarman, in Queensland Mines Ltd v Hudson (1978) 18 ALR 1, 3, appeals to me. He adopted the test put forward by Lord Upjohn in his dissenting judgment in Boardman v Phipps [1967] 2 AC 46 at p 124, that is, whether "the reasonable man looking at the relevant facts and circumstances of the particular case would think that there was a real sensible possibility of conflict."

[32] Adopting this approach I take into account that Rukuwai was still alive at the

time the decision was made, and in my view, played an important role in persuadipg

TAKURANGI MASON &. LAURA HEREWJNI MLC A20060006006 [I' F"",""'Y~~


the trustees to come to this decision. The trustees, however, had no guarantee that

Rukuwai would not change his mind and his Will as to who his successors were to

be. In these circumstances I consider that Rukuwai's influence attached more to his

. role as kaumatua and perceived owner of the land, than to the benefit that might

accrue to the trustees individually. I also consider that the decision to terminate the

trust might well have seemed inevitable given the. differences that had arisen

between the parties.

[33] The other important point, of course, is that the trustees must apply to the

Court for termination and go through the hearing process - they do not themselves

have the power to terminate a Whanau Trust. In the circumstances of this case I do

not consider that the conflict of interest here was. sufficient to nullify the trustees'

decision to take the necessary steps to have the Trust terminated.

[34] James Jnr also referred to the fact that the trustees should have advised

Rukuwai that they were not left landless, as they are successors to Miriama Rauputu

. (Taitoko). In fact Rukuwai was the executor of Miriama's Will. He would have been

aware that his sisters succeeded, as he was aware that James Snr had succeeded to

his mother's interests. He may have had a lapse of memory or may have considered

that his sisters received no lands from their father. In any case I do not see this as

material in determining whether to terminate the Trust.

[35] Lastly, James Jnr argued th~t lack of notice to him of the meeting at which

the decision was made to terminate the trust should vitiate the trustees' decision.

There is a difference of evidence between James Jnr and the applicants on this point.

I do not consider that difference material because even if James Snr and Jnr did not

receive notice of the meeting they received notice of the application to terminate and

were given ample opportunity to prepare their arguments. I also take into account

that James Snr arranged meetings with Rukuwai after the application was filed in

Court, and that more than 3 months elapsed between the hearing at which the matter

was first called~and James Snr's death. He had opportunity to persuade Rukuwai to

change his mind about termination. If Rukuwai had done so my assessment of the

way this trust operated is that the trustees would have obeyed Rukuwai's instructions

" . ~1~/

TAKURANGI MASON & LAURA HEREWlN1 MLC A20060006006 [19 February 2008] 133 0:141-152 I


and withdrawn the application for termination. The lack of notice of the trustees'

and beneficiaries' meeting is not material in this context.

[36] In respect of James Jm's concern about costs relating to the access

application, no evidence was presented regarding such costs. The usual legal

position is that if the trustees of the Whanau Trust are liable for such costs or a

portion of them, they remain liable regardless of the termination of the Whanau

Trust. I do not see this concern as being sufficient to impede the termination of the

Trust.

Decision

[37] Having considered all the above matters, and particularly the facts that the

trustees have fallen out to such a degree that the majority of trustees consider the

trust is unworkable and that the majority of beneficiaries is in support of the

application, I am of the view that the Trust should be terminated.

Order

[38] There is therefore an order under section 241 of Te Ture Whenua Maori

Act 1993 terminating the Tukehu Miriama Whanau Trust and vesting the

interests back into the beneficial owners of the interests at the time of the

creation of the Trust. The Court anticipates that applications for succession

will be made as a result olsrich termm3:tiori:

Pronounced at Hamilton this 19th day of February 2008.

~~ S TeA Milroy

JUDGE


in the maori land court w aikato-maniapoto … · in the maori land court w aikato-maniapoto...

Documents